ATM outsourcing is a cost-effective and time-productive solution for many financial institutions. In fact, every day, more and more banks and credit unions of all sizes choose to outsource their ATM networks.
Branding ATMs at off-premise sites benefit FIs, and their customers and members appreciate the convenience of fee-free transactions at locations beyond the brick-and-mortar branches.
Branding experiences
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As a result, Old Hickory and Food Lion indirectly branded each other.
More recently, Pittsburgh-based PNC Bank signed an outsourcing deal with Houston-based Cardtronics for the placement of approximately 170 ATMs in Walgreen stores. The February 2005 agreement gave PNC exclusive rights to ATM placements in Walgreen within PNC's five-state region: Ohio, Kentucky, Indiana, New Jersey and Pennsylvania.
That deal with Cardtronics was the first PNC entered to have its brand appear on ATMs it doesn't own and operate. In fact, within PNC's network of 3,600 ATMs, two-thirds are off-premise machines that the bank owns and operates.
The outsourcing decision
Shelly Chandler, PNC vice president of ATM banking, said it was hard to give up something they were used to controlling, but it helped that Cardtronics worked with the bank to ensure that the experience of customers at Walgreen ATMs would be the same as that of customers using ATMs in PNC branches.
"We offer seven languages at the ATM for our customers," Chandler explained, "and Cardtronics incorporated that for us. They also are running PNC advertisements on the machines, so the ATMs shouldn't look any different from an ATM we use at any PNC branch."
Chandler said the agreement with Cardtronics was attractive because it gave PNC a chance to place its ATMs with a "premier retailer."
"We could basically say that you could go to Walgreen's - a recognized, quality brand - and find one of our ATMs," she said.
Keith Myers, executive vice president of Cardtronics' financial division, said FIs are looking for good real estate, and national retail locations fulfill that need. "From a customer perspective, they're looking for convenience, and (FIs) want to leverage the real estate locations that we have," he said. "Doing that provides (FIs) with convenient touchpoints for their customers."
For a national bank like PNC, Myers added, outsourcing offers a community advantage, helping the bank reach customers in areas where branches might not be readily accessible. Branded ATMs benefit all participants, according to Myers.
