Financial institutions (FIs) invest time and big bucks into their ATM channels. From technology to placement, FIs are putting ATM networks at the forefront, treating them as crucial consumer touchpoints.
Some opt to outsource portions or all of their networks, while others decide to bring their network operations in-house. "There's been a pendulum swing," Foley said. "The perspective used to be to run everything in-house. Then it went to outsourcing everything. Now … (FIs) look at pure ROI, and there are several different dynamics that make them choose whether to drive their ATMs or outsource them."
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Trends in the financial self-service space cycle - pushing some FIs to outsource and others to bring ATM operation back in-house, said Bob Colabrese, executive vice president of Ponte Vedra, Fla.-based Nationwide Money Services Inc. "You go through cycles at the same time, depending on what you are going through in your market."
"If you have three ATMs or 30 ATMs," Colabrese added, "it takes about the same amount of time to manage. Why would you spend all of your time doing that if you don't have to? The folks that are (branding and/or) outsourcing want to get rid of that work. If it takes the workload away and saves them time and money, that's what they're interested in."
Break-even or better
Time is money, which makes even a break-even ATM-management scenario profitable, said Katrina Meade, senior vice president of operations for Winchester, Va.-based The Marathon Bank. "From our perspective, we don't really look at ATMs as a moneymaker," Meade said. "We look at them as a marketing tool. The more we can get our name out in the community, the better off we are."
The Marathon Bank, with $400 million in assets, has a network of 19 ATMs, 11 of which are owned by a third party and branded with Marathon's logo.
Charlotte, N.C.-based First Charter Bank, an institution with $4.2 billion in assets and a network of 111 ATMs, falls somewhere in the middle of the in-house operation and branding/outsourcing scenario.
Eight years ago the bank almost doubled its fleet through a branding deal with Nationwide. Jim Mathews, First Charter's senior vice president, said the deal has saved the bank money.
In the past year, "Nationwide has assumed more of the costs and is providing First Charter-branded ATMs in key retail locations for less of an expense than we can provide them ourselves," he said.
First Charter has 43 branded ATMs.
"The percentage savings for us is not huge, but there's no capital investment on our part, and it saves us hassle and time," Mathews added. First Charter also is expected before the end of the year to pull a portion of the 15 off-premise locations it still owns and operates and replace them with branded ATMs owned by Nationwide.
