ATMs are only useful when they consistently have cash in them. The primary purpose of these machines to consumers is to get money conveniently, saving the need to wait for a teller the next day or be without cash over the weekend. However, that becomes a problem when customers find it impossible to withdraw due to a lack of stocked money. There can be a number of reasons for that, from a general mistake to weather conditions making it impossible to access the machines. However, the worst situation can be a bank run, as it indicates a loss of confidence. Whatever the cause, financial institutions should take the necessary steps to keep these cash dispensers stocked, or else they will face a situation similar to what happened in Greece in 2015.
One of the big news stories in the middle of 2015 was the financial crisis in Greece. Following the election of the leftist coalition SYRIZA to the Hellenic Parliament, the government attempted to renegotiate its debt agreements with the so-called troika of the European Union, the International Monetary Fund and the European Central Bank. The failure of these talks, mixed with a missed debt payment, caused a reaction from the Greek public in the form of a bank run at the country's leading financial institutions.
In earlier times, bank runs often took the shape of long lines of depositors at a branch. As ATM Marketplace noted, today's world makes this event of mass withdrawal occur at ATMs everywhere. Once warning signs came through, consumers went straight to the cash dispensers to take out their savings in euros. This process became even more frantic when rumors began of leaving the eurozone and restoring Greece's previous currency, the drachma. Many of these machines became empty.
To address this concern, the Greek government imposed controls on various functions of finance. According to the Huffington Post, banks were closed for an extended period of time, and citizens were faced with 60 euro limits on their withdrawals. While this caused some alleviation, many dispensers still ran out. Only when a referendum passed in early July did these problems alleviate over the following weeks.
The lesson that financial institutions should learn here is the nature of consumer banking is quite different from only a couple of decades ago. ATMs are now a primary source of cash for many. If it seems evident that a run will occur without their control, banks should consider stocking their dispensers as effectively as they can.
December 31, 2015