Blog: ATM ROI: Turning Challenge into Opportunity

October 08, 2020  |  THOMAS KARAKALOS

Fifty-plus years after the introduction of the ATM, is it fair to suggest that “access to cash” has been commoditized?  If so, has the world perhaps (wrongly, in my view) come to see the ATM strictly as a utility?

Financial institutions often struggle to balance the time it takes to maintain a fleet with the rewards it can offer. Yet I would argue, with the right strategy and operating model, the self-service channel can not only become a profitable asset, it can be one of your most strategic tools in a modern banking environment. 

But to do that, you might need a little extra help.

Seeing the Untapped Potential
The beauty of the ATM’s simplicity to the layperson is often the bane of the ATM deployer’s existence. The operating model for the self-service channel consists of intricacies, processes, costs and decades of “legacy baggage” the majority of the public are just not aware of. Yet soberingly, for financial institutions, it is a conundrum of value, and we often label it a Pandora’s box of cost versus reward.

When stacked up against other initiatives lobbying for resources (capital, know-how, time), defending the ATM workhorse and all the care and feeding it requires becomes a tough nut to crack. How does one prioritize the hidden value of the ATM? Because the fact of the matter is, in a world adjusting to COVID-19, what other banking channel delivers more customer impressions (especially those coveted off-us consumers) for you and your brand?

The financial industry has typically highly underleveraged the ATM—and the ATM has consistently been resource-heavy to operate.  So, finding the recipe to expose trapped value in an efficient “cost-to- serve” channel with an operating model that makes fiscal sense is paramount.

The world needs a disruptive approach to quickly change the TCO trajectory for the ATM channel.

Disrupting the ATM Paradigm
First and foremost, EMBRACE the ATM. It is a strategic gem in your crown of digital transformation and consumer engagement. No other tool exists that bridges the physical and digital worlds of banking in such an integrated, consumer-centric way. Shifting the paradigm away from the ATM being just a “cost of doing business” requires a fresh outlook on what is being underleveraged.  

Often, that can be as simple as freeing yourself from operational burdens. Taking a different approach and looking at the opportunity costs of maintaining all aspects of the ATM channel from end to end may just be the ROI eye-opener you need. What else could you be doing with your resources if you optimized management of your fleet?

Technically, the ATM can deliver countless opportunities to transform banking from consumer acquisition and engagement to NPS and increased share of wallet. From ecosystem consolidation to channel agility, you can unleash potential, release capacity (people and capital) and shift the profitability model. But to do this with finite resources, you need to challenge your own point of view on “do it myself,” “help me do it” and “take it off my hands.”  

Achieving ROI Goals: Knowing When—and How—to Outsource ATMs
Managing the ATM channel and the complex operations around it requires know-how, data-mining capabilities, tools and systems to keep the cash access workhorse “always on.” So, start thinking in terms of what you truly need to build yourself … and where you can instead partner or even outsource.  

The world of services to help manage the ATM channel is robust, including:
  • A la carte standard single-service solutions
  • Managed services packages with bundled value propositions
  • Full managed solutions with end-to-end enhanced business outcomes

  • All of these options are available today and can help you flip the ROI of your channel from cost center to value generator. You simply need to get the mix right for your financial institution.

    The good news is Diebold Nixdorf specializes in this world of ATM management and services. Our services portfolio, including ATM outsourcing services, will help you transform your operating model to rediscover the hidden value of the ATM channel. Ask us how to turn your ROI around today.