You Probably Don’t Realize You are Outsourcing Your ATMs… But Are You Doing It Right?

Outsource ATM Blog

Many financial institutions prefer to “run their own ATMs.” For some, it is because that is how it has always been done it. For others, it is because they believe they can offer better and more reliable service that meets their brand image and cardholder expectations. But the truth is they are already outsourcing the ATM operations – and likely losing money on the deal.

“We’ve always done it that way” seems to be the typical response to running an ATM program. Owning and managing all of the support activities needed to run ATM operations, internally, is the method most financial institutions are familiar with. They have never really considered “Outsourcing” the ATMs. 

 You Purchased Your ATMs/ITMs Direct

The major ATM and ITM (interactive teller machine) manufacturers and resellers occasionally offer deals to banks and credit unions for their higher functioning machines and the software required for multi-function machines. However, the overall cost per ATM/ITM still far exceeds the discounted volume pricing being paid by resellers and operators purchasing in bulk. And, that larger price per location adds up quickly – generating a great deal of capital expenditure tied up in self-service hardware.

The issue of capital is only further exacerbated by the now seemingly revolving door of updates and upgrades. While ADA (Americans with Disabilities Act) has become practically a general standard and EMV is mostly put to rest, PCI and DSS continue to update. And now, financial institutions are facing yet another operating system change, with the announced sunset of Windows 7 in favor of Windows 10.

These continual upgrades are pushing the envelope for what many older machines can handle. In some cases, they are requiring not only software changes and updates to system drivers, but complete hardware upgrades as well. A few of the older machines may call for new operating cores, additional memory or new processing chips.

And while your capital is tied up with hardware, software and upgrade/update management, your staff is tied up managing multiple vendors such as hardware vendors, EFT processors, ATM networks, cash loading and servicing of the terminals.

Terminal Processing with Someone Else

The majority of banks and credit unions that operate their own machines do not have the ability to directly process transactions in-house. Instead, they partner with a processing company, that drives the ATMs, provides gateway access to the various ATM networks and has a portal that allows visibility into the ATMs’ status. This requires financial institution staff to monitor transactional and alert information provided by this company, in order to manage uptime and availability.

Service and Maintenance with Someone Else

Very few financial institutions have ATM/ITM maintenance technicians on staff. Instead, they contract with one or more service companies to help keep their ATMs operational – including preventative maintenance, fault or repair servicing and system updates/upgrades. Redirecting valuable staffing resources, financial institutions have the additional tasks of managing service calls, from open to close, in order to ensure service calls are completed and the ATM is back in service and running properly.

Someone has to Load the Cash

There are a series of detailed and repeated steps involving preparations for a cash load, balancing of the machines and cataloging/resolving ATM disputes. While these steps can be somewhat routine for financial institutions that handle their own cash loading for ATMs located inside or through-the-wall of a branch, they are still tedious because of the dual-control and time requirements placed on the duplicity of the staff. The steps and processes become more complicated for ATMs/ITMs located in a drive-thru lane or off-premise location. In addition to this work, delivering large amounts of cash to and from any ATM or ITM can be both dangerous and tempting, which is why the expense for armed guards are many times included.

Some financial institutions have attempted to reduce their risk during ATM loading, by instead ordering their cash and having the ATMs filled and balanced via armored carrier. But while duplicity of staffing has been reduced, someone is still responsible for timely scheduling and monitoring of the cash throughout the delivery process.

Outsourcing Done Right

Complete ATM outsourcing, or ATM managed services, resolves the issues many financial institutions may be finding with their current in-house process.

ATM outsourcing companies are 100 percent focused on ATM management, spreading their equipment, software and operational costs over hundreds of units in a large fleet of ATMs, as opposed to a small number of branch and off-premise terminals. This volume and focus provides leverage to drive down costs and increase efficiencies – improving uptimes and availability – while saving financial institutions a great deal of time, energy and expense.

Many community banks and community credit unions have come to realize that while the ATM delivery channel is an essential service to their cardholders, it is no longer part of their core competency. So much has changed in recent years such as the adoption of the Americans with Disabilities Act, the Durbin Amendment, operating systems and EMV, and so much continues to change including ATM Network mergers, P2P and NFC. It is next to impossible for the community financial institution to understand everything that is happening with ATMs – as well as on-line account opening, mobile and PIN/SIG debit. And guess what – all of those services are outsourced.

To learn more about how ATM outsourcing can benefit financial institutions, download the white paper: Why Financial Institutions are Opting for ATM Outsourcing.