WICHITA, Kan. - While ATMs are now decades old, bankers and industry officials say the machines remain a key part of how banks and credit unions deliver services.
Advances in technology, changing regulations and customer acceptance have aided ATMs' longevity and place as a necessary part of banking. In some parts of the country, banks continue to use them to test new markets -- a low-cost alternative to building new branches.
"People still need to get cash, and we really haven't figured out how to get cash out of your phone yet," said Rod Pitts, division director of consumer banking at Wichita-based Intrust Bank.
But ATMs have evolved to the point where their transactional functions have been almost fully tapped. Consumers not only can get cash from them, but they also can use them to transfer funds from one account to another and deposit checks and currency -- without filling out deposit slips.
Their relevance in coming decades will be determined in large measure by how successful financial institutions are in finding new ways to use the machines outside of transactions, with functions and features banking customers will want, experts said.
Chemical Bank in New York was the first bank to have an ATM, in 1969. But their widespread deployment wouldn't come until the 1980s.
"In the very beginning it was helping to get people out of the teller lines who just wanted cash," said David Kerstein, president of Peak Performance Consulting Group in Austin, a retail banking consultancy.
Consumer acceptance wasn't immediate, one bank executive said.
Monte Cook, executive vice president of retail banking for Commerce Bank in Wichita, said when the bank introduced ATMs, many customers had a lot of trepidation about using them. They were concerned the ATMs weren't secure or were afraid of being embarrassed because they didn't know how to use them.
One of the ways they lower banks' operating costs is by reducing the need for tellers. "It has, over time, had an impact on tellers," Kerstein said. "But I don't think it's been the big, driving force."
With the emergence of debit cards in the 1990s, ATM use began to dip, bankers said.
But implementation of the Check 21 Act in 2004 helped boost their use. The act allowed banks to substitute paper checks with electronic images of them. That paved the way for development of ATMs that allow customers to deposit checks and currency without a deposit slip or envelope.
Tom Morrison, Intrust's senior manager of bank operations, said check imaging has helped his bank spot fraudulent transactions and process paper checks faster.
David Tente, U.S. executive director for the ATM Industry Association, said such high-tech ATMs cut the cost of processing a deposit through a teller and other staff by about 60 percent.
What's ahead is figuring out other functions or features customers want, and which are feasible.
"The trend that I've seen is a little less emphasis on deploying ATMs and much more emphasis on how can we make them more like a full-service outlet," Kerstein said.