For those of us that were born before 1980, we remember that all banking transactions were done with a teller in a “brick and mortar” bank.
Then, around late 1970s … BAMM! … the automated teller machine was invented. The first models could not even dispense individual currency bills, but instead distributed envelopes with pre-counted currency that slid down out of the machine. There was no screen, but a “roller” with pre-printed messages that scrambled around based on what the machine needed to communicate. Banks scurried to convince, market and promote the machines to get people to adopt this new free (yes, i said free) service. For those of us that are older … a trip down technology memory lane!
Where was banking? Pay bills, transfer funds, view balances … somewhat casual manual functions all transitioned to technology. It was pretty easy thanks to the web/online world. No “physicality” required. You could have done the same thing by telephone banking (that service is gone!).
Extremely disruptive technologies (or labor) started to come about in banking. There were teller devices that process transactions directly. Then, ATMs added technology to scan checks. What did this disrupt? Banks required to have data entry personnel to add MICR to the bottom of the check for the check amount. These “characters” had to be mechanically read and processed later.
Where is banking now? Now depositing checks by taking a picture and processing the transaction through smartphones is commonplace. Crazy! While I receive 15-20 paper checks a year … I have not been to a bank or ATM to deposit a check in a LONG time. There is no need to. After taking a picture of the check … here is what the bank does:
- … their systems (I assume) reads the handwriting and MICR off the image; stores the information in the bank’s databases.
- … then process the data “scraped” off the paper check image through their systems electronically.
- … store the paper check image (done by the customer) in the bank’s databases for retrieval.
- … never have to leave the house!
According to a Pew Research Center report, 2013 was a tipping point where the majority of consumers did their banking online instead of a typical bank branch. Another study by Chemical Bank found that the consumers use mobile banking an average of 4-5 times per month. This trend will clearly increase due to the fact that 43% of 18-29yo use mobile technology for banking; compared to 6.1% for those over 60yo.
Where is banking technology trending? Teller Assist is being tested by Bank of America. Using this functionality at an ATM, customers can complete various transactions, through live video and audio, as if they were being completed by a teller.
Converging ICT allows ATMs and human beings to provide quality banking services while they remain competitive and contain costs.
All technology (does) matter!