by Anthony Nocelli and Ralph Spinelli, HTx Services
If you're a frequent visitor to ATM Marketplace, you've probably read a ton of articles on branch transformation. To accommodate today's digital world and the way millennials like to do business, financial institutions are embracing more self-service and less personal teller interaction, but still offering convenience and value-added services.
"Pop up" or compact branches are being piloted around the world offering customers tablets, next generation ATM terminals, and new banking technologies to enhance the customer experience.
TD Bank, PNC Bank, Wells Fargo, Umpqua Bank and National Australia Bank have all launched these types of test branches over the past year.
But while financial institutions are adapting their physical and digital branch touch points to better suit current customer demands, they still have to manage operational efficiency and the IT infrastructure to accommodate these objectives.
The industry seems to be clear on why branch transformation is needed, but no one seems to be addressing the strain it can place on a bank's existing IT infrastructure. How will it handle the significant increase in demand from self-service and assisted self-service technologies?
When you think about it, all of the activities involved in branch transformation revolve around more — and more sophisticated — technology, whether it's iPads, custom software, digital TV, touch screen computers, enhanced Wi-Fi, or some other high-tech solution.
A bank's legacy system simply is not equipped to handle this demand, especially as financial institutions find themselves pushed to trim IT budgets and staff in branches.
Why outsourcing could be the answer
IT staff at many financial institutions do not have the highly technical skill set required by many of the the self-service and digital banking trends.
But by outsourcing IT to a trusted partner, an FI can significantly increase its technology offerings quickly, without having to invest in training, purchase and installation costs and ongoing maintenance.
Here's an idea of what ATM and IT service providers can offer, and what banks should look for in a partner:
1) Technology as a service — IT service providers can develop an end-to-end service offering to fit a bank's specific needs. Leveraging TaaS can address a range of issues related to cost reduction, increased efficiency and capital expense reduction.
2) Wall-to-wall IT support — Many financial institutions outsource ATMs to one provider and IT to another, creating a burden for staff who must manage multiple vendors. A better approach is to seek a partner who offers wall-to-wall support for banks, managing everything from ATMs to desktops.
3) Day-to-day management— Bottom line, if a bank is counting on its technology to do business, the technology needs to be up and running and fully operational at all times. For FIs with limited IT staff, outsourcing is the solution to provide round the clock remote systems monitoring and field service to solve any problem quickly and efficiently.
4) Agnostic support— Banks often worry that outsourcing will force them to rip and replace existing hardware and software in order to use whatever the service provider requires. But this is not necessary so.
There are outsourcing partners who are hardware and software agnostic. They can save your organization time and money and, even better, increase your existing ROI.
5) Enterprise project deployment — One critical aspect of true branch transformation is to offer customers the same experience, whether it's online or mobile, at the ATM, or inside the branch. However, for a larger financial institution, it can be difficult to implement new technology in such a way that it can be launched simultaneously.
By outsourcing the project to an experienced national provider, your bank can leverage that organization's national logistics capability and highly trained field service team. The result can be a successful IT hardware and software implementation with minimal cost — and without operational disruptions.
Of course, before you place any of these responsibilities in a vendor's hands, you should thoroughly check the organization's credentials and references. Many service providers market themselves as providing complete ATM and banking IT solutions, but few truly live up to the claim.
By outsourcing IT, banks can focus on transformation internally and use staff more efficiently. By freeing employees to teach customers about new tools and technologies available to them, your FI can ultimately sell more products, bringing value that goes well beyond simple transactions.
Anthony Nocelli is national sales director at HTx Services. He has more than 20 years of experience in outsourcing services and technology solution sales for the banking industry.
Ralph Spinelli is the vice president of ATM engineering services at HTx Services. Previously, he was head of engineering and ATM support at Citi, where he worked for 30 years.