Starting on Monday, Wells Fargo depositors can withdraw money using a smartphone at any branded ATM, the latest sign of U.S. lenders moving away from traditional brick-and-mortar banking.
Jonathan Velline, Wells Fargo’s head of ATM and store strategy, said that the San Francisco-based bank decided to apply the smartphone technology to all of its 13,000 cash machines after piloting the idea in select locations across the country.
Bank of America and JPMorgan Chase are among the big banks that have announced digital upgrades to their ATM infrastructure, but Wells Fargo is the first U.S. bank to roll out cardless machines across its entire network.
The 20 million customers on Wells Fargo’s mobile banking app will be able to request an eight-digit code to enter along with their personal identification code at an ATM to retrieve cash.
“The new feature allows customers to withdraw cash at any time, even when they don’t have their cards on them,” Velline said.
The new option will also improve protections against data theft, Velline said.
“Security certainly was a big aspect of the cardless feature and the two-step identification helps reduce the risk of fraud,” Velline said, adding that the elimination of cards prevented so-called skimming techniques that criminals employ to read and store data of cards inserted into ATMs.
Wells Fargo, the third-largest U.S. bank, was once the envy of Wall Street, able to seemingly sell its customers a range of different products and highly regarded for its stock price which had once made it the world’s most valuable bank.
But last year’s revelations over a sales scandal that involved the creation of as many as 2.1 million fraudulent accounts in customers’ names without their permission took a toll on the company.
The lender has since seen a sharp drop in the number of consumers opening checking and credit card accounts.
As have many other U.S. lenders over the last years, Wells Fargo has invested in the development of digital tools to attract customers and slash costs at its retail branches.
“Digitalizing services is unquestionably the way to the future and the arguments are very powerful, but U.S. banks are still far behind,” said Gerard du Toit, a partner at consulting firm Bain & Co.
Accessible, well-designed digital offers not only provide a massive cost advantage, but also significantly improve customer loyalty, du Toit said.