by Darren Smith | Originally published by CUInsight
In today's rapidly evolving financial landscape, community banks and credit unions face both challenges and opportunities. As big banks continue to close branches, creating banking deserts across the country, smaller institutions, especially credit unions are stepping up to fill the void. But building branches is an expensive outreach strategy.
One powerful and affordable option for expansion is ATM outsourcing, which allows community banks and credit unions to extend their reach without the hefty investment of building new branches. In this article we explore how ATM outsourcing is revolutionizing financial institution growth in underserved areas.
Filling the Void Left by Big Banks
Recent years have witnessed a significant decline in traditional bank branches. In 2023 alone, 1,409 branches closed their doors, following 1,854 closures in 2022 and a staggering 2,928 in 2021. This trend has left many communities without easy access to financial services, creating what industry experts call “banking deserts.”
As these banking deserts emerge, credit unions and smaller banks are seizing the opportunity to expand their footprint in new communities. However, building a full-service branch in a new area often requires a substantial account holder base to justify the investment. This is where ATM outsourcing comes into play, offering a cost-effective solution to establish a presence in new markets.
ATM Outsourcing: A Strategic Solution
ATM outsourcing allows financial institutions to deploy branded ATMs and Interactive Teller Machines (ITMs) in strategic locations without the high costs associated with building and staffing a traditional branch. This approach enables credit unions and community banks to serve existing account holders, attract new ones, and increase brand visibility in target areas.
Banks and credit unions can leverage ATM outsourcing to place off-site ATMs in various high-traffic locations, such as:
Drive-up ATMs in busy parking lots
ITMs at local grocery stores or other retail environments
Branded ATMs at convenience stores
ATMs at local employer locations
These strategically placed machines provide convenient access to financial services, helping credit unions and smaller banks expand their service area and attract new account holders.
While managing off-site ATMs can be challenging at the best of times, when machines are located in the next county, across the state or even in the neighboring state, it can become even more time consuming and expensive. However, ATM outsourcing providers specialize in handling all aspects of ATM and ITM operations - overcoming these challenges.
Benefits of ATM Outsourcing for Expansion
Affordable ATM outsourcing provides numerous advantages for financial institutions looking to expand:
Cost-Effective Market Penetration: Establish a presence without the high costs of building and staffing branches in new areas.
Increased Service Area: Attract new account holders and serve existing ones in a wider geographical area.
Enhanced Brand Visibility: Branded ATMs increase awareness and reinforce your commitment to the community.
Operational Efficiency: Outsourcing providers handle maintenance, cash management, and security, freeing up financial institution resources.
Scalability: Easily adjust the number and location of ATMs based on need and market conditions.
As the banking industry continues to evolve and big banks close branches, credit unions and community banks must adapt to remain competitive and grow. ATM outsourcing offers a flexible, cost-effective solution that allows for:
Quick response to market opportunities
Providing service to consumers in banking deserts
Competing with larger financial institutions
Providing 24/7 access to essential financial services
As banking deserts continue to grow and consumer preferences shift towards digital and self-service options, credit unions and community banks have an opportunity to position themselves as innovative, consumer-focused institutions ready to meet the changing needs of their communities.
And ATM outsourcing or managed services are powerful tools that allows growing financial institutions to leverage off-site ATMs and ITMs to establish a presence in underserved areas, attract new account holders, and enhance brand visibility – all without the substantial investment required for traditional branch expansion.
Ready to grow your financial institution? Discover how ATM outsourcing can provide a competitive advantage.
Darren Smith, Vice President, ATM Management
darren@atmusa.com • 919-534-3232 • Schedule a Meeting
Craig Helmers, Vice President, ATM Management
craig@atmusa.com | 919-534-3233 | Schedule a Meeting
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