This TowerGroup Research Note considers the evolution of today's open Web-enabled ATMs. It traces the history and architecture of ATMs from their inception in the late 1960s as cash dispensers through to today's open Web-enabled ATMs that can provide, not only cash and depository services but also secure and highly reliable access to the bank's evolving Internet and Web functionality. The forces that shaped the evolution of ATMs over the last 30 years are examined. The Note describes the hardware and software architecture of this new class of ATMs that can participate fully in the delivery of bank products and services and redefine the relationship of the ATM to the customer and bank.
Additional Information
Highlights
Automatic teller machines (ATMs) have a much more extensive history than many realize. Since their inception in late 1967 as offline cash dispensers, ATMs quickly evolved. Within a very few years online networked systems that offered not only cash but also depository and transaction services were available.
First-generation ATMs, while functionally similar to today’s systems, were somewhat experimental. These early ATMs were based on technology that was unique to the ATM vendor and oftentimes the bank. Because of their unique characteristics, they were deployed as an entirely separate “siloed” delivery channel.
In the late 1970s and early 1980s second-generation ATMs became available. These contained a number of technical improvements that reduced cost, provided somewhat improved ATM application functionality, and standardized the ATM communications and networking infrastructure.
In the mid-1980s third-generation ATMs began to emerge. These offered substantially improved configurability and upgradability.
In the late 1980s fourth-generation ATMs based on PC technology began to appear. These provided somewhat improved application flexibility and laid the foundation for advanced ATMs.
Today, a new fifth-generation of open Web-enabled ATMs is being deployed. These promise to allow banks to extend ATM functions well beyond their traditional depository, cash, and transaction roles and to allow ATMs to participate fully in the delivery of bank products and services.
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