Thomas Swidarski wouldn't want you to think that the point of the machines he makes is just dispensing cash. "What Diebold is about isn't just about an ATM. What we are about is the managing of complex networks and systems," said Diebold Inc.'s chief executive. "When you look underneath the covers of what we do, it's the ability for people to be very efficient."
It is that efficiency that the North Canton, Ohio, automated teller machine maker is banking on. In the wake of regulatory reform, Diebold is betting bankers — especially in the United States — will start to address tighter margins in a financially reformed world. "Some of these regulations hit at reductions in fees that go across the whole banking industry. It's really going to force banking institutions to take a look at how they are going to offset these revenue fees," Swidarski said of changes to debit interchange fees, among other beefed-up regulations. "When the compliance becomes big and onerous, they begin to look for partners that have expertise that they can trust."
That may be so, but self-service and ATM sales were sidelined during the Great Recession, and Diebold took a beating as well. "But not more than a lot of other companies," said Wedbush Morgan analyst Gil B. Luria. "I wouldn't say it was a devastating blow, it was a rough year, even a year and a half."
But that's what caused the company to rethink its mission. "The slowdown in the economy, and high unemployment, and credit on a nationwide, on a global basis, took a big toll, and NCR chose to cut a lot of costs," he said of Diebold's archrival. "But Diebold decided to focus on the customer service side.
In fact, Swidarski said he's confident Diebold's number of domestic banking clients — roughly 10,000 — will increase tenfold in the next three to four years. That means providing more community banks with the ability to outsource technical aspects of their business.
Diebold has recently been pushing automated deposits that allow customers to feed money or checks directly into an ATM and apply that cash to their accounts. The company also is giving retail banking companies use of their mobile platform. Swidarski said that in the future customers will be able to transfer funds using cell phones or PDAs, and turn debit cards on and off remotely.
All of this potential comes at a time when the company has a lot to move on from. In June, Diebold resolved its case with the Securities and Exchange Commission over its accounting issues. An SEC release said the company settled the charges after paying $25 million in penalty fees. Still, going forward means building machines — yes, ATMs — that do what they are supposed to "100%" of the time. "Our whole premise is built on the reliability," Swidarski said. "We can't, Diebold can't, live with technology that would fail ... ever."
