As changes in banking and customer financial needs continue to evolve, many banks are looking for efficiencies across their business to reduce operating costs and staffing while focusing more on customer service. One area some banks continue to review includes managing and maintaining their ATM fleet.
“Financial institutions are adapting to meet the rapidly evolving consumer demands for convenience, digital engagement, and self-service,” said Frank Hauck, President and General Manager of Banking for NCR. “They are also re-evaluating their channel infrastructure and are increasingly shifting activities to end-to-end ATM solutions and services providers."
ATMs remain a critical – and for many, preferred – banking method, which we saw heightened during the pandemic when contactless options became a lifeline for consumers in need of cash or a safe method to deposit money. As human capital resources are stretched thin, or diverted to higher customer-focused priorities, outsourcing ATM operations is an area to be regularly evaluated for time and cost-saving measures.
“We’ve found financial institutions are eager to implement an ATM Management Program for many reasons,” said Jason Roth, President of ATM USA. “On the surface, a partner can often help them reduce operational costs and avoid large capital investments. We also ease their burden with regards to expensive upgrades and compliance.”
While outsourcing these functions has been a growing trend over the past several years, many financial institutions are still mulling over the switch. If you haven’t already outsourced, or still manage a portion of your fleet, here’s why now is an optimal time to consider handing over the day-to-day management and replenishment services of your ATMs.
Fast-Moving Tech
Managing technology in this fast-moving landscape can be challenging. Technology for ATMs continues to evolve as software enhancements, improved security features, and compliance require frequent updates and dedicated staff to maintain an ATM program. If your bank isn’t keeping up with the latest software updates, you remain exposed and vulnerable to threats like hacks. If the staff infrastructure isn’t in place to stay on top of tech needs or isn’t proving to be cost effective, now is the time to outsource to ensure peace of mind.
Servicing Customers, not ATMs
Bank staff is expected to be more universal with a heightened attention to giving the best possible customer experience. If they can leave ATM maintenance and cash management to a partner, it allows them to focus entirely on their customers. In addition, the required time and expertise required to maintain compliance puts further demand on your branch employees’ time. Leveraging a partner reduces compliance needs while allowing you to still meet regulation requirements that can often change.
Roth added that “on a deeper level, clients seem to really appreciate being able to utilize their employees’ time more efficiently. As the labor market continues to tighten, allowing more employees to focus their time and energy on serving the financial institution’s clients instead of dealing with ATM issues is a tremendous benefit.”
Rates on the Rise
Interest rates are on the rise, it’s not a matter of if but when and how much. When they do, your ability to manage cash well will become even more critical so now is the time to put a solution in place in advance of the continually rising rates. Since these fluctuating rates leave financial institutions vulnerable to rising costs, it’s important to have a partner that can leverage their industry experience to forecast ATM cash to balance customer cash needs and interest rate changes.
Leverage the Cost-Saving Power of Outsourcing
By outsourcing functions like ATM upkeep and staff time devoted to maintenance and management, banks can often reduce their overall operating costs by an average of 20-30%. From an accounting perspective, it also moves these processes from a balance sheet asset to an operating expense, an appealing shift for banks measured on ROA.
"Financial institutions are turning to comprehensive solution providers like NCR that can help them reduce their overhead costs, simplify their operations, enhance the security and experience for their customers and help them grow market presence with no capital investment," said West.
Imagine if you could take the cash from your highest performing ATMs and use it for other purposes. What would you do with that newfound capital? Purchase more equipment? Update your tech stack? The possibilities are endless.
These are just a few benefits of leveraging trusted partners to handle ATM maintenance and cash management – something that comes sharply into focus during branch rationalization. Take time to explore hard costs vs. soft costs to determine if it makes fiscal sense to manage any or all these functions in-house. There are also additional methods to consider to further reduce costs and eliminate errors like Smart Safes or vault optimization. If you’re still on the fence, now is the time to consider how ATM outsourcing can help save time, headaches, and money in the long run.
John Clatworthy, SVP and Chief Customer and Strategy Officer at Cash Connect, a Division of WSFS Bank
