1 the atm – more than just cash ? graham mckay executive director atmia europe

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The ATM – More than just Cash ?

Graham McKay

Executive Director ATMIA Europe

[email protected] Graham McKayExecutive Director ATMIA Europe

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ATM Industry Association (ATMIA)• Non Profit Global organisation with over 1000 members in more than

80 countries, covering NA, LA, EMEA and AP. (Database of 10,000 contacts)

• ATMIA Represents :-– ATM Manufacturers– ATM Deployers (Banks & Independent)– Cash in Transit– Switch Operators– Transaction Processors– Security Providers– Support Products

• Three prime areas of interest– Security (Global ATM Security Alliance- GASA)– Legislation, Regulation and Standards– Technology, Functionality and Business Efficiency


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ATM Industry Association

• As an independent, non-profit trade association, our mission is to :-– to promote ATM effectiveness,

convenience, growth and usage worldwide; – to protect the ATM industry's assets, interests,

and customers; – to provide education, best practices, political

voice and networking opportunities.


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Agenda items for Discussion

• Current technology available

• General Impact of current technology

• Drivers focussing current ATM functions

• Potential factors impacting future ATM functions


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Latest ATM Technology Developments

• Cash out & Cash deposit• Check reader• Ticketing/mktg offers• Utility Bill payment• Enquiry channel• Statement printer• Card Top up• Marketing terminal• Secure transaction environment


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Technology is not the problem

• Available from all main manufacturers


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However………

• Buying an ATM with “multi-function” capability is just the start.

• The “switch” network needs to have capabilities for message routing for utility bill payment, and card top-up (mobile phones and pre-paid cards)

• Bank back office software will be required for deposit automation, check processing, and media marketing distribution.

• The drivers for this additional investment will be based on the following…….


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The Drivers for more than Cash

• Cost Cause & Effect

• Demand Cause & Effect

• Security Cause & Effect


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COST - Impacting ATM functions

• Cause– Overall cost of ownership– Cost/risk of Cash ownership and movement– Need for new Revenue Generation– Need for increased Transaction Generation– Need for more Customer Generation


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Typical Costs of Operation per ATM

Depreciation$3,290Installation

$165

User Maint$2,980

Consumable$725

H/W Maint$3,120

Cash Provision$3,035

Cost of Cash$3,090

Interest on Cash$3,080

Insurance$1,270 Occupancy

$4,480

Communications$3,110

Central Services$6,175


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COST – Effect on ATM functions

• Effect– Cash recycling– Increased CRM (targeting)– 3rd Party Advertising– Search for partnerships– Mergers & Acquisitions– Expanding to un-banked


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Cash Handling Chain

ATM

S U P E R M A R K E T


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The Success of Bulk Cash Deposit

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Amount of customer deposits

In 14 months a major international bank has seen approximately £290,000 deposited per machine per month via 150 Deposit Machine rollout ($40m/month)It would now require an additional 105 branch staff to manage these transactions without the device


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The best way for direct contact ?Consider Banks with Network of 100 or more ATMs?

..With average 100 Transactions a Day!

10,000 Transactions happening per Day10,000 Transactions happening per Day

If “Wait please” screens takes 8 Seconds to authorized the transaction, then you will have

80,000 Seconds a day of 80,000 Seconds a day of SELLING OPPORTUNITY SELLING OPPORTUNITY for 10, 000 for 10, 000 Customers Customers DAILYDAILY

AND…AND… Consider the opportunity to reach your Competitors’ Customers Consider the opportunity to reach your Competitors’ Customers

using your ATM (Not on us transactions)?using your ATM (Not on us transactions)?OR….OR….

Social impact of locally advertising missing children, accidents, Social impact of locally advertising missing children, accidents, weather warnings, or events !! weather warnings, or events !!


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Reaching the un-banked

Prepaid Debit CardsTop up at Bank or

ATM


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Demand – Impacting ATM Functions

• Cause– Technology Innovation– Customer requirements– Additional Services– Globalisation– Efficiency drivers– Product Standardisation


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Possible Choices

• Credit Cards, Debit Cards, Cash, Prepaid Cards and cheque.

• Is there a balanced offering between Credit cards, Cash, and top up Debit ?


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Demand – Effect on ATM Functions

• Effect– Value Add cards– Mobile phone integration– Kiosk integration– Rural need for Multifunction– Inner City Branch separate functions– Branch redesign – Unmanned branches


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The Success of the Kiosk

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Number of customer transactions via Kiosk

In 14 months we have seen over 6 million transactions and 1 million unique users via our 510 Kiosks (Major International Bank)It would now require an additional 220 branch staff to manage these transactions without the device


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New Branch Designs

….. Manned

Un-Manned ……


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Integration of ATM, Telephone and Kiosk


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Direct Service Transactions

• Roll out Pilot Branches and first Branches with DirectService

• Roll out DirectService• Optimisation of concept• Use commercial leverage

of the concept

• Roll out DirectService• Fully commercialise

concept by sales programme

Phase 1Introduction of

concept

Phase 2 Optimise and

commercialise

Phase 3Commercialise

Sales

Roll Out


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Contactless Transportation Payments

• Combining Pre-Authorised Debit with contactless technology

• Targeted transport and retail in transportation area

• Quick serve restaurants Mastercard with TacoBell

• Touch and go contactless card pilot with Barclays and Visa in London

• Proprietary examples – Paris Metro, London Oyster, HongKong

© 2006 S1 Corporation. All Rights Reserved


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Security Impacting ATM Functions

• Cause– Card vulnerability– Biometrics vs PIN– National vs International– Identity fraud– Cash Target– Criminal technology


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£ M

illio

ns

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Lost/stolen card Mail non-receipt Counterfeit card

3rd Party Application fraud Theft of card details (CNP) Account takeover

Card Losses in UKCard Losses in UKCard Losses in UKCard Losses in UK


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Security Effecting ATM Functions

• Effect– Cash vs Cashless– New Card Technology– Biometrics– Mobile phone integration– Software pattern spend recognition


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Chip & PIN vs Biometrics

• CHIP & PIN has dramatically reduced crime, but created a “displacement” crime

• Traditional biometrics (finger, iris, retina, vein, etc ) still expensive to implement

• Biometrics using CRM data for “on screen confirmation”, or additional POS identification.

• Scrambled PIN using either mobile phone or mobile PIN device


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Software Systems

• Predictive pattern spend currently used in conjunction with “credit” cards

• Implementation to include “debit” cards and SMS update of last transaction and location

• “International” cards to be tagged for use overseas, and with an additional password.

• Additional password could be CRM generated and/or using a portable PIN update device


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…and in Summary• There are three drivers for ATM functions other than

cash :-– Cost

• Which will result in increased demand for Automated deposit & Cash recycling at the ATM

• Advertising, CRM and reaching out to the un-banked

– Demand• New technologies will push the usage of e-cards, and mobile phone

use• Branch redesigns and integrated Kiosk functions

– Security• Will increase the drive for biometrics and CRM customer recognition

– negate weakness of magnetic stripe, strengthen PIN authentication• Provides focus for “cashless” and customer spend prediction software

(used with credit cards – limited with debit cards)


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Through the Wall ATM !

More than just cash ……..


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THANK YOU FOR LISTENING

QUESTIONS ?

Graham McKay Exec Director ATMIA & GASA

Please contact me for more information regarding the ATM Industry Association

[email protected]

1 the atm – more than just cash ? graham mckay executive director atmia europe

Documents

atm slide

atm industry association

atm effectiveness

contacts atmia

future atm functions

cost impacting atm functions

atm industrys assets

customer generation