Talk to any banking leader right now, and you'll likely hear the same thing:
“The ground is shifting under our feet. Staffing is harder. Customer expectations are changing. Margins are tighter. And the traditional model (big branch, big staff, big hours) is no longer sustainable at scale.”
At the same time, no one wants to sacrifice service. Most institutions I talk to aren't trying to replace their people. They're trying to help their people do more with less, without losing the relationship side of banking.That’s why Interactive Teller Machines (ITMs) keep showing up in these conversations. And rightfully so. They can help solve for staffing challenges, expand service hours, improve access, and reduce operating costs. But here's the catch: ITMs are not one-size-fits-all.
In many cases, we see institutions make bold moves, either quickly adopting ITMs to solve an urgent challenge or holding back as they weigh competing priorities. Both approaches are often rooted in thoughtful strategy. But what’s often missing is a framework that helps teams pressure-test those decisions against operational realities, long-term ROI, and customer readiness.
This article is built to help you do just that.
We’re going to cover:
When and where ITMs make the most financial and operational sense
The difference between transaction cost and total strategic value
Real-world examples of how banks and credit unions are using ITMs today
The questions you should be asking before moving forward
Let’s dive in.
Most institutions don't start exploring ITMs because they're chasing innovation. They do it because the current model just isn’t working like it used to.
Staffing shortages. Branches with declining transactions. Full-time salaries supporting part-time demand. Institutions are spending more than ever just to keep the lights on—and it's becoming harder to justify.
That's where ITMs enter the picture.
Let's start with raw transaction costs:
A traditional teller-assisted transaction costs $4–$8 on average.
ITM transactions typically run between $0.75-$1.50.
ATM transactions are cheaper still, but they don’t support complex interactions.
ITMs allow you to offload the high-cost, low-complexity work (deposits, withdrawals, transfers, check cashing) to a self-service or remote-assisted channel. That opens the door to restructuring your labor model without cutting service.
But here's the key: ITMs are not about eliminating people. They're about elevating people. Freeing them up for advisory conversations, outbound calls, lending support, the human work that actually deepens relationships and grows revenue.
If you're stuck in a cycle of "how do we do more with less," ITMs can help you reset that question:
How do we do better with what we already have?
You don’t need a spreadsheet to know that branch real estate is expensive. But what's often overlooked is how much flexibility ITMs give you when it comes to branch strategy.
In the last two years alone, we've seen institutions use ITMs to:
Consolidate underperforming branches while maintaining access in-market
Convert large legacy locations into smaller, more efficient formats
Expand into new geographies without committing to a full-service buildout
A well-placed ITM can shrink your branch footprint without shrinking your presence. It lets you serve more people with less square footage, less staff, and less overhead.
And that shift doesn't just reduce costs. It creates options. When your fixed expenses are lower, your strategy opens up. Suddenly, you can experiment with different formats, test new markets, and iterate faster.
Bottom line, if you're staring at a branch P&L and trying to figure out what's still worth keeping, ITMs give you a way to answer that question with confidence (and flexibility).
If you're still relying heavily on overdraft fees, monthly maintenance charges, or penalty-driven revenue, you already know the clock is ticking. Regulatory pressure and consumer backlash are only going one direction.
That means your margins will need to come from somewhere else, and efficiency is one of the few levers still in your control.
By lowering the cost of routine transactions, ITMs allow you to:
Rebalance your revenue model away from penalties and toward service
Offer value-added services (like small business transactions or advisory help) without increasing branch staffing
Absorb volume increases without expanding headcount.
This isn't just about cost savings, it's about margin preservation.
As legacy fee revenue declines, institutions that haven't invested in smarter delivery channels will find themselves squeezed. Those that have? They'll be better positioned to serve, and to win.
Here's something we say a lot at QDS:
Most institutions don't have a people problem. They have a people allocation problem.
Your frontline employees are capable, experienced, and customer-focused. But too often, they’re spending their time doing repetitive, manual work (verifying cash, making change, completing basic deposits) that technology could be doing faster and more accurately.
And the cost isn't just financial. It’s strategic.
When you tie up your best people in low-value tasks, you limit their ability to do the work that actually grows the business: cross-selling, deepening relationships, following up on loan leads, connecting with business clients.
ITMs help you reallocate capacity. In a branch that used to require four tellers, you might now only need two, with the others shifted into universal banker or revenue-generating roles. You haven't lost talent. You've unlocked it.
If staffing is a constraint (and for most institutions it is) this is one of the smartest ways to relieve the pressure.
