In a nutshell 🥥 Branches aren’t going away—but their purpose is shifting. As more day‑to‑day transactions move to digital, “smart ATMs” can take on up to 90% of routine branch services, shrinking branch footprints, cutting costs, and freeing frontline staff to focus on high‑value, relationship‑building conversations instead of basic transactions. When done right, smart ATMs complement—not replace—human tellers and can even support more branches and more jobs in the long run.
While branches remain important, their role is changing. Customers are increasingly comfortable taking advantage of online and mobile channels, leading to lower branch traffic and fewer teller transactions. As more clients use digital channels to deposit checks, transfer funds and manage their accounts, banks and credit unions must continue to move away from their transactional focus and adapt to meet the expectations of the evolving relationship that customers have with their branch.
As a follow up to Part 2 in our series, today we will be examining the 3rd of 5 different strategies that banks and credit unions can implement in order to set their branches up for success in this rapidly changing landscape.
Upgrade to Smart ATMs
Introduced back in 1969, the ATM once again has the power to bring about a major shift in banking. Originally designed to perform withdrawals, they’ve evolved over the years to handle new routine tasks like balance inquiries, transfers and deposits, but they are long overdue for a more serious upgrade. In today’s self-service oriented world, ATMs are expected to be effectively entire branches contained within a single box.
Insight.
“As the ATM turns 50, some people may think that it’s reaching the end of the road – they’re wrong. In fact, the future of the ATM is bright in this shifting financial landscape, especially as the technology behind them continues to evolve and offer new services to customers… A combination of self-service machines and staff could be the ticket to reviving a dwindling supply of bank branches”
Mark Aldred
Banking Technology Expert, Auriga
The financial services industry is evolving faster than ever before, and digital focused millennials and Gen Zs expect the technology involved in managing their money to match trends seen in other industries — and that includes the ATM. Even with the fast-growing adoption of digital channels, the ATM remains a primary interface between customers and their banks for one simple reason: they’re convenient.
By extending that convenience to additional actions like account openings, bill payments, mobile phone top-ups, currency exchange, and more, tellers in the branch will have more time to work with customers on complex banking needs.
The Historic Precedent
One of the biggest arguments against smart ATMs is the same one that people put forward in the mid-1990s when today’s standard ATMs were brought in in large numbers. Everybody assumed – including many bank managers — that this was going to eliminate jobs for tellers. It didn’t. In fact, since then, teller jobs have increased substantially.
So how could a machine that was designed to perform many teller services provide a boost in positions for tellers? Simple: By making it cheaper to operate a branch. Where the average branch previously required around 21 tellers, with ATM machines that number was reduced to 13. So suddenly you are able to open a smaller branch, with fewer employees, leading to more branches, which required more tellers.
So the 400,000+ labor saving ATMs currently installed at branches across the United States are directly responsible for creating more jobs and allowing banks to expand their operations, while simultaneously allowing tellers to provide a higher level of customer service.
With this in mind, the world today is not the world of the 1990s. Nowadays, our lives have been inundated with convenient self-service options. In fact, industry CX research consistently finds that a majority of consumers now prefer self-service channels for resolving routine service issues, rather than speaking with live representatives.
This shift is reflected in a broader ATM modernization cycle, where operators are actively upgrading legacy machines to next-generation smart ATMs with enhanced digital, contactless, and self-service capabilities. These new ATMs provide contactless transactions, mobile pre-staging, and financial institution “branch-in-a-box” capabilities, delivering up to 90% of branch-based technology and services.
Large monolithic branches have already become a remnant of the past, and smart ATMs will allow branches to have an even smaller footprint. By providing a self-service option for these transactional services, we could very well see a surge in branch numbers similar to the one experienced during the mid-1990s as more smaller branches with lower staffing requirements become the mainstream. And while it’s been forecast that teller positions will likely decrease as smart ATMs gain popularity, the decline was forecast at just 8%—hardly an industry killing technology.
Instead, these machines should be viewed as complementary to the human role, and a tool for creating increased demand and efficiency while enabling staff to concentrate on building stronger human relationships.
