Abstract: A Business and Technological History of the ATM in the United Kingdom, 1965–2005
Through archival research we investigate the impact of the introduction of Automated Teller Machines (ATM) in British retail banking. Contrary to the experience in the United States, in the United Kingdom the ATM has been largely neglected by historians and management scholars. Technologically, cash dispensers preceeded ATMs and were originally a British innovation but U.S. (e.g. IBM and NCR) and German manufacturers (e.g. Siemens) took the lead as ATMs became a global technology. The evolution of the ATM illustrates how banks adopted on-line, real-time computing for the entire branch network and highlights the role of network externalities in financial markets. From a business history perspective, the ATM epitomizes a shift in bank strategy—namely, how applications of computer technology moved from being potential sources of competitive advantage to being a minimum requirement for effective competition in retail finance. The study argues that during the 1990s, IT in banking (as measured by ATMs) led to reduced operating costs, coupled with increases in output (number of transactions) that resulted in greater efficiency. This research concludes that the introduction of ATMs have payoffs for banks as well as customers.