Declining ATM Volume Doesn’t Need to Affect You

A recent ATM industry report indicated that ATM transaction volume in the U.S. has declined for the second year in a row. After a decade of steady growth in ATM deployments and ATM transaction volume, in 2005 the ATM industry experienced a decline in both.

With such a change in the market, how can you ensure that your financial institution takes full advantage of your ATM fleet?

Although there are many factors that contribute to addressing this dilemma, many financial institutions are finding a simple solution in more effectively branding their ATMs. By improving the way their ATMs are branded and presented, they are attracting new customers, keeping their ATM transaction volume healthy, and strengthening their brand.

Changing Market Dynamics
The use of consumer debit cards has increased dramatically over the last decade. From 1996 through 2005, monthly PIN-Based transactions have steadily increased at an average rate of 28% per year. Over the same period of time, total ATM transaction volume in the U.S. has remained relatively stable, with an average decline of 5% for the last two years.

However, even though the total monthly ATM transaction volume has fluctuated between 840 million and 1.1 billion during the last decade, the per-ATM transaction volume has been steadily decreasing. As more and more ATMs were deployed, the per-ATM transaction volume naturally declined. While the number of ATM terminals in the U.S. has grown from 139,134 in 1996 to 396,000 in 2005, the per-ATM transaction volume has dropped from 6,399 to 2,214.

With such a dramatic drop in per-ATM volume, financial institutions are left wondering how to best leverage their fleet of ATMs.

Large Banks Still Increasing ATM Fleets
When any industry is faced with declining market trends, companies often compare their particular situations and strategies with those of the leaders in their industry. With that in mind, it is interesting to note that 8 of the top 10 ATM owners in the U.S. increased their number of ATMs over the last year. While the 2 that did reduce their number of ATMs did so by only 1%, the other 8 increased their number of ATMs by an average of more than 8%.

By examining what the top 10 U.S. ATM owners are doing, other financial institutions can develop similar strategies to strengthen their own ATM business. So why in a time of declining per-ATM transaction volume would the industry leaders continue to increase their ATM fleets?

First, it appears they have found additional benefits in having large ATM networks. And second, they are effectively branding every ATM they deploy.

Benefits of Your ATM Network
Financial institutions originally began deploying ATMs over 25 years ago as a way to extend their services and reduce transaction costs. While these early benefits of ATMs are still in force today, banks and credit unions have also found ATMs to be an additional source of income through transaction surcharges. In deed, much of the large growth in the ATM industry over the last decade was primarily due to the income potential that ATMs promised.

With the proliferation of ATMs in such a wide variety of locations, consumers have adapted to seeing ATMs everywhere and have come to expect this level of access to cash from their financial institution. Higher expectations from customers have motivated leading banks to use their large ATM network as a prominent feature in their advertising. The very nature of having ATMs easily accessible to the consumers then becomes a benefit in and of itself.

Effectively Branding Your ATMs
Having an ATM in a consumer friendly location is still not enough to drive increased ATM volume. Even though consumers are accustomed to finding ATMs in most locations, placing a plain grey ATM machine in a corner may not drive the traffic you anticipate. Again, we can learn much from examining what the top ATM owners are doing to draw traffic to their ATMs.

“The leaders in ATM deployments make the most of their ATMs by projecting their brand at every location,” says Al Tiley, President and CEO of Companion Systems Design & Manufacturing, a leading provider of ATM surround, enclosure, and signage products. “Whether their ATMs are located on or off-site, their brand is prominently displayed in the style and colors that surround their ATMs. When customers happen by, they are immediately impacted by the brand.”

Customers often get cash back when using their debit cards at a retail location because the sales associate prompts them to act. They directly ask if the customer wants cash back, causing them to think about their need for cash. By properly branding your ATMs, you can reach out to customers in a similar fashion by prompting them to act.

Attracting Attention and Driving Transactions
When your ATMs themselves become billboards for your bank or credit union, you can attract customers at the point of impact. When advertising your services, whether on TV, radio, or in print, you hope to drive customer behavior. But many times, this requires that a customer recalls the ad later to act. If they are reading a newspaper, watching TV, or driving by a billboard when your message appears, you hope they remember later to conduct business with you. But if your advertising is the ATM itself, your services are right at their fingertips.

The top ATM owners understand the importance that effectively branding an ATM has on ATM transaction volume. And they take full advantage of it.

When you see a Bank of America ATM, you know it’s a Bank of America ATM. When you see a Wells Fargo ATM, you know it’s a Wells Fargo ATM. The same can be said for every Chase, Citibank, Wachovia, or Washington Mutual ATM in any location.

“The good news is that strong branding and attractive ATM signage isn’t limited to just the big banks,” states Mr. Tiley. “Regardless of the size of your ATM network, whether it’s 1 ATM or 1,000 ATMs, by more effectively branding your ATMs, you can attract attention to your ATMs and drive increased transactions.”

Many Ways to Brand Your ATMs
Just as there is a wide variety of ATMs and locations to place your ATMs, there is also a wide variety of ways to brand your ATMs. Whether it’s with an ATM surround, enclosure, kiosk, canopy, or topper, you can select the options that best fit your needs at each location.

ATM surrounds are the perfect way to brand any through-the-wall walk-up or drive-up ATM you may have. By surrounding your ATM with the colors of your brand, and prominently displaying your logo or image in a backlit header sign, it makes your ATM very appealing and easy for your customers to locate.

ATM enclosures are a great solution for branding your free-standing ATMs in any lobby or retail location. With full side panels decorated in your custom colors and a prominent backlit display above the ATM, the customer’s attention is now targeted directly to your brand.

For outdoor island ATMs, there is simply no greater branding impact than a large drive-up ATM kiosk. By utilizing all of the space on a drive-up ATM kiosk to promote your brand, you effectively create your own 4-sided billboard. It’s hard for customers not to take notice when they pass your large drive-up ATM kiosk in a parking lot or other outdoor location.

Another effective way financial institutions are attracting attention to their island ATMs is through the increased use of ATM canopies. Although the surface area to advertise your brand is greatly reduced from an ATM kiosk, the height of an ATM canopy can easily be seen from a long distance to attract customers to your ATMs. And with the bright down-lighting and backlit signs in both ATM kiosks and ATM canopies, customers can easily find your ATMs even at night.

Make Your Brand Stand Out
In any retail environment there is a lot of competition for attention. Your ATMs, and your brand, needs to stand out to be used. If you want to see increased volume at your ATMs, then make sure your ATMs stand out by effectively using graphics, colors, and lighting. And the best way to do this is through the valuable use of branded ATM environments.

In a time of declining ATM transaction volumes and increased competition for ATM traffic, attracting customers to your ATMs through effective branding becomes more important than ever.

About Companion Systems
For over 25 years, Companion Systems has worked with thousands of financial institutions to help them make the most of their ATM environments. As such, they are intimately familiar with the challenges facing banks and credit unions today and will work closely with you to develop solutions that most effectively brand your ATMs.