Article

ATM cash management: Building a better duck

ATM owners are beginning to flock to high-tech methods of cash management. by Ryan DuBosar, contributing writer

March 11, 2002

ATMs resemble airplanes in one respect -- when they work, all the support needed to keep them working is invisible. When the flight is bumpy, customers notice it right away.

Mel Walter compares ATMs to ducks, actually. A 20-year veteran of the industry who is currently executive vice president of the Gasper Corporation of Beaver Creek, Ohio, he's in a position to make the comparison.

A duck glides smoothly on the surface, but paddles furiously beneath. Sounds a lot like an ATM, which requires coordinating hardware, software, telecommunications equipment, maintenance and cash replenishment to keep it up and running.

Whatever the mode of flight, these analogies suggest how complex cash maintenance and optimization really is. Many companies are cashing in on the trend by offering to coordinate maintenance from a central location.

"A lot of people only know an ATM from their car seat or at a grocery store, they know it from the cardholder's point of view," Walter said. "What they don't realize is that literally thousands of events and activities are going on. There are an enormous number of things that need to go right for an ATM to work."

Like many companies in this field, Gasper offers to manage the thousands of things that must go right every day. Problems can be caused by lapses in technology, communications or human resources.

Defining cash management

Independent ATM owners must balance a variety of considerations when attempting to make the most of their cash. According to Jackie Grimm of Diebold, cash management is a phrase that has been poorly defined to date. To get a better handle on cash management, information about the ATM's location and the number of transactions must be recorded. Machines in vacation spots or holiday shopping locales will have widely varying needs, for example.

"The question an optimizer has to ask is, what is best?" said Grimm, an event monitoring business manager at Diebold. "Is it to expensive to refill or let it sit? For some locations that's valid."

Diebold offers the Advisor, a cash optimizer and first-line repair and replenishment service. Diebold can monitor the flow sensors to determine how much money is left in a machine. After working with its customer to learn the cash flow history for a particular ATM, Grimm said Diebold can tell whether a machine can wait until its next scheduled drop or will require an emergency cash replenishment.

"We get the status of the ATM, and we know whether it's broken or whether it needs some additional cash," he said.

If a customer gets a cash flow status from an ATM signaling that 100 bills remain in a canister at 3 p.m. Thursday, but the machine is rarely used after 5 p.m., Diebold won't do an emergency cash run that costs $150 to $250.

"Instead, we'll let the cash handler know and see if he can stop there first. This minimizes the expense that a customer could incur," Grimm explained.

"It's an important function for the ATM owner to make sure that their ATMs are being serviced properly, that there's plenty of cash in there, and the interchange is being managed properly," said Randy Stratton of Boulder, Colo.-based Electronic Cash Management.

Stratton said some owners want to consolidate hardware, processing and bulk cash handling. They're looking for one company to bring them everything they need so they can set up the hardware, make sure the cash is going to be there and ensure that everything is set up properly.

"Those relationships are designed to provide the end user a better product," Stratton said. "It gives the independent owner more assurance that their product is being taken care of properly. The issue of running out of vault cash shouldn't be one."

Automated...but not entirely

Customers and owners alike have a greater expectation for solutions and services, and they don't care how hard the duck has to paddle to move smoothly. One solution: giving the duck a technological boost in the tail feathers.

Computerization enables one person to monitor many ATMs in a network, instead of the handful of systems that a single person could effectively follow before the advent of cash optimization decision systems.

"In the late '70s and early '80s, the span of control for a human ATM manager was one manager for every 25 ATMs," Walter said. "Now, you only have one person for several hundred ATMs. We allow that person to manage them and give them the same care and feeding, the same level of attention."

Gasper's Intel Pentium client-server network performs like a human resources manager that makes decisions on a real-time basis in parallel for several thousand machines. A current client, EDS, runs 17,500 ATMs this way. Bank of America manages nearly 15,000. Gasper overall manages 200,000 machines, more than 20 percent of the world's ATMs and more than half in North America.

However, Grimm said that a human element will always be needed to create the business rules that computers apply.

"The human element will always be there, but maybe to a lesser degree as tools get more sophisticated," he said. "Someone always has to build the rules, and check the rules, and ask the questions about whether it's time to run a trending report. Someone always has to evaluate or validate that things are correct. Nothing runs on its own."

Time is money

Stratton said the level of consolidation and change present in the ATM industry requires creating partnerships that can flex to accommodate growth. "We've positioned ourselves so we can offer vault cash as an unlimited resource. If they are growing from three to 30 to 300 ATMs, they won't have to find a new business partner to work with them on cash management."

The typical owner/operator spends $2,000 a month to maintain a full-function ATM and $1,000 for a cash dispenser. The machines need to be up and running constantly to recoup that expense.

"We are a small investment to ensure that their capital and operating expenses are providing customer service," Walter said. "We can drive uptime closer to the 100 percent level, whereas customers who use unmanaged networks can exceed downtime in excess of 10 percent."

Gasper provides reports to manage the service vendors, cash replenishment staff and other technicians who service the machines. The reports can detail how long repairs take, or what the response time was for a cash hauler.

"We're able to personalize it to a single ATM," Walter said. "If you are a network of 1,200 ATMs, I can make one machine have different rules. It must be repaired within one hour or we'll escalate."

Grimm concluded that these services will benefit the independent ATM owners. "In addition to saving costs on that end, the customer does not have to set up an infrastructure. We have that," he said. "And over time it will prove to increase availability and performance of the ATM, not only that it's up more but also that it's never down. That's the goal for a lot of customers."

From the source:
Mel Walter can be reached at Gasper, melwalter@ibm.net
Randy Stratton can be reached at Electronic Cash Management, randy@ecmcash.com
Jackie Grimm can be reach at Diebold, jacobsm1@diebold.com

Included In This Story

---

Diebold Nixdorf

As a global technology leader and innovative services provider, Diebold Nixdorf delivers the solutions that enable financial institutions to improve efficiencies, protect assets and better serve consumers.

Request Info

Learn More