The fact that ATM fee hikes still cause controversy shows consumers still demand ATMs, even in an era when payments and other transactions seems to be moving to a mobile platform.

It is the self-service component of mobile and other digital payment and financial transaction technology that is actually contributing to ATMs' health.

A recent study commission by the Federal Reserve Bank of San Francisco disputes the idea that ATMs are in decline, and says ATMs continue to be a force in the financial services marketplace, driven partly by the lingering popularity of cash payments. The report found 40% of 18–24 year-olds prefer cash to other payment methods. In other research, the American Bankers Association found that preference for the ATM channel has increased from 11% to 14% in the past year.

Taking a deeper look at ATM usage, CO-OP Financial Services commissioned a proprietary study by Raddon Financial Group that shows a direct connection between use of ATMs and credit union members’ financial activity. The report even has good ATM news for the credit union industry’s effort to attract Millennial-aged consumers by offering no-surcharges.

It points out that 20% of study respondents were Gen Yers and 26% of those younger members use ATMs up to three times per month – considered frequent use. The convenience, familiarity and reliability of ATMs also play a key role in establishing the trust and engagement needed to establish long-terms relationships with members.

“Engagement represents the degree of emotional connection that individuals have with your institution,” the report states in explaining the intrinsic service value of ATMs. “Higher levels of engagement, or emotional bonds, correlate with higher loyalty, share of wallet and financial performance. Establishing these emotional bonds with your (member) base is critical to maintaining retention and service quality levels.”

Consumer attitudes about self-service are changing rapidly as customers seek more empowerment over their lives. People are not only willing to take charge of their payments and financial accounts—in many cases they would much rather do it themselves.

With the surging advancements that self-service systems are making in today’s financial industry, the traditional role of ATMs is becoming even more important as technology progresses and financial institutions see the advantages and ubiquity of these commonly used self-service terminals.

Indicative of these advancements are ATM innovations such as new ATMs that allow credit union members to select a shared branding option to access all accounts with their primary credit union—not just those credit unions linked to their ATM card. Other technology advances allow credit unions to remotely manage marketing and simplify operations by remotely uploading electronic journal entries.

With an array of these and other advanced ATM payment and account technologies, credit unions can enhance their members’ experience while meeting the self-service demands required of financial service providers today.

Terry Pierce is Senior Product Manager for CO-OP Financial Services