Automated Teller Machine (ATM)

Author: Nora Lewis

Suggested Citation:

Lewis, N. (2026). The automated teller machine (ATM). Technology Assessment Project Case Study Library, University of Michigan. https://stpp.fordschool.umich.edu/tap-case-study-library/automated-tell…

The Automated Teller Machine (ATM)

Key Takeaways

• Dispatchable and modular iterations of a technology have the potential to expand access to resources for broader populations, particularly communities of color, low-income communities, and rural regions.
• These technologies can be stabilizing, particularly in times of political or environmental crisis.
• Yet these dispatchable and modular technologies must be distributed equitably to close disparities in resource access. In addition, these dispatchable and modular technologies may not always align with community values and needs.

Brief History of the ATM

The ATM, or automated teller machine, has vastly reimagined what banking looks like today. Many attribute the first official machine to British inventor John Shepherd-Barron, who rolled out an early iteration of the modern ATM on the streets of London in 1967. Several different versions of automated cash withdrawal services were developed in Japan and Sweden earlier in the decade, but some mark Shepherd-Barron's machine as the first major step toward today's digital banking. The Shepherd-Barron ATM looked the most similar to ATMs today out of all these early models, but several key differences existed. Users needed to insert a paper voucher in the machine, input a personal identification number (PIN), and could be dispensed only a small amount of cash.

The development of the ATM gradually became more advanced with the efforts of American engineer Don Wetzel, alongside two colleagues who helped develop the first networked ATM in 1968. This version, installed by Chemical Bank in New York in 1969, fostered more sophisticated interactions with banking systems, setting the stage for widespread global adoption of the ATM in the decades that followed. Over the years, advancements in technology and security measures have transformed ATMs into versatile banking tools, altering the face of banking altogether while providing financial services in an efficient and convenient manner.

Minimizing Human Contact While Increasing Convenience

The ATM has given us the ability to interact with our money without ever having to step foot inside a physical bank. No longer constrained by a conventional work-day schedule or the availability of a human, ATMs allow flexibility and rapidity in accessing cash. They are small machines that can be assembled in a wide variety of environments, making them an easy, less space-intensive and employee-intensive way to bank. ATMs are now a convenient fixture in how we deal with our finances, and they support commerce, travel, and other personal day-to-day needs.

Banking Labor Force Shift

A contentious question remains: have ATMs and automation more broadly harmed the labor market for bank tellers? The answer remains somewhat unclear. For many decades there was a clear increase in bank teller jobs, from just under 300,000 in 1970 to about 600,000 by 2010. Some, like former Google CEO Eric Schmidt, have argued that despite the rise of the ATM in this period, more bank teller jobs were created as branches became more efficient. Fewer tellers were needed at each bank, and as a result more branches could be built due to lower operation costs per branch. More branches meant more tellers hired on the whole, an understanding some have rested on to illustrate the non-destructive role of automation in this case.

Although ATMs replaced some face-to-face teller duties, they can also be seen as a streamlining force. Tellers who in the past may have spent most days handling cash deposits and withdrawals could shift their responsibilities toward more "value-added" tasks with the addition of the ATM. Bank tellers could be harnessed for their marketing and interpersonal skills, their "humanness," more than their cash-handling abilities. There is some evidence that banks have been hiring more tellers with college degrees and at higher wages, which could point to higher valuations of this new kind of teller work. This modern model of bank operations has the potential to be a more efficient and client-focused kind of banking for the digital age.

Still, others might point to more recent numbers, like a 15 percent decline in human teller jobs between 2022 and 2023, to signal a less favorable outcome of the ATM. The number of total bank branches has declined in the past several years, largely due to digital banking tools such as mobile check deposits and cash transfers that have moved operations away from the physical bank. The U.S. Bureau of Labor Statistics predicts that the number of bank tellers will shrink in the next decade because of this automation and the concurrent downsizing of branches.

Other automated changes on the horizon, such as ATMs equipped with webcams so tellers can virtually interact with customers, are a signal not of elimination but of a physical relocation of the bank teller job. These Interactive Teller Machines, or ITMs, lessen the need for branch offices by encouraging remote teller work. Instead of sidestepping the role of human connection in banking altogether, ITMs attempt to distill "humanness" down to its most convenient and dispatchable form, bringing the teller directly to the customer. Still, this decentralization of banking employees to just a few ITMs instead of a physical bank can lessen community trust and familiarity with banking institutions. ITMs might not be necessary for every community, especially if mobile banking services and standard ATMs can take care of most functions already. The financial trade-offs of an ITM might also not make sense everywhere, as the machines themselves are expensive, often costing hundreds of thousands of dollars, and would require the training of virtual staff.

Both ATMs and mobile banking have surely shaped the labor market in major ways, but there is not yet a clear picture of whether these developments threaten to make tellers obsolete entirely. There is the potential for more of the interpersonal duties of the teller, such as financial planning advice and loan assistance, to be embedded into automated telling machines in the future. These changes could undercut the marketing and customer service focus of contemporary teller roles, but until (or if) these changes become widespread, there remains an understood need for human tellers in some capacity. Still, what their day-to-day duties look like continues to be shaped by the landscape of digital and automated banking.

