For 2012, ATMmarketplace.com has once again surveyed key individuals to update the "ATM Software Trends and Analysis" guide, highlighting trends in major global markets. The purpose of the guide is to build a comprehensive, global view of ATM software and the role it plays in the financial services industry. The goal of this guide is to assist financial institutions in developing their own self-service software strategies.
In preparing the latest edition of "ATM Software Trends and Analysis," the staff at ATMmarketplace.com dusted off a copy of the original version of the guide (covering the years 2007 and 2008) and compared its findings with the most recent survey results. What we found was interesting, to say the least.
One sentence in the introduction to the original guide jumped off the page: "The whole notion of multichannel integration is one that sounds ideal in theory but remains highly unlikely in practice." Today, nearly everyone is talking about multichannel integration.
"In banking, due to the fact that we have various channels, we have created boundaries that say, 'Yes, you can do a withdrawal here, but you have to make a deposit there, and a high dollar withdrawal you have to do over there,'" said Michael Engel, head of software sales banking at Paderborn, Germany-based ATM manufacturer Wincor Nixdorf. "People are starting to ask why that is. A lot of those tasks can be done in a way that is more satisfying to the customer and more streamlined if we are able to connect those channels on the back end."
For example, the online channel is becoming one of the most popular ways for consumers to conduct banking transactions. In the past year or so, banking via smartphone has become widely used and very popular. Today, the ATM is increasingly viewed as one component of a seamless approach to serving the customer.
"In a multichannel approach, the ATM is the major point of contact for customers with their bank," said Mattia Ghidoni, head of customer care at Verona, Italy-based Unicredit.
"Making it easy to interact with the bank in different ways lets the customer deal with the bank in the way he or she wants," Ghidoni said. "Reducing complexity and offering the services people need will attract new customers and new revenues."
Still, the degree to which FIs adopt multichannel integration depends in large part on how, exactly, they define the term.
"If you're talking about having the same transactions on multiple channels, then everyone would agree with that," said Aravinda Korala, CEO at Edinburgh, Scotland-based ATM software provider KAL.
"But if you're talking about having the client software on the ATM also run on your home PC, your iPad and your iPhone, then no, that's not going to happen," he said. "It is clear that the ATM software is not going to run on a mobile phone, but it is also clear that those two clients need to talk to some back-end Web service. That seems to be the direction in which things are going. SOA (service-oriented architecture) is the bedrock of multichannel integration."
Multivendor ATM software is becoming ubiquitous
Ten years ago, the idea of running a single software application across a variety of ATMs was considered revolutionary. In the 2007-2008 "ATM Software Trends and Analysis" guide, the concept was viewed as picking up steam. Today, multivendor software is the norm.
"I don't need to make the case for multivendor software like I did five years ago," said Steve Hensley, KAL's executive vice president for global sales. "Many of the banks I talk to have merged with other banks and they have a mixed fleet, so they recognize the need."
Although there are some smaller banks that operate a few dozen or so ATMs that aren't running multivendor software, nearly every large bank around the world is doing so.
"If you are a large bank with 10,000 ATMs, you aren't likely to have a single hardware vendor," Korala said. "Even if you had a single vendor, you would have bought machines over a long period of time so you still want software that is flexible and allows you to run a single application over a variety of ATMs."
Controlling costs is still key
If there was one concept that has held steady in the five years since the first "Software Trends and Analysis" guide was published, it is managing costs.
In 2007, Michel Denis, director of engineering for KAL, was quoted as saying, "Right now, cost reduction, with the subprime-related issues facing many banks, is the focus of every bank, and they are all looking to cut costs." In the 2012 survey, in response to the question of what is the most critical change organizations need to make to their ATM network, reducing operational costs was at the top of the list.
"In my opinion, reducing cost and managing availability are the most important issues facing banks today," said Zhong Cheng with Shenzhen, China-based Zijin Technology, a KAL partner and an application software development firm. "As ATM networks have spread nationwide and the competition has become more intense, effective managing measures and utilities are needed to keep the ATM networks in good state to keep them more competitive and profitable."
And in a typical Catch-22, cost concerns are one of the biggest factors preventing FIs from investing in making their ATM networks more profitable.
"There are many potential advantages to upgrading our equipment; however, the cost is a deterrent," said Jill Weber, ATM network manager with Flint, Mich.-based Citizens Bank.
Personalizing the experience
Peter Kulik, new technologies channel manager for Fifth Third Processing Solutions (now called Vantiv), predicted in the 2007- 2008 guide that the concept of personalization would take off in the next few years.
"Personalization is being deployed more widely, and that ties in with software," Kulik said.
Few predictions were more on the mark than Kulik's. As banks gather more and more information about their customers, they have the opportunity to make the ATM transaction more than just a computerized experience common to everyone.
"If you log onto Facebook, for example, you only see those messages that pertain to you," Engel said. "It should be the same way if I use my card at an ATM. For example, here in Germany I always withdraw 200 euros. Why should I have to go through those options over and over again? My bank should recognize me by now and present me with one button that says 'Do your favorite transaction again?'"
Not only does the ability to tailor the ATM transaction to individual customers make for a more personal experience, it offers the bank the ability to deliver targeted messages to that customer.
"One-to-one marketing is a golden opportunity not only for generating new business but also for creating a customer 'feel good' experience through a personalized message," said Rohan Muttiah, chief information officer at the Commercial Bank of Ceylon.
Jonathan Gray, ATM product manager at Huntington National Bank in Columbus, Ohio, agreed with Muttiah's assessment.
"If I know who you are and I've got your interest for 20 seconds or so, it's in our best interest to present you with a relevant service," Gray said. "It may be difficult to attribute the sale to that particular channel, but I do see a benefit."