Thanks to a wealth of new technology, the ATM could soon become a card-free, one-stop banking experience. In the realm of consumer banking, it's a change that is sorely needed. American banks are under pressure to not only better protect consumers from identity theft but to slash their overhead costs in their increasingly expensive bricks-and-mortar branches.
Here’s a preview of some of the most interesting ATM innovations to come:
Automatic Palm Reading Machines
OK, we made that name up ourselves, but it’s not too far from the truth. New palm scanning technology could make the ATM experience completely debit card and PIN-free.
According to a spokesperson, JPMorgan Chase (JPM) has been working with technology firm Fujitsu to create its first palm-scanning ATM, which would identify users by their hand print.
Before you get grossed out by the idea of sticking your hand on communal scanner, hang on to your hand sanitizer. Fujitsu’s scanner, called the PalmSecure, only requires you to hover your hand over the actual device, never making direct contact.
How it works: The scanner radiates infrared rays onto your palm, which are absorbed by the blood flowing through your veins. The scanner can see the pattern created by the veins and verifies your identity by snapping a quick photo. Sounds complicated, but as you can see from the video below (skip to the 40-second mark) it takes about two seconds.
Fujitsu has already successfully rolled out palm-scanning ATMs in Japan and Brazil. In the video below, you can see how palm-scanning ATM might work, although the demo only shows PalmSecure as it would be used to grant physical passage to a building.
Express Banking Kiosks
While Chase works on palm scanning ATMs, it’s already been plenty busy turning their existing ATMs into fully-functioning mini-banks.
The bank has rolled out nearly 1,000 “Express Banking Kiosks” in 400 of its U.S. branches. The EBKs let customers withdraw money in a variety of denominations, like $1 and $5 bills, and offer higher daily withdrawal limits than standard ATMs (much like a regular bank teller does). At night, Chase banks will release a separator between the EBKs and the rest of the bank, giving customers access after banking hours.
The “Face” ATM
Like something out of an episidoe of "Homeland," ATM-makers are working to create machines that can detect who customers are based soley on their facial attributes.
"We have tested many biometric methods including facial recognition," says Devon Watson, Vice President of New Business and Solution Incubation, for Diebold. "Our ATMs support a full range of biometric authentication methods in order to meet the demands of financial institution security needs and cater to the differences in consumer acceptance around the world."
It sounds cool (and it is), but consumers who have privacy concerns may want to note the fact that these types of ATM models require users to let them store a copy of their biometric measurements — that is, facial measurements that show how far apart your eyes are and where your cheekbones fall that help them identify people.
Facial recognition ATMs are a long way off from being introduced in the U.S., but they are already being developed in other parts of the world. Brazilian ATM-maker Itautec introduced the world’s first touch-free, 3-D imaging ATM at a trade show in 2011. The challenge so far has been to find a way for these ATMs to reliably recognize 3-D images, otherwise anyone with a clear photograph of a person could potentially pose as them.
You can watch a demo of Itautec's face-scanning ATM here (skip to the 1:30 mark), but just a warning that it's scripted in Portuguese.
The days when people hustled to the bank after work only to find rows of empty desks and a padlocked door may soon be over thanks to the advent of virtual bank tellers.
Dollar Bank was among the first to introduce video teller machines in early 2012. Bank of America (BAC) brought the technology mainstream when it rolled out its first fleet of virtual teller ATMs in 2013.
In addition to offering basic services (cash and check deposits, withdrawals, and balance checks) the machines, which were created by Ohio-based technology securities firm Diebold, offer customers access to live bank tellers via webcam during extended business hours. On top of that, you can make loan and credit card payments and access your account with a government-issued photo ID if you don't have your bank card handy.
It’s no secret that American banks are behind the curve when it comes to adopting technologies that can help better protect consumers against identity theft. ATM skimmers — those little hidden cameras that record PIN and debit card information when customers access ATMs — are still a favorite among thieves who target ATMs.
One of the ways to crack down on this type of crime is to eliminate the need for debit cards altogether and instead use smartphones and cloud technology to access accounts.
Wintrust and City National are both working with banking and payment technology firm Fis Global to create a cardless cash ATM. The new system lets customers set up withdrawals from their smartphones and access their cash by scanning a unique QR code from their phone at the ATM. The entire process happens in the cloud, between the smartphone and the physical ATM.
ATM-maker Diebold also offers a card-free ATM model, which comes with a bonus perk: Users can use the app to arrange quick money transfers by selecting a recipient from their contacts list. The recipient then receives an SMS text with a one-time PIN and can pick up the cash at a participating ATM.
See Wintrust's cardless ATM in action below:
If ATM makers have it their way, those giant boxy piggy banks that we all find so very convenient today will soon seem just as outdated as parachute pants and bowl cuts.