ATM Distribution in Rural and Underserved Communities

One of the central appeals of the ATM is its dispatchability. Whether living in the dense enclaves of a major city or a rural town miles from the nearest bank, ATMs can theoretically provide crucial financial services for an immense diversity of residents. But does this always happen in practice? Not everywhere.

Rural American communities are vastly underserved by banking and financial institutions. Their low population density and high costs of construction limit local access to crucial services, saddling residents with less convenient and efficient relationships with their personal finances. Rural locales are also less likely to have reliable broadband access for mobile banking services, meaning that access to alternative means of cash access beyond in-person banking can also be limited. ATMs have in many cases been a helpful solution for this wider economic disempowerment, but the spread of these machines remains inconsistent across rural America. Native American communities are harshly impacted by this, with the distance from a tribe's reservation to the nearest bank averaging 12.2 miles. ATMs have the potential to be a forceful agent of change in communities with limited financial services, but they must first be placed more intentionally in these underserved communities to close the gap.

Even in more well-populated suburban and urban communities, access to ATMs is still inconsistent and often divided along lines of wealth and race. Poorer communities and communities of color tend to see fewer financial institutions based in their immediate neighborhoods, meaning they must venture further distances to gain access to their finances. ATMs too are spottier in these communities and might face obstacles such as negligent machine maintenance and costly surcharge fees that ultimately undermine their accessibility aims.

Some ATM access initiatives have taken root over the decades in urban centers, such as a 1999 ATM pilot program in Baltimore which sought to increase access to safe banking services via ATMs placed in post offices across the city. The ATMs also enabled access to Maryland Electronic Benefit Transfer (EBT) services and lacked fee charges to ensure those receiving cash benefits from the state could access their personal finances with ease. In 2016, Citibank announced that it was placing roughly 2,400 ATMs in cities like Chicago, Los Angeles, and New York, specifically targeting customers of minority-owned banks and credit unions. The initiative sought to both increase ATM access and more broadly spur these local economies by increasing the number of residents taking out cash and spending it at local businesses. Both this initiative and the Baltimore program incorporate more locally-tailored uses of the ATM.

ATMs: The Great Financial Equalizer?

The above efforts aimed at increasing ATM access are admirable, but must confront a greater reality of racism and classism at work within financial institutions. Historically, racial minorities have faced heightened barriers to good-faith financial advice and secure loans. During the Great Recession of 2008, for example, Black borrowers were issued a disproportionate number of predatory and subprime loans, resulting in roughly 30 percent of Black borrowers facing home foreclosure during the period compared to just 11 percent of white borrowers. Such lineages run much deeper than 2008 and have created a profound lack of trust between communities of color and financial institutions: a barrier which cannot be overcome through automated banking services alone.

But can ATMs play some role in the path to more equitable banking? It is true that automated services may minimize the face-to-face racial profiling that has informed banking in the past. It is also true that they can provide efficient and convenient financial services for communities unable to support a physical banking space due to cost or real estate. But does a lack of human contact necessarily ensure better service? One study found that communities of color value customer service and feelings of welcomeness even above criteria such as cashing checks and withdrawing money efficiently and cost-effectively when choosing a bank. So while ATMs could certainly provide more financial freedom and flexibility in underserved communities, there is still a high community preference for in-person banking services to contend with. The value of simply having access to cash cannot be understated, but for big-picture questions of loans and financial planning services (which at present are still predominantly provided by human tellers), communities of color and low-income Americans may still struggle to find a suitable match. For elderly, disabled, or less technologically-inclined residents, solely having access to an ATM could prove more challenging than face-to-face interactions with a teller.

There is not yet evidence that switching to automated forms of banking yields better financial outcomes. It is possible that technologies like ITMs or virtual banking assistants might overlook the historical context of economic and racial inequality that shapes the finances of so many. Convenience aside, ATMs and other digital banking services cannot ameliorate the structural harms present in financial institutions.

ATMs in Times of Crisis

While ATMs may not solve broader financial crises, they have certainly acted as a lifeline for citizens in the throes of crisis. A key example of the ATM as a stabilizing technology can be seen during the Greek debt crisis of 2015, where ATMs were the only way citizens could access their finances while banks were closed nationwide for a week. Though there were limits on how much cash each person could withdraw (and many machines were stocked with insufficient cash in response to demand), the ATM acted as a lifeline for residents reeling from political and economic turmoil. Mobile ATMs and banking branches have been dispatched by banks and credit unions in the wake of natural disasters too. If these banks and traditional ATMs lose power or become obstructed by debris, a mobile ATM could provide instant and potentially life-saving access to cash for residents who might otherwise need to wait days or weeks.

In these cases, larger traditional financial systems have failed and these small, modular machines have fostered some semblance of stability in their place. ATMs are not a replacement for these larger systems, but they can act as important survival tools during times of political, economic, and environmental disarray. As natural disasters appear with more frequency and severity than they did in the past, this service may be crucial for climate change resilience.

