Why neobanks are taking ATMs back to basics

For years, the ATM has been a key customer touchpoint for traditional banks. Today, neobanks are taking a different approach.

Rather than treating the ATM as a primary touchpoint, Neobanks are starting to position it as part of their wider digital journey. The mobile app is the primary tool for customer engagement, while the ATM’s role is to make cash access as quick and frictionless as possible.

Instead of using ATM scenarios to promote loans, credit cards or branch services, neobanks are keeping interactions simple. What were previously considered ATM features, such as cash recycling, account transfers, printed statements and PIN changes, are no longer available within the neobank model. ATMs have gone back to basics and are used as cash dispensers and balance enquiries, albeit with a digital-first spin - for example for cardless, touchless and emergency cash operations.

The shift isn't really about making ATMs less capable - it's about moving banking functions from hardware to software. Neobanks have concluded that most customers don't need an ATM to do everything if their phone can do it better. Operating full-service ATMs is expensive, while smartphones are cheaper and offer a more intuitive experience.

This isn't necessarily a reduction in functionality for the customer - it's a relocation of functionality. Tasks that once required a visit to an ATM are now completed in seconds from a smartphone, leaving the ATM to do what it does best: dispense cash when physical money is needed.