ATMs aren't what they used to be. When the first ATM hit the streets in the '60s, it was a cash dispenser. Today, about 500,000 ATMs in the United States continue to function on that basic level, but the technology is shifting quickly.
For years U.S. banks and credit unions have explored ways to turn their ATMs into revenue-generating operations. FTSI, which provides ATM service for a number of U.S. financial institutions, has seen the trend bending in that direction for some time.
And not only are ATMs coming out with new functions, like envelope-free, intelligent deposits, ATM fleets are often mixed with hardware from multiple vendors — only complicating the complexity of the networks and their overall servicing needs.
I've identified five industry and technology changes I see directly impacting ATM service providers and value-added resellers in the U.S. market: Check 21, consolidation, the migration to Windows, the advent of multifunctional kiosks and other automated solutions, and the evolved FI perspective.
Check 21
The check-imaging realm is anything but stagnant. While FIs are still embracing the use of legacy ATMs, because of economic uncertainty, they all will eventually have to adopt intelligent-deposit processing. And that's going to require big investments, at least upfront.
VARs and/or ATM servicers, in order to meet the changing needs of their FI clients, must become authorized service providers. For instance, they may need to become certified as an NCR Authorized Sales & Service Provider. Technicians will need advanced knowledge of Windows-based software. At NCR, techs with that knowledge who pass the certification requirements receive accreditation for first- and second-line maintenance. Those techs also are armed with USB key that allow only trained field techs to perform certain diagnostics on ATMs, teller cash recyclers, kiosks and other self-serve products — underscoring the increasing need for specifically skilled ATM and financial-equipment techs.
Story continues below...
Engage Customers with Strategic ATM Marketing
So, you’ve taken the plunge and launched one or more targeted offers at the ATM. But, are you getting those 20% take-up rates you were hoping for? Phoenix customers are. Find out five ways to drive more revenue with ATM marketing.
Check 21 is one of the most noteworthy changes and it will continue to provide innovative technologies for years to come, such as mobile deposits and biometrics. So, astute FIs will employ VARs that have already been trained and have an extensive knowledge of these new architectures and functions. This partnership will result in long-term cost savings and increased revenues.
Industry consolidation
Since its peak in 1969, when the country had some 24,000 credit unions, today only about 8,200 credit unions remain. More than 4,000 bank charters have vaporized since 1987. If an FI is not retaining and adding customers or members, it won't likely be around in the future; making the quality and flexibility of the service providers they work with even more paramount amid challenging financial times. VARs must become turnkey-solution providers that manage and add ATM services for the FIs they work with. VARs should determine the optimal blend of branch technology and operations that can be seamlessly implemented to achieve set objectives at the branch. A forward-thinking VAR, as an example, could set up a customized call center service in one of its FI's time zones, so that the FI receives "personalized" service from the VAR.
As the number of potential FI clients continues to decline, VARs have to refine their service methods to prove merit to clients. Whether it's reducing response time from four to two hours or blending first- and second-line tasks into a single check-up, banks and credit unions are seeking service providers that understand the complexity of the industry.
Migration to Windows
Propelled by the migration to Windows, self-service continues to evolve with ever- increasing options. One of the newest software packages is KAL's vendor-neutral Kalignite software, which actually resides on top of the operating system, allowing the FI to load additional apps to existing software packages.
Additionally, there is a burgeoning movement to use ATMs that perform transactions beyond those that are traditionally handled via a card, such as mobile-phone top-ups or money remittances. Every VAR must acknowledge and understand new software applications and evolving payment standards.
Advent of multifunctional kiosks, other automated solutions
Insightful VARs are continuously adding new products to their portfolios. NCR's recent purchase of NetKey's self-service kiosks supports that need — you never know when an ATM portfolio could be augmented with some new type of device. Whether it's virtual tellers interacting with consumers through video monitors at interactive kiosks, mobile banking via cell phones or imaging deposits at ATMs, consumers, especially those 35 years and younger, want new technologies.
Smart FIs are emphasizing digital convenience and recurring revenue models, and there's an ongoing explosion in kiosks and other self-serve solutions that FIs must embrace to change their ATMs into multichannel revenue generators.
The FI perspective
Turning ATMs into revenue generators is providing impetus for FIs to outsource through the tech-savvy ATM service providers that offer turnkey resolutions. FIs want convenience and speed, so VARs should be equipped with a menu of readily accessible multivendor solutions that appeal to a wide variety of FI clients. Staying ahead of the technology curve is how VARs will maintain relevance in the future.
Susan Napier is the founder and CEO of FTSI, the largest independent ATM-services provider in California for credit unions and community banks. To submit a comment, e-mail the editor, Tracy Kitten.