Conclusion
The truth is, there is no benefit to having the many of the transactional processes that can be performed by smart ATMs to be handled through face-to-face interactions. Relationships are not built through these engagements, and convenience is not enhanced by them. And these two factors should be the primary goals for a future focused branch.
For the few customers who simply prefer to perform these actions through a teller? They still have that capability. What’s more, if the lobby has been upgraded as discussed in the previous strategy, now they can do it while sitting in a comfortable lounge, speaking to a teller that comes to them. When you future proof your branch, everybody wins.
Check out the other articles in the Future Proof Branch Strategies Series:
PART ONE – Self Service Kiosks
Examining the benefits and capabilities that self service kiosks can bring to your branch by eliminating many of the pain points that customers associate with their visit.
PART TWO – Café Style Branches
We discuss design changes in the lobby that can help to encourage relationship building and conversations between advisors and their customers.
What Next?
Looking for more strategies to meet your customers’ changing expectations around the in-branch experience? Download the full report Becoming Future Proof: Five Proven Strategies for the Branches of the Future to learn more methods in technology, design, and service that branches can take advantage of to adapt in the rapidly changing financial landscape.
Interested to hear what top experts in financial customer experience have to say about the coming challenges branches are looking forward to? Watch our panel discussion Embracing a Customer-First Mindset: Eliminate Friction Points in Your Customer Multi-Channel Journey.
Ready to start taking steps to ensure your branch is set up to meet your customer’s evolving expectations head on? Schedule a consultation with Coconut Software to learn more about how our tailored solutions can help.
Product Info
Appointment Scheduling Data Sheet
FAQs About Smart ATMs and Future‑Ready Branches
How do smart ATMs fit into Future Proof Branch Strategies?
Smart ATMs are a core part of broader “Future-Proof Branch Strategies”, which also include investments in self‑service kiosks, café‑style branches, remote video banking, and simplified scheduling. Together, these approaches help banks and credit unions reduce low‑value transactions at the teller line and free staff for higher‑value advisory conversations.
What’s the difference between Smart ATMs and traditional ATMs in these strategies?
Traditional ATMs focus on cash withdrawals, deposits, and balance inquiries. Smart ATMs expand that to include things like bill pay, account opening, and even “branch‑in‑a‑box” capabilities that can deliver up to 90% of typical branch services.
This allows financial institutions to right‑size their physical footprint without sacrificing access or service quality.
How do Smart ATMs work alongside self‑service kiosks in the branch?
Smart ATMs handle cash‑related and transactional needs, while Self Service Kiosks: Future Proof Branch Strategies focus on lobby management—check‑in, queuing, and routing customers to the right advisor or service. Used together, they streamline both the transactional and arrival experiences, reducing wait times and making it easier for customers to reach the right person or tool quickly.
What role do café‑style branches play alongside Smart ATMs?
Branches redesign their lobbies into comfortable, conversation‑driven spaces that encourage longer visits and deeper financial discussions.
Smart ATMs in these locations handle routine transactions in the background, ensuring staff can stay focused on advisory and coaching‑style interactions rather than cash handling or line management.
How does remote video banking complement Smart ATMs?
Smart ATMs extend transactional convenience, while Remote Video Banking: Future Proof Branch Strategies extends human advice beyond the branch walls. Video banking lets customers meet with specialists remotely—often the same local advisors they’d see in‑branch—so branches can balance digital convenience with human connection.
Together, smart ATMs and remote video banking support a seamless, hybrid service model.
Where does appointment scheduling software fit in with Smart ATMs?
Simplified Scheduling: Future Proof Branch Strategies shows how unified appointment scheduling ensures that when customers do visit a branch—whether they started at a smart ATM, website, or contact center—they can quickly book time with the right expert.
Smart ATMs remove friction from transactions; modern scheduling removes friction from getting face‑to‑face advice.
About Us: Coconut Software is the leading solution for banks and credit unions seeking to boost operational efficiency, deposit growth, loan growth, cross-channel seamlessness, and competitive CSAT and NPS scores. For over a decade, we have been the market leader in bank appointment scheduling software, branch data and analytics, lobby and queue management, and video banking, helping our customers achieve increased CSAT, bigger ROI, and growth across all lines of business. Get in touch with us today to learn more.