ATM Outsourcing: Turning Costs into Profits

New hardware and software are revitalizing ATMs, but the cost can be high. Now there’s a way for financial institutions of all sizes to upgrade to the latest ATM technologies, and improve their bottom lines too.

Without a doubt, ATMs are critical to the success of any financial institution. Today’s customers want and expect immediate access to their money—no matter where they are, day or night. Yet while your customers may take ATMs for granted, you know that behind the scenes, owning and operating a network of ATMs is a complex endeavor. Whether it’s replenishing cash, clearing up paper jams, fixing broken parts, processing transactions, or upgrading hardware and software, ATMs need constant attention.

For the past three decades, successful financial institutions have incorporated the time and money needed to operate ATMs into their business plans, keeping their customers happy and their financial statements healthy. But the ATM landscape is changing, and what was once a simple proposition—providing customers with cash—has become much more complex, forcing financial institutions with technologically obsolete fleets to take a closer look at their ATM operations and consider upgrading.

ATMs are still the leading touchpoint for a financial institution to interact with both customers and non-customers, and the quality of the ATM customer experience drives customer loyalty. According to a 2007 Javelin Research study, 42 percent of bank clients cite ATM access as a key criterion for selecting a financial institution. As many financial institution customers interact solely with their financial institution via the ATM, an upgraded ATM fleet with the latest technology and functionality can be an important competitive differentiator.

Conversely, a fleet of outdated ATMs can cost you customers—especially savvy online banking customers who have become accustomed to advanced features and a personalized online experience. And, according to Harris Interactive, 29 percent of participants in an ATM study said they would likely follow up on an offer given during wait time at the ATM if it could be immediately initiated.

In addition, Tower Group estimates there are roughly 200 trillion seconds annually of “please wait” messages at ATMs worldwide, offering financial institutions considerable free air time to promote banking products and services.

The advent of Windows-based ATMs, simple ATM integration with CRM software and TCP/IP communications makes it easier and less expensive for financial institutions to create and distribute targeted marketing campaigns. Customers are easily identified through their cards at the ATM, which makes personalized marketing fairly straightforward.