Managed Services

Blog: Here’s the Operating Model that Could Change the Game: Are You In?

November 15, 2021  |  JULIE HOGAN

Consumers love accessing their financial lives on their phones—and there’s no going back. They enjoy the speed and the convenience of banking whenever it suits them, from wherever they are. They are keen to replicate that seamless experience in the physical world, via the self-service channel—and especially the ATM, whose strategic importance is reinforced in a post-pandemic world.

It’s time to make physical self-service as seamless as digital self-service.
Managing the ATM channel optimally, however, comes with a high degree of complexity. Running an ATM fleet is not always part of an FI’s core expertise and not something they can easily do by relying on internal resources only. Many FIs came to the realization that implementation and maintenance of devices across a broad geography was far from their banking core business, and started outsourcing these activities many years ago.

Installation and maintenance are just one small piece of the puzzle required to run an ATM channel. And, throughout the years, FIs have gradually concluded that externalizing more of the tasks required to manage the ATM channel could provide significant benefits, and they made further steps towards outsourcing. Often, they focused on the specific services where they had the least expertise, human capital and technological capabilities, and looked to a third-party partner to fulfil those specific needs. In most cases, this likely meant signing a managed service contract where they transferred the accountability of managing a particular part of their operations and meeting required business outcomes to a third-party service provider.

According to DN proprietary data, 46% of FIs around the global now believe that the importance of Managed Services has grown since the outburst of the pandemic. But what type of outcome can FIs expect from changing their operating model? In our latest guide, four FIs from around the globe share how outsourcing ATM operations has enabled them to deliver a superior consumer experience, be in full control of security and compliance and increase efficiencies and channel profitability. Let’s expand on that.

Underpin your organization’s expertise with flawless external support where it matters most.
Whenever they stop at an ATM, consumers expect to be able to complete one transaction or more. Whether it is to withdraw money, top up their mobile phone or deposit some cash and a check. However, with devices working 24/7, often located outside, availability should never be considered a given. There are lots of factors that come into play and put these devices at risk. At a bare minimum, to deliver against consumers’ modern desires, you need:
  • Highly skilled and trained field service engineers and desk support agents
  • Automated diagnostic and remote resolution capabilities using the power of artificial intelligence to pre-empt incidents or at least fix them in a matter of minutes
  • An accurate, constantly updated forecast of the cash position at each ATM and efficient management of cash handling operations

  • Complexity keeps increasing, making it a significant challenge to achieve high uptime scores simply by relying on in-house capabilities and resources. All four of the FIs that contributed to our guide have outsourced the end-to-end responsibility for uptime and report an availability of their self-service channel of over 99%.

    Get one step ahead of security and compliance.
    In 2020, losses due to ATM fraud attacks in Europe reached €219 million and financial loss due to explosive attacks on the same ATMs increased by 39%. And of course, those numbers don’t include the financial impact of brand reputation damage and customer attrition. Since 2016, the number of malware attacks has also more than tripled. ATM security is a very niche topic that requires constant attention and a deep level of expertise. Why take the risk to manage it in-house?

    Security and compliance require a multi-layered strategy. Outsourcing to a service provider who is also a hardware manufacturer, a software developer and deployer can ensure a holistic approach. If they have a global footprint, a service provider can leverage a continuously enriched knowledge base and regularly adapt all the protection barriers they provide. All FIs agree that relying on Managed Security Services allows them to increase efficiency as the scale, tools and expertise they access provides a higher level of security while minimizing requirements of staff and IT resources.

    Increase efficiencies and drive channel profitability.
    Managing an ATM channel requires deep knowhow in truly diverse areas (including technology, compliance, regulations and payments protocols, etc.) and very sophisticated infrastructure. The best can only be provided by specialized companies. Further, the cost in terms of time, skill development and operational overhead to keep the channel running with high quality of service (QoS) is at odds with the perceived return on investment; especially in this era of cost and capital spend reductions. Outsourcing certainly ensures a much higher cost-efficiency for our customers. It is a transparent model, ensuring there are no hidden, forgotten costs, and that all expenses related to the ATM network are predictable and known in advance. And, every percentage point gained in channel uptime, results in a higher number of transactions, as traffic across the ATM channel grows and the number of lost transactions is reduced. That means you benefit from increased profitability.

    Do you want to learn more about the specific benefits that each of the four FIs featured in our new Managed Services Guide shared? Get your copy of the guide below and share with your colleagues as collective knowledge is always the first step to success.

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