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ATM outsourcing: a better branding idea?

May 10, 2013 by Rebecca Hellmann — Marketing and Sales Coordinator, Welch ATM

ATM outsourcing options have been around for years but many financial institutions remain unaware of the process and benefits of outsourcing.

Still others simply refuse to consider the possibility of turning over the responsibility for an important customer service channel to a third party. Whether this is due to worry over loss of control or issues with approval for outsourcing a resource that crosses internal departmental boundaries is debatable.

What these institutions might not fully grasp are the cost savings and additional opportunities that ATM outsourcing can bring to the table.

The no.1 benefit of ATM outsourcing is cost savings. Initial installation of an ATM can run upwards of $50,000 depending on location, construction, type of machine and surrounds chosen.

Following that original capital investment are maintenance, cash replenishment, billed work, consumables, security, communications, processing, power, site maintenance, insurance,  interest on cash … The actual yearly upkeep can run to $18,000, and sometimes more. That’s $68,000 for one ATM in just the first year of operation!

Smaller financial institutions often are hit the worst by these typical ATM costs. Their smaller fleet size means fewer breaks on equipment and service pricing compared with large institutions whose large fleets provide greater leverage in price negotiations.

Outsourcing providers can offer the same — if not better — negotiating and pricing power to smaller institutions. And as the outsourcing vendor is typically responsible for ownership and operation of the ATMs, it also removes the worries of initial capital investment. This cost savings not only benefits institutions with fewer ATM assets but can also provide a significant cost savings to larger institutions.

However, outsourcing can offer benefits beside simple cost reduction. A full investigation of the products and services available through an ATM outsourcing company can reveal some interesting opportunities for an institution.

For instance, many outsourcing programs include branded wraps and screens, decreasing the cost of brand-building at the ATM by packaging it with the already reduced cost of ATM operations.

Some outsourcing providers already operate ATMs in popular retail spaces and are willing to make those machines available in a brand positioning deal. A large ATM equipment and service provider can also offer the opportunity to use part — or all — of their network for surcharge-free access, allowing an FI to increase its ATM network almost instantly.

Many ATM outsourcing contracts also have built-in compliance guarantees. Recent and costly ADA changes already have many institutions rethinking their ATM strategies. With the threat on the horizon for further upgrades — PCI, EMV and near field communications — having an outsourcing provider deal with the headaches of equipment and software changes can be good for peace of mind — as well as the pocketbook. 

Ultimately, ATM outsourcing can offer new branding opportunities while freeing cash flow and employee time that might be better used for institutional growth and retention campaigns. How that time and money is reinvested is up to institution — and what type of brand it wants to be.

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