Artificial Intelligence (AI) has emerged as a major disruptor in almost every industry. One of the biggest beneficiaries of this technology is the banking industry. Banks now offer their customers customized apps powered by AI. They come with nearly all the features offered by a traditional bank, meaning customers can now carry out nearly all types of transactions from the comfort and convenience of their homes. AI has helped banks become more customer-centric. AI-based systems have also found their way into ATMs or Automated Teller Machines.
There is hardly anyone who must not have experienced a situation where ATMs in a specific location have run out of money simultaneously. It is a highly undesirable situation for banks to miss out on the opportunity to fulfill the cash needs of their customers through ATMs.
Even the reverse situation is also not good – cash idling in ATMs and not being accessed for long periods.
How AI Is Changing ATM Utility
Banks using AI to manage the working of their ATMs are doing better than those who aren’t. In most industries, the use of AI is generally focused on the automation of manual processes. AI also spruces up conversational platforms through chatbots. But some industries use AI to make machines smarter, and the banking industry is one of them.
AI capabilities have been embedded into ATMs to perform tasks more effectively. These machines can forecast demand more precisely and tell the banks when they must restock the ATMs so that no customer goes back for want of cash in the machine.
An artificial intelligence-powered ATM ensures cash flows resourcefully through the ATM network of a bank. After close consultations with financial institutions, engineers implement the chosen AI technology. They help satisfy modern banking needs so that they can comply with the best and most established cash management practices.
Benefits Of Using AI For Bank ATM
Optimizes Multiple KPIs (Key Performance Indicators)
Powerful algorithms with multiple objectives can help reduce errors in the decision-making process in a banking facility. AI can help identify the supply plans, thus improving multiple KPIs simultaneously. Identifying the needs of various ATMs can help reduce the number of trips for loading and unloading cash without affecting its availability in the ATMs.
Reduces Cash Transportation Costs
AI can help reduce the number of trips the cash delivery vehicle takes to various ATMs in a locality. Accurately identifying the cash needed in an ATM on average for a week can reduce the volume and value of cash transported and mitigate the risks associated with these operations. AI can reduce fraud, theft, error in counting cash, and service interruptions during peak hours.
Eliminates Idle Cash Situation
AI-powered ATMs constantly learn to decode cash withdrawal patterns. Predictive models are highly precise and make it possible to minimize the overall level of cash. This helps eliminate the problem of excess cash idling in the drawers of ATMs.
Predicts Peaks of Cash Withdrawals
AI software systems connect to a proprietary database. They demonstrate variables that establish a high level of correlation with the cash needs of customers. The system can also accurately predict cash withdrawal during specific periods such as holidays, local events, crises, and even weather data.
The Importance of Smart ATMs for the Modern Banking System
AI-powered smart ATMs benefit from RNNs or Recurrent Neural Networks. It is a specific type of deep learning method designed to handle sequential data such as speech, text, or time series.
The recurrent element in RNN means they accomplish the same task for every element in a sequence. In an ATM, that information could be about withdrawals from cash machines.
- The output for each element is contingent on the computations of its previous elements.
- They are excellent at forecasting, especially when there is a recognizable demand pattern.
- They can make accurate forecasts of future demand based on previous events.
AI needs a lot of data to deliver results. With AI, more data always leads to enhanced performance and boosts accuracy.
ATMs powered by AI technology can judge the demand for cash from a cash machine based on its location, local events, time of day or week, etc. For instance, a machine in or near a student hostel is likely to be heavily used on a Saturday night and remain empty on Sunday. An ATM located in a shopping street is more likely to be used steadily over the week and might see a peak demand on weekends.
Holiday periods may also affect demand and replenishment. RNNs take into account short- and long-term variations in demand and incorporates the same into the system to improve the forecasting accuracy and predict the requirements for refilling the machines.
ATMs driven by AI have more functionality than simply dispensing cash smartly. Smart ATMs can help consumers open accounts, deposit cash, and check, or transfer funds. Banks can use ATMs to reduce their physical footprint to make way for more self-service, smart banking options, thus making their overall operations more profitable and efficient. AI-driven ATMs can provide secure solutions more quickly and make life easy for all stakeholders.