One of the hardest parts of modern branch strategy is that customer behavior has evolved faster than most branch models. People don’t just want access from 9 to 5. They want it on the weekend. After dinner. Before their kids wake up. They want service on their schedule, not yours.
But expanding hours isn't always realistic. And layering in more staff for longer days comes with costs most institutions can't sustain.
ITMs offer a middle path.
They give customers the flexibility they expect (extended hours, full cash functionality, and even live teller support) without requiring you to staff every location from open to close. In high-volume branches, they reduce wait times and transaction traffic. In smaller markets, they offer meaningful access without the cost of full-service buildouts.
Importantly, ITMs also let your customers choose. Self-service when it makes sense. Live support when they want it. It’s not about forcing them into a machine. It's about giving them more ways to bank, and more control over how they do it.
We've all seen institutions roll out new technology that looks good in a press release but falls flat in practice. That's not innovation. That's marketing.
True innovation shows up in customer experience. Meaning when interactions are faster, service is more flexible, and your team can solve more problems because they're not buried in routine tasks. That's where ITMs can quietly transform your brand.
They let you offer more convenience, without less service. They allow your customers to get help from a human when they need it, and breeze through a deposit when they don't. And when customers realize that your institution gives them time back, choices, and ease of use? That becomes a trust-building moment.
ITMs don't shout innovation. They signal it. And when they're implemented with care (clear signage, strong staff training, and customer education) your customers notice. Not because you told them something changed. But because they felt it.
Drive-thrus used to be a differentiator. Today, they're often a liability. We've worked with institutions whose drive-thru tech hasn't been touched in 20 years. For instance, pneumatic tubes that break down weekly, slow transactions, frustrated customers, and rising maintenance costs.
That wouldn't be a problem if customers stopped using them. But they haven't. Drive-thru volume is still significant, especially for basic transactions. That means the experience still matters. And right now, for many institutions, it’s out of sync with everything else they've modernized.
ITMs provide a strategic upgrade to the drive-thru without requiring a full branch overhaul. Customers can complete deposits, withdrawals, payments, and more, faster, more securely, and with better support. If needed, they can speak with a live remote teller. And institutions can scale that support across multiple branches, reducing the staffing burden on any one location.
This isn't just about new equipment. It's about bringing one of your most visible, heavily used channels up to the level your customers expect, without breaking your budget to do it.
Growth often gets defined by real estate, such as more markets, more presence, more buildings. But for a growing number of institutions, that model is breaking down. Branch buildouts are expensive. Staffing is unpredictable. And market potential doesn't always justify the overhead.
But the need for access hasn't gone away. You still want to be present in key areas, especially those that matter most to your mission, your brand, or your underserved communities.
ITMs give you the ability to extend that presence, both strategically and affordably.
We've worked with clients who deployed ITMs in former branch locations to maintain continuity. Others have placed them in grocery stores, retail centers, or campus hubs to reach customers where they already are. Some have used them to return to markets they once had to leave.
The impact? Continued brand visibility. Functional access to banking. And the ability to scale without overcommitting to long-term infrastructure. If your growth goals are bigger than your current footprint, ITMs can help you bridge that gap on your terms.
If you’re only looking at ITMs through the lens of cost reduction, you’re missing their larger value. Yes, they lower transaction costs. Yes, they support smaller footprints and fewer FTEs. But what they really offer is flexibility.
A well-deployed ITM network gives your institution options:
To consolidate when a branch becomes unsustainable, but stay present in the community.
To redeploy talent where it can drive revenue, not just transactions.
To reach new markets with less risk, less capital, and faster time-to-value.
Think of ITMs not as equipment, but as infrastructure. They're the connective tissue that lets your institution adapt, scale, and evolve without having to rewrite your entire delivery model. And that's what matters most in today's environment. Not how fast you can cut costs, but how well you can position your institution to grow when the opportunity arises.
If all you're looking for is a way to reduce costs, there are cheaper paths than ITMs. But if you're building something bigger (something leaner, more responsive, and more scalable) this is a tool worth paying attention to.
Because ITMs don't just change how transactions happen. They change how service happens. How your people spend their time. How your customers experience your brand. And how your institution grows, without adding unnecessary weight.
They give you leverage (strategic leverage) to make smarter decisions about your branches, your staffing, and your future. And in a time when so many institutions are being asked to do more with less, that kind of leverage isn't just helpful. It's essential.
So the real question isn't "Are ITMs worth it?" The question is: "Are we building a delivery model that’s strong enough to carry where we're going next?"
If you're ready to explore that, and not just the machines, but the strategy behind them, we're ready to help you get it right.