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Analyze this! Plastic in our ATMs?

January 2, 2014 by Richard Buckle — Founder and CEO, Pyalla Technologies, LLC

Upon further analysis, it would appear that the world is going plastic or, to be more accurate, polymer. When it comes to currency, polymer is making further inroads into global currency production. According to a news story by the BBC, the Bank of England says "polymer notes are the next step in the evolution of banknote design."

Polymer note technology was first developed with the support of the Reserve Bank of Australia, and in 1988 Australia introduced a complete line of polymer bank notes. Having just paid a visit to that country's fabled shores — where currency can lie for quite a long time on hotel bar counters awash in the "amber fluids" — the acceptance of polymer currency is not surprising.

It is probably an unrelated occurrence, but the timing of the announcement by the Bank of England is interesting. Having just lost the cricket test match series and with the loss, the legendary "ashes," to Australia, the Bank of England is turning to a local British company, Innovia Security, to supply polymer instead of doing what other countries have successfully done for some time: purchasing their polymer (indeed, the finished currency) from Australia.

It was another comment in the news announcement that caught my attention. The Bank of England "visited various shopping centers around the U.K. to gauge public opinion of the proposed change. Nearly 13,000 people gave feedback."

That the Bank of England performed such analysis is encouraging, as today barely a decision is made for any product or service, without extensive analytics being involved. But increasingly, relying on Big Data is becoming the norm — more so than traditional surveys — and those findings have more to do with what's going on in payment channels than with what is being dispensed.

According to an article by financial pundit The Motley Fool, Gartner Group is now claiming that CIOs will have Big Data and BI solutions "at the top of their wish list for the next several years … Data discovery, and the ability to push analysis to all areas of a business, is the wave of the future."

Furthermore, it's becoming increasingly obvious that Big Data and analytics are starting to influence the direction future payments channel infrastructures will take.

Sami Akbay, co-founder of Silicon Valley start-up WebAction, couldn't agree more strongly. In a recent email exchange, he stressed that "Big Data will be a big factor for banks with large networks of ATMs." (For those who might have missed it, Computer Reseller News just published The 10 Coolest Big Data Startups of 2013 and it included WebAction as one of these coolest startups.)

According to Akbay:

There are multiple areas: Instrumenting the ATM devices to proactively manage quality of service is a Big Data concern. More holistic fraud management platforms will emerge that include big data as a part of their algorithms ... customer service improvements will be driven by Big Data."

The analysis by the Bank of England provided the impetus to pursue the switch to polymer. The new notes will be slightly smaller, affecting distribution via ATMs, so "a gradual introduction will allow cash machine operators to alter ATMs to be able to carry the new, smaller note," according to the Bank of England.

Reading this comment I begin to wonder whether we will see existing ATMs being altered (I suspect we will), or will this be the catalyst that spurs the pursuit of even greater ATM innovation?

As we continue to stay away from bank branches and rely more on mobile devices for our banking needs, is analysis being done to determine what is really going to be required of future ATMs?

Said Akbay:

We will continue to withdraw and deposit at ATMs but much of the other activity will be moving towards personal mobile devices. At the same time, in the developing world, more ATMs and less counter activity would be the logical expectation. In order for me to go to an ATM, the device will need to do a lot more than I can do on my mobile device, so intelligence of these devices (powered by Big Data, of course) will be more important than ever.

New banknotes might force a rethink of ATMs and their capabilities, but they're not the only force for change. I suspect that analytics at the intersection of transactions — as we have with payments channels — and Big Data frameworks will highlight what many of us sense already: As a community we are changing rapidly and our needs are changing when it comes to our financial interests.

This drew another observation from Akbay, along with a pitch for the solution that WebAction is developing:

PCs, for instance, are practically dead — the transition needs to happen between the mobile devices and ATMs. This brings significant focus and importance to real-time processing of transactional and big data ...
Companies are trying to accomplish this by bringing together many different applications and tying them together using a tremendous amount of manpower. But the race against time and complexity is cost prohibitive when you have to build these solutions bespoke. WebAction allows you to cut the time and complexity drastically.

Differentiating ATMs by making them do more than we can on our mobile devices will prove a challenge for many financial institutions — but the data as to where preferences lie is being created even as we discuss this topic. Important data is out there, lots of it, and getting bigger every day — it just needs to be analyzed.

Perhaps it doesn't necessitate canvasing people in shopping centers, as the Bank of England did, yet its' hard to argue against doing something similar.

On the other hand, no one can afford to lose this critical payments channel or the customers who depend upon it. Clearly, more analytics lies ahead of us, and the winners will be those who are first to master their data, big time!

About Richard Buckle

Richard Buckle is the founder and CEO of Pyalla Technologies, LLC. He has enjoyed a long association with the Information Technology (IT) industry as a user, vendor, and more recently, as an industry commentator, thought leader, columnist and blogger. Richard participates in the HPE VIP Community where he is part of their influencer team.

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