News
Experts expect more ATM services outsourcing
January 24, 2005
Competition to reach new customers and tap into unbanked markets has forced bankers to change the way they view the financial services industry - making them focus on building their customer base and improving customer service.
Keith Myers, executive vice president of the financial division for independent ATM operator Cardtronics, said banks are outsourcing more of their ATM services because they want to focus their energy on what they do best - serving their customers.
"I think five years down the road you will begin to see serious competitors that can provide a whole range of ATM services," Myers said.
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Hayes said that's because both Efmark and Bantek provide service and maintenance at a lower cost than ATM manufacturers, and each offers banks a complete service package. It's like getting all of the ATM service needed in one stop.
One-stop shopping
Robert Malik, senior vice president of Efmark, said banks are interested in one-stop shopping when it comes to service.
"Ten years ago, almost all of the first-line servicing was done by the armored car companies," Malik said. "Now, more of the maintenance companies (or the banks themselves) are doing the first-line work."
But while some banks still handle their own first-line service issues, such as changing ATM receipt paper, a growing number are outsourcing first-line service. Malik said that's because they can't spare staff to perform first-line tasks, especially at off-site ATM locations. And working with one company just makes sense for all of the ATM servicing, he added.
"From a maintenance standpoint, a third-party company knows the ATMs (better than the bank)," Malik said. "From an accountability standpoint, you have one company that's accountable when the ATM goes down, rather than different companies pointing fingers."
When banks handle their own first-line maintenance at branches, he continued, they must still keep a separate company on-call in case an ATM goes down at night or over the weekend. If the ATM breaks down or has a paper jam outside of regular business hours, the back-up company is called.
Malik said when a bank and another company are handling the first-line service, it's hard to know whom to call after-hours when the ATM experiences a first-line service problem, like running out of receipt paper. And a bank using different providers for first- and second-line service must contact yet another company if second-line service is required after-hours.
Such a situation can result in excessive down time and lost transactions at the ATM, Malik added.
Efmark founded Premium Armored Services in 1999 so that it could offer all the ATM maintenance and service a bank or credit union needs, including cash replenishment and cash management.
"We believe that what we're offering makes us unique out there," Malik said. "Manufacturers always talk about 98.5 percent availability. But banks are looking at 99 percent availability, because a half of a percentage point can make a huge difference."
