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Commentary: future-proofing the ATM industry

In today's challenging business environment, a proactive approach is a must for survival and growth.

May 17, 2012 by Mike Lee — CEO of the ATM Industry Association, ATM Industry Association

In a recent candid discussion of the roadblocks faced by any ATM deployer who plans to introduce a system of differential, or variable, ATM convenience fees, Jeffery Keith, executive VP of global operations at Cardtronics, wisely warned, "Surprise does not work." He was talking about keeping stakeholders and cardholders well informed with the right messages regarding fee changes at the right time.

Certainly, surprise is never welcome in either the boardroom or the marketplace. That's because it increases uncertainty and confusion, the enemies of confidence. It can make leaders and their organizations look flat-footed and out of touch.

Right now, uncertainty is paralyzing economies across the eurozone. There seems to be a downward spiral in which flat-lining economic performance and uncertainty about the future of Greece and other fiscally challenged countries in the zone, as well as of the euro itself, feed and reinforce each other. This is all good news for the dollar but not good news for our European friends or for the global economy itself.

Yet it is simply way too late now to change the fact that everything has become reactive in the current euro crisis. Has this all been a failure of leadership, of governance, of financial systems? All of the above, but the current crisis also represents a failure of foresight. The chickens of years of short-term, self-serving thinking have come home to roost.

Jeffery Keith was so right: Surprise does not work. To prevent ugly surprises from popping up in the boardroom, the stakeholder community, among customers or out in the broader economy, it is mission-critical to get out in front of all issues; to think, plan, communicate and strategize well in advance of events.

Currently in the ATM industry, there are a range of issues to deal with, including interchange reduction (and the corresponding hurdles to overcome in implementing variable convenience fees), ADA compliance, financial inclusion, fraud threats and the prevailing anti-cash propaganda.

Fortunately, the ATM industry is blessed with strong leaders and is underpinned by a culture of technological innovation. In addition, the global performance of cash is very robust. But to overcome our current — and future — challenges, a proactive approach is now non-negotiable.

In his book "The Living Company," business guru Arie de Geus states that sensitivity to the environment, which represents a company's ability to learn and adapt, is one of the four habits for survival. This must be extended to include sensitivity to the future environment, given the reality of constant change.

A simple example of a proactive approach is how ATMIA last year commissioned a comprehensive ADA compliance guide to prepare the U.S. industry for this year's deadline for the upgrades required. Another example is our popular 2012 U.S. EMV migration committee to prepare for the liability shift recently announced by MasterCard.

In March and April of this year, MasterCard published in its U.S. Region Operations Bulletin (No. 3, 19 March 2012), its Global Operations Bulletin (No. 4, 2 April 2012), and its Global Debit Operations Bulletin (No. 4, 10 April 2012), comprehensive revisions to MasterCard standards to support the U.S. Region Point of Interaction Roadmap.

These bulletins outline acquirer and issuer chip support requirements in advance of the liability shift. There are clearly many issues and problems to address regarding EMV migration, which will require many months of education, discussion, planning and implementation.

It is not just organizations, including ATMIA, that need to be proactive in our era of endless challenges. And it is not just organizational leaders. Being proactive is for all individuals who have a deep desire to be more in control of their lives and destinies.

So what, then, are the elements of a proactive approach? As a futurist I reckon that an intense awareness of the future, ideally leading to knowledge of the future, is a prerequisite. This is commonly called foresight. Foresight is gained by applying the ability to anticipate to a study of trends and structures within the current operational environment and industry. This is not as hard as it might appear, bearing in mind that the future is more than fifty percent here with us already. You just have to know where to look for it.

An example of knowledge of the future is this forecast from a Retail Banking Research press release, dated October 13, 2011: "Strong demand for ATM cash withdrawals will remain one of the major drivers of ATM growth in the next few years. RBR expects the global installed base of ATMs to increase by 42 percent to 3.2 million terminals by 2016." This is a positive prediction for our industry based on current and past information.

We all need to think ahead. We can study the future. Then we can build a visionary strategy on top of this foresight. Futurist Peter Schwartz, chairman of the Global Business Network, reminds us that our strategies must be aimed at differentiating ourselves from the crowd: "No organization can be successful unless it has something unique to offer to the world. Really good strategy can only be based on being different from everybody else … You have to be different and better than the next guy."

Whereas operational effectiveness is aimed at making a company better, the purpose of strategy is to make a company different. Once a future-based strategy has been agreed upon by organizational leaders, business plans are developed to implement that differentiating strategy. Then these plans are managed and continuously reviewed.

This process of strategizing to stay different, while ensuring you get better at the same time, is part of future-proofing. The MacMillan Dictionary describes future-proofing as fighting against becoming obsolete, or outdated, reactively overtaken by events: "Something that is future-proof will not stop being used because it has been replaced by something newer and more effective."

This, then, is the case for adopting a proactive approach as organizations and as individuals. If surprises don't work in business, being proactive certainly does.

About Mike Lee

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