Automated Teller Machine (Atm) Network Evolution in American Retail Banking: What Drives it?

Abstract

The organization of automated teller machine (ATM) and electronicbanking services in the United States has undergone significantstructural changes in the past two or three years that raisequestions about the long term prospects for the retail bankingindustry, the nature of network competition, ATM service pricing,and what role ATMs will play in the development of an interstatebanking system. In this paper we investigate ways that banks useATM services and membership in ATM networks as strategic marketingtools. We also examine how the changes in the size, number, andownership of ATM networks (from banks or groups of banks toindependent operators) have impacted the structure of ATMdeployment in the retail banking industry. Finally, we considerhow movement toward market saturation is changing how the publicvalues electronic banking services, and what this means forbankers.