Distribution and Conceptions of Safety

The secureness of an ATM, and relatedly its uptake by a community, can vary greatly depending on local environmental, public safety, and economic conditions. The threat of physical attack, as well as cyber attack, can keep many from taking advantage of the technology. When thinking of the ATM as a potential tool for economic mobility in communities with otherwise spotty access to financial institutions, it is important to take the temperature of local perceptions of the technology's safety.

The strategic placement of ATMs can play a role in how their secureness is understood by the community. The aforementioned initiative placing ATMs across Baltimore postal offices stands as an interesting case study. Post offices represent a sort of neutral, professional locale that might feel better shielded from robbery than an ATM situated on a busy street corner. Yet they are generally only accessible during the work day and may have limited hours on weekends, boxing out a wide swath of the population. In communities where many are working traditional in-person jobs and might be less likely to have lenient time off or breaks, ATMs placed in post offices are not wildly helpful.

Studies have found that queue length can affect one's perception of ATM secureness and convenience. If a line forming behind a user is too long, some express worries about increased vulnerability to PIN theft. Additionally, others express general misgivings about a densely populated ATM locale, particularly when it comes to handling personal finances without distraction or delay. It becomes a question of weighing conveniently and centrally-located ATMs that can be used by the largest possible number of community members against the need for locales that feel safe and secure for withdrawing cash. If ATMs are not distributed well in a community, there is a stronger likelihood that lines could limit the efficiency and perceived security of ATMs as an alternative to traditional banks.

For older or impaired users, new security measures such as biometric authentication or one-time passcode (OTP) verification might also prove a barrier to ATM uptake. Though these novel and emerging security mechanisms might make ATMs more secure on the surface, populations unfamiliar with these methods may view an OTP or fingerprint scanner as a hindrance rather than a pathway to safer transactions. The availability of proper lighting and proximity to well-populated places may also shape consumer perceptions of safety, as ATM robberies are most prevalent between the hours of 12 a.m. and 4 a.m.

Built-in security features are therefore not the be-all and end-all for addressing public anxieties over ATM security. The contextual considerations of placement, particularly of who is most likely to use and understand the technology, are equally as important when choosing siting.

Native Access to Financial Institutions

Native American Financial Institutions (NAFIs) are banks and credit unions specifically serving Native communities in the U.S., providing services that are ideally affordable and informed by cultural context for residents. Native-owned banks make up the smallest percentage of minority depository institutions (MDIs) in the U.S., which are financial institutions with 51 percent or more of voting stock belonging to minority populations as well as a majority of board members from a minority group. From the geographic center of a tribe's reservation to the nearest ATM, the average distance is 6.9 miles in the U.S., and as noted above, 12.2 miles to the closest bank. While ATMs are distributed more liberally on reservations compared to traditional banks and credit unions, these distances are still stark compared to national averages. Beyond community development block grants that might be used to support further financial infrastructure on tribal reservations, grants through the Native American Business Development Institute can be applied to for projects related to stimulating economic activity and stability in Native communities. Still, these resources are often thinly stretched and competitive, making federal and state support for improving financial infrastructure challenging.

Relevance to Advanced Nuclear Energy

We chose this as a case of a dispatchable and modular iteration of a service meant to promote efficiency and greater accessibility to personal resources. The autonomous nature of ATMs also acted as an interesting case study on how technology may help stabilize communities if equitably distributed, but may also shift labor markets and create disparities in resource access if not distributed justly. As an iteration of banking services that uses less land, personnel, and building materials, ATMs have been easier to distribute (though most concentrated in well-trafficked and wealthier areas that might already have access to traditional banking) and have seen widespread uptake. We found that although ATMs have the potential to act as a stabilizing resource for communities with less access to traditional banking services, the actual distribution of ATMs is far from equitable in rural and low-income communities in particular. In the context of advanced nuclear, these lessons tell us that if advanced reactors are actually distributed equally and targeted for communities with the greatest energy needs, they could prove to be stabilizing. But if they are not distributed as such, advanced nuclear energy may reinforce existing energy disparities and disadvantage marginalized communities. The autonomous nature of some advanced reactors may also prove to shift labor dynamics as ATMs have done for banking, potentially minimizing the labor benefits that might be reaped by communities where advanced reactors are sited.

Key References

Bátiz-Lazo, B. (2015, March 26). A brief history of the ATM. The Atlantic.

National CAPACD, National Urban League & NCLR. (2014). Banking in color: New findings on financial access for low- and moderate-income communities.

Townsend, T. (2017, May 4). Eric Schmidt calls himself a "job elimination denier". Vox.

References

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Bátiz-Lazo, B. (2015, March 26). A brief history of the ATM. The Atlantic.

Bátiz-Lazo, B. (2017, June 26). The ATM at 50: How a hole in the wall changed the world. The Conversation.

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Photo: An Automated Teller Machine in Chicago. Jason Cupp / CC BY 2.0, via Flickr.