Article

Wincor broadens banking, retail tech

Company targets Asian, Russian and Indian markets.

February 3, 2008 by Tracy Kitten — Editor, AMC

PADERBORN, Germany — Wincor Nixdorf International continues to rank Europe as its No. 1 region for business, but business in other markets is picking up, says company chief executive Eckard Heidloff.

"For us, Asia is as important as America," Heidloff said. "We are looking to Asia and the Americas for growth, but we are also looking at emerging markets. We now have two subsidiaries in emerging markets, in Russia and India."

Wincor Nixdorf's annual trade fair, Wincor World, where Heidloff made his remarks, attracted more than 7,000 international attendees — a total that included more than 100 international journalists — to its base in Paderborn, Germany.

And though Wincor's banking business continues to dominate the show, retail technology is attracting more attention. Restaurant, grocery and general retail offerings attracted greater attention than in years past, with a strong focus on overall cash management.

Wincor Nixdorf brought a prototype card-dispenser to the show. It can guide a user through the process of choosing a card layout, and print it with card numbers and name in a matter of minutes. The prototype, finished mere day before Wincor World, was surpringly popular, according to a Wincor spokesman.

"On the banking side we have end-to-end solutions," Heidloff said. "On the retail side, we have integrated store solutions. We are taking our experience from the banking side and applying it to retail applications and overall retail operations. In each segment, retail and banking, we have our multivendor software with a very open architecture, and that has been huge for us."

Just as the company strives on a micro level to more evenly divide its business between retail and banking, on a macro level it strives to accomplish a 50/50 split between its hardware and software sales.

From fiscal years 1999/2000 to 2006/2007, Wincor Nixdorf has made strides toward closing the gap. Hardware sales, which seven years ago accounted for 67 percent of the company's overall business, now accounts for 58 percent. Software and services sales went from 33 percent to 42 percent during the same period.

That leveling may in some ways be attributed to improved U.S. sales, which Heidloff says the company expects to build upon, despite the relative weakness of the U.S. dollar.

"Sales in the U.S. have been up, but the numbers have been hurt by the weak (U.S.) dollar value," he said. "We expect (U.S.) banks to continue investing in our equipment and software, because we can improve efficiencies. We do not see any crisis coming, unless retail bankers cut their budgets by 50 percent."

Jeffrey Roster, research vice president for Gartner Inc., said Wincor needs to adopt a more aggressive stance when it comes to pursuing the U.S. market.

"Most likely Wincor will need to develop a more aggressive approach to North America where they are clearly well behind the market leaders in terms of revenue," Roster said. "I'd also expect them to focus on the BRIC countries (Brazil, Russia, India and China). For them to gain market share in North America they will have to morph from a hardware-centric strategy to a solutions approach. Retailers are increasingly viewing hardware as commodity and refusing to pay a premium for retail rugidability. Software and services, however, are a different matter. But they will find plenty of well entrenched company in the retail solutions space."

Cash management

Cash recycling, managed services and outsourcing will be focal points in the coming year.

"Improving the cash-management process is key in both the banking and retail segments," Heidloff said. "Cash management can be rationalized at different levels. In a branch, with cash optimization, we can improve the cash process, on average, by 20 percent. Some banks have been able to save up to â‚¬2 million per year."

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In banking, cash management is connected to branch renewal. Within ProClassic/Enterprise, Wincor's newly-launched retail banking solution suite, one designated module delivers a unique cash management solution across numerous channels including the ATM and teller. That includes tracking cash cassettes from CIT to the branch using RFID technology Wincor introduced last year.

"This is pretty unique in the market," said Wincor's Rebekka Muschiol. "We offer the customer (the bank) the ability to track the cash from beginning to end."

Branch renewal also includes coin deposit and dispense automation, which Wincor is using only in certain markets.

The coin solution is built on the ProCash 3000, which offers automated cash and check deposits. The ProCash 3000 Coin is designed to accept between 10,000 and 25,000 coins per day, says Helge Wonka, a banking division product manager.

"It may be better suited for European and Asian markets, where our customers have high volumes of coins," Wonka said. "We currently have clients in Germany, Austria and Switzerland using it."

The transcending customer experience

"Customer experience will constantly be evolving," Heidloff said. "We see self-service being much more customized in the future, and we've developed a (modular) platform that can easily adapt to changing (customer) needs."

On the banking side, PC/E's (ProClassic/Enterprise) ability to connect the ATM to the mobile channel is customizing the customer experience.

Wincor's Micheal Engel says Wincor is testing a self-service remittance solution on its ProCash 1500xe that connects with mobile devices.

Using SMS/text messaging, bank customers can register for fund transfers to recipients via numerical verification codes.

"A user would merely have to register for the service with the bank. From there, he gets a number from the bank to text to transfer funds," Engel said.

A PIN is sent via text to the user's mobile device after he requests a transfer. He then passes that PIN on to the remittance recipient, who enters it at the ATM to collect the cash.

"It eliminates the need for a wallet, and it's an application that can be built upon in the future. With near field communication, the phone could be the identification device," Engel said. "The phone's chip, for instance, could be used with a PIN to verify a user at the ATM. There are a number of possibilities. But we wanted to start off easy, with something users know and feel comfortable with — text messaging."

Because the solution is built around basic text messaging, it does not require downloaded applications on mobile devices to communicate with banks.

With a hardware upgrade, existing ATMs from any vendor can be upgraded to enable text transferring via Wincor's solution, Engel said.

Branches of the future will build on the mobile channel, aiming their services and experiences within the branch to targeted demographic groups.

"Branches in 2020? That is difficult to predict," said Uwe Krause, head of marketing for Wincor Nixdorf's banking business. "But I think branches of the future will be more â€˜emotional,' gearing their services toward certain groups."

On the retail side, the integration of self-service to complement some full-service applications will be the way of the future.

"I think in five, at the most 10, years, we will have dedicated self-service areas in all hypermarkets. That is what customers want," said Joachim Pinhammer, marketing director for Wincor Nixdorf. "But I do not think it will all be self-service. There will be a mix."

A photo gallery from the show is availablehere.