Blog: Maximizing the Cost-Efficiency of the ATM Channel

Like all other channels, the ATM network requires robust management on all fronts paired with continuous innovation to deliver new services and a high-quality experience, adjustments to meet new compliance standards and security threats. All this comes at a cost. However, FIs can control spend and ensure their self-service channel benefits from significant cost-efficiency gains by making the right technology and operational decisions.

Simplifying deployment and ensuring cost efficiency

As ATM networks require refreshes both from a hardware and software perspective, the costs of deploying new technology can be significant. Therefore, it is essential to find ways to control these costs as much as possible. Investing in efficient and compliant solutions now also minimizes the risk and high cost of compliancy and security shortfalls in the longer term. 

Device certification costs can be minimized by opting for hardware and software that have been developed to maximize synergies with each other. This will help reduce deployment time, making implementation more cost-efficient. Another factor to consider is the need for structural adjustments when replacing devices on-site. Significant savings will be made, for example, when replacing through-the-wall ATMs with devices of the same size. Opting for devices where cash recycling can be enabled via a software update is also a source of savings. Finally, terminal application software that is easy to brand, deploy, maintain, and upgrade will reduce the need to rely on specialized developers or professional services. 

Reducing energy consumption

Depending on the local energy mix, most financial institutions have initiated energy consumption reduction programs. When considering refreshing a part of your fleet, it is wise to ensure new devices are built with highly energy-efficient lighting and electronic components, assessing manufacturer power consumption data. Devices able to turn themselves on and off at predetermined times can also significantly reduce energy consumption and should be prioritized.

Optimizing costs and reducing risks through better compliance and security management

FIs can achieve significant savings by keeping their ATM fleet compliant and secure. Always-on compliance reduces the cost and time spent on regulatory audits and ensures avoidance of fines and penalties. A compliant fleet is also easier to monitor and maintain with automated updates and consistent configurations, thus generating operational savings. Optimized security protects from attacks and reduces related financial losses whilst possibly lowering insurance premiums. Not to mention that security breaches can lead to the loss of customers and the need to invest in crisis PR and new customer acquisition campaigns.

Minimizing the cost of cash

The cost of cash can account for up to 50% of a self-service device’s total cost of ownership (TCO), encompassing interests tied to immobilized capital, cash-in-transit (CIT) services, and in-house management of the cash cycle. FIs can minimize costs by following a four-step approach.

Step one involves leveraging data to gain actionable insights into cash operations. Advanced cash forecasting and planning reduce cash handling efforts and CIT costs by right-sizing load schedules. It also minimizes non-productive cash stocks, lowering capital costs and insurance premiums. Insights from cash data can also help identify optimal locations for transitioning to cash recycling hardware, ensuring strategic, informed decisions.

Step two is to deploy cash recycling hardware with high-capacity, configurable cassettes, future-proofing your fleet. Enabling SMB deposits through cash recyclers removes the financial burden of deploying and maintaining additional devices or facilities and eliminates any branch staff involvement in the processing of deposits.

Step three focuses on optimizing cassette configurations across the ATM fleet. By analyzing cash flow data, FIs can implement flexible, location-specific setups that minimize residual cash and further decrease CIT interventions. 

Finally, enabling cash recycling (step four) integrates deposits directly into the cash cycle, allowing deposited notes to be dispensed to customers again. This seamless process creates an efficient and cost-effective cash cycle. Flexibly configurable cash recycling devices with high physical note capacity and robust cash management will streamline cash operations and significantly reduce the total cost of cash ownership.

Cutting down transaction processing costs

For decades, FIs have been locked into routing each card transaction at the ATM to the relevant scheme and charged a fee. This game is over. They can now experience next-generation software built on a microservices architecture, which can allow the routing of on-us transactions directly to their core backend system. This means an FI can facilitate transactions in-house whenever possible — saving money and driving efficiencies. Leveraging cloud-native microservices enables FIs to realize the desired end state of building once but using across multiple payment rails for better operational and cost controls.

Saving time and driving efficiencies through a managed services operating model

Outsourcing the end-to-end management of the self-service channel can help streamline in-house resources and remove the need to build, maintain and continuously upskill teams of experts. It also reduces investments in expensive infrastructure, management tools and related upkeep costs. 
FIs gain from economies of scale and more cost-efficient channel management. There are no hidden, forgotten costs. All expenses related to an ATM network are predictable, planned, accounted for and monitored.

Supporting FIs as a strong partner 

At Diebold Nixdorf, hardware and software are developed to maximize joint performance, enabling easier, faster and cost-efficient deployment and lifecycle management - all supported with an efficient service model to ensure customer satisfaction. Minimizing energy consumption and environmental friendliness are top priorities for every new solution we bring to market. DN Series enables between 40 and 60% energy savings compared to the previous device generation. We lead cash recycling technology through market-leading cassette capacity and configuration possibilities, with cash recycling enablement through a simple software update, enabling our customers to significantly reduce their cost of cash. With Vynamic Transaction Middleware’s adaptable cloud-native transaction processing platform, FIs can implement a host of reusable services, including processing on-us transactions directly to their core for significant cost savings. Finally, we operate self-service channels on behalf of more than 1,000 banks and credit unions, driving operating cost savings of up to 40%.

Would you like to know more about how we can help you maximize the cost efficiency of your ATM channel without compromising the experience delivered to your consumers? Let’s start the conversation.