Fleet and Bank of America. Chase and Bank One. Merger mania is a fact of life in the banking industry.
And while the phenomenon entails work and expense for the banker, it's certainly a happy thing for the enclosure/signage business.
New combinations of former competitors mean ample business opportunities for the companies that provide ATM surrounds and enclosures, toppers, drive-up structures and other accessories to financial institutions.
"In a business's feast-and-famine cycles, that would one of your feasts," said Al Tiley, president and CEO of Companion Systems Design & Manufacturing Inc., Salt Lake City. "We end up changing out a lot of our own products."
Last year, Tiley said, Wachovia changed out just short of 3,000 ATMs when it merged with First Union. Bank of America has 15,000 ATMs, and Fleet has 4,000, so their merger will entail a substantial ATM re-branding project.
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The 2000 Cap Gemini Ernst & Young report shows a positive link between effective branding use and customer loyalty. The more customers can identify with the name of a credit union, community bank or other FI by brand, the more extensively they will use the services.
"Branding on an ATM machine needs to be clear-cut, consistent, and durable and has to look good for customers to want to use it," Tiley said. "There's a direct connection between that brand identify and the level of comfort and loyalty a customer has with that financial institution."
New ATM technology from NCR, Diebold and other companies also provides a vibrant source of new business for the surrounds/enclosures industry.
"With the new technology typically comes the new ATM surround product for it to complement not only the look and features on that machine, but also the bank's brands," Tiley said. "An ATM machine is cold until you put a brand identity on it."
Tiley said he foresees the industry continuing its consolidation over the next three to five years. "That will narrow down our industry's client base," he said.
"Our single biggest challenge will be courting much larger accounts and fewer of them," he said. "A lot of that middle tier of financial institutions is starting to get eaten away."
Tiley said financial institutions have a strong tradition to uphold in re-branding their ATMs in a customer-friendly way.
"They are, after all, the godfather of all interactive devices," he said.
