Many financial institutions prefer to “run their own ATMs.” For some, it is because that is how it has always been done. 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.
Consumers have been frustrated by the EMV process at the POS because they are unfamiliar with the way the transaction works and it is not universal at all POS terminals. The result is confusion and longer transaction times as both merchants and cardholders wade their way through the learning process. While cardholders may be disappointed at the length of time an EMV transaction takes, the process will speed up once they are more familiar with the steps and know exactly when it should be used. The key to avoiding these problems for a smoother ATM transition is to create a unified experience. It is up to FIs and their ATM networks and suppliers to make this happen.
There are many ways financial institutions currently define their ATM network. Some may call them “costly.” Others label them as an “account holder expectation” or a “hassle.”
Many banks and credit unions don’t realize that selecting the right ATM Managed Services vendor streamlines the channel operations and can turn a network from “costly” to “convenient.” ATM Management companies can easily provide this much-needed relief – providing financial institutions and their cardholders with a wide range of benefits.
ATM equipment can be expensive. The typical capital investment for ATM hardware ranges from $6,000 to $40,000 – depending on the size and operations capability of the machine. In addition to initial expense, financial institutions must perform ongoing operations and management to connect, maintain and service each ATM.
In some cases, regular operation requires contracts with third-party vendors. The institution will also likely incur personnel expenses to arrange and monitor each of the ATM functions. Finally, banks and credit unions must maintain ATM compliance for each machine – including hardware and software upgrades to meet security compliance, ADA (Americans with Disabilities Act) compliance and EMV chip-card compatibility.
Natalie Brooke had a great blog, “Is Your Bank Too Fat?“. “Complacency,” “low activity” and “aversion to change” are a few characteristics that can cause unwanted weight gain. In the financial world, many banks and credit unions fall into the same rut by “doing business the way we’ve always done it.”
EMV migration is going to be an expensive endeavor for credit unions. Card issuance will require licensing of authentication IDs, and production of new plastics will now cost two to three times more than magnetic stripe cards. ATMs will also need new hardware and software. On top of all of this, credit union members will need to be educated on the new payments process.
When it comes to ATM-related headaches, Tony Black, president of Baylor College of Medicine Federal Credit Union, has experienced a few migraines.
“We were sued once for allegedly not having a [fee disclosure] sticker on an ATM and we also had an ATM stolen out of the lobby of an office building,” Black, president of the $37 million, Houston-based institution, said.
We all know about the increasing amount of card fraud occurring in the United States. Home Depot, Target, Neiman Marcus, Kmart, Staples, popular Asian-style restaurant P.F. Chang’s and Goodwill Industries are only a few of the most recent card breaches consumers have seen in the past year.
Paul Albright believes that talking to community bankers about reclaiming capital tied up in their ATM networks is an educational opportunity. During their conversations. Albright says he detects a “light bulb going off” moment when the banker says. “why had I not thought of that before?”