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ATM focus shifting from hardware to software

August 11, 2013 by Dominic Hirsch — manager, Retail Banking Research

People often ask me if ATM hardware is commoditised. The answer, perhaps surprisingly for a product that is nearly 46 years old, is no. ATM hardware continues to evolve and products are sufficiently differentiated for customers to justify spending considerable effort in selecting the products that best meet their requirements.

Increasingly however, the focus for ATM managers is shifting from hardware to software. This is most noticeable in more mature markets, where there is less emphasis on growing ATM numbers, and more on improving customer service and maximizing the effectiveness and efficiency of ATM fleets.

This is even more true for larger institutions and those formed through mergers and acquisitions, as these organizations often have mixed fleets of ATMs from multiple suppliers. It is complicated and costly to run different solutions on different machines, so these deployers are increasingly rolling out multivendor ATM software across their estates.

New research from RBR analyzes the current state of the multivendor software market, and discusses the experiences of those who have completed multivendor software rollouts and the issues being faced by deployers who are considering doing so but have not yet taken the plunge.

With multivendor software now running on 28 percent of ATMs worldwide and 56 percent of ATMs in western Europe, this is no longer a niche product. The market for multivendor software has more than doubled over the past five years, and RBR forecasts that it will grow a further 75 percent by 2017.

A significant finding of the new research is that an increasingly important driver of multivendor software is the desire to improve multichannel capabilities. Not only will this improve the quality of customer service, but through personalized marketing, it helps counter the challenge of ATMs being primarily cost centers.

With bank branches once again under pressure to cut costs, the ability to generate leads and even sell products at the ATM is becoming more important.

Just as with hardware, ATM software trends vary significantly between markets and regions, but the overall direction is clear — there will be an increasing focus on multivendor software for several years to come.

Reprinted with permission from Banking Automation Bulletin.

Read more about trends and statistics.

About Dominic Hirsch

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