One of the most perplexing questions for the ATM industry just now is this: "What does the marketplace want? Now? Next year?"
Ask Uwe Krause, vice president of banking at Wincor Nixdorf, and you'll hear this reply: "Different, totally different [things]. They have to do with the infrastructure and the culture inside the country. You cannot view it in a global, worldwide way. You need platform model concepts and then you have to adapt these to special cultures and regional requirements."
This accounts for a Wincor ATM product range that spans from basic cash dispensing machines popular in emerging markets to sophisticated cash-recycling ATMs prevalent in Japan and increasingly seen in Europe, where cash-handling costs are high.
And speaking of cash handling, people don't even count money the same way from one country to the next, Krause said. A banker from Asia, where teller operations are mostly automated, would be dumbfounded to see American tellers counting and rolling coins, he said.
The U.S. lags behind Europe, as well. While big U.S. banks are just getting into teller automation, "In Europe now they are going to the next phase of teller automation and reorganization of service processes," he said.
"There is only one thing in the most developed countries that's the same. They still stick to the branch as one of the most important sales channels and service channels."
And the channel itself bears global similarities — namely a focus on branch transformation, said Alvin Ng, Wincor Nixdorf vice president of banking for Asian markets.
"Within this channel, I think two big market transitions are happening: one is that it is becoming very customer-driven; the other is that footprint is reducing to a level where from a cost perspective, it becomes more viable," Ng said. "These are the two things that we are seeing as a company and, right now, if you look at a lot of new innovation and products that we have, we are in fact trying to capture that segment."
Operational services for ATM networks — the blueprint for the future
An evolving role ATM manufacturers and IADs are playing in branch transformation is that of operational services provider. The project Wincor carried out for Austrian bank BAWAG P.S.K. is a case in point.
BAWAG determined that for its 520-branch self-service reinvention, it made sense to work with a single partner who could deliver an end-to-end solution. Not only did this reduce the complexity of the installations, but it also eliminated the need to manage numerous suppliers once the system was up and running.
"That was probably the most important experience in terms of how do we climb up the value chain with our banking customers," said Jens Bohlen, senior vice president of services at Wincor Nixdorf. "It's not the biggest project that we have, but in terms of the value depths it is a breakthrough. This is my blueprint for the future."
Bohlen's aim is for Wincor to be "the best company in providing operational services." To him, this means not only providing deployment and availability service contracts for Wincor systems, but also providing the management layer above that, using the company's ProClassic/Enterprise retail banking suite.
"It's basically a multi-channel architecture that allows you, in simple terms, to drive the ATMs, to collect all the transaction files from the ATMs, consolidate them and send them to a core banking system," Bohlen said. The platform allows Wincor to perform an immediate action on any ATM without needing to look at what the host is doing, thus ensuring data security and privacy. And saving the customer about 25 to 30 percent on system operations.
A platform such as PC/E allows the customer to avoid having a "fat" software client residing on the ATM, said Stefan Wahle, Wincor Nixdorf vice president of banking with responsibility for the company's worldwide software business.
Software platforms for ATM networks — the foot in the door
"The idea is to have a very small piece of software on the ATM and the majority of all the intelligence is on the server side," Wahle said. "If you would have this SmartClient on 40 different vendors and models, you could deploy new technology at the press of a button. Time to market is key, and from my point of view this is a major challenge facing retail banks today."
Also, from Wahle's point of view, software presents possibly the best starting point for a client relationship. To explain why, he gives the example of the Commonwealth Bank of Australia: "There was basically no relationship between the bank and Wincor," Wahle said. "Our discussion started and was centered purely around skimming, software security, EMV introduction."
The working relationship grew from there and the conversation eventually turned to the bank's hardware needs. In the end, Wincor won CBA's hardware RFP. "Now the relationship has been developed into a trusted advisor partnership. So it all started very small with security."
Such a scenario could be repeated with increasing frequency as new and more sophisticated (and from a security standpoint, more problematic) technologies, such as cloud computing and mobile banking, evolve and grow.
In particular, the introduction of banking functionalities onto devices with operating systems not designed for bank-level security presents some concerns, Wahle said.
"My question is what happens on Android, which is an open platform, so everybody has access to it," Wahle said. "Security is something we need to take seriously and build as [criminals] will definitely attack the mobile channel as well."
That's another perplexing question for another time.
For more on this topic, visit the manufacturers research center.