To get a better idea what to expect from the ATM business in 2014, we asked professionals from across the industry what the year’s big newsmakers would be. Below, you’ll find their insights.
What do you think 2014 will bring? Add your comments at the end of the story.
When Henry Ford went to his board of directors in the late 1920s and said that he wanted to introduce the Model A to replace the Model T, their response was that they had already saturated the market and a new model would not sell — people who wanted cars already had cars. Imagine that.
I think that is what the ATM industry is going through — we need to introduce the “Model A” and charge forward into a market that is still growing, replacing, and maturing.
The low hanging fruit has been picked, so we have to work smarter. Henry did, and look what happened to his industry.
— Bill Dunn, VP of sales and marketing, Hantle
This year brings more challenge and opportunity for the entire self-service industry. EMV and PCI will continue to lead the way as opportunities to further enhance consumer card and data protection.
In conjunction with compliance efforts, device owners are focusing on new technology and driving efficiencies through their self-service channel; 2014 will mark the end of Windows XP support and the mainstream adoption of Windows 7.
All of these factors will challenge ATM owners to keep pace with compliance, improve data security and leverage their existing investments.
— Brad Browder, president and CEO, Pendum
Amidst profound and permanent changes to the way banks make money, consumers are also changing the way they interact with their financial institutions. As an industry, we support consumers who demand services based on their presence and preference – the expectation that banks will be there when they want, where they want, how they want and for what they want.
We see a future that is more than ATMs — it’s a future where physical and digital channels share common data, software assets, standards, and transactions to create consistency, choice, and convenience for consumers.
It’s the consistency of channels – ATM, branch, online, and mobile – that will define and differentiate financial institutions in an omnichannel world.
— Brian Bailey, VP of marketing and strategy, NCR Financial Services
The next 12 to 18 months will be about preparing the consumer for a new kind of ATM experience. We know the ATM is capable of dispensing much more than cash, so this year the industry will focus on making the mainstream ATM user aware of this capability.
We’ll see ATM operators enabling their units for EMV acceptance and also for NFC. We’ll see them begin to explore delivery of non-traditional values, such as prepaid cards and alternative currencies like Bitcoin. We may also see more imaginative experiences begin to take shape, such as virtual storefronts.
— Brian Scott, VP of sales, The Members Group
This year and beyond will see attention focused on branch automation for transaction migration and more robust customer experiences in a self-serve model, with the benefits of teller assistance when needed.
The ATM will continue to evolve with expanded connections to backend servers and core bank systems to increase functionality with multiple connections to the switch, teller platform, Web services, item processors, voice communication systems, and consumer warehouse information. All with stricter security on customer data as a requirement and evolving thinner client architecture.
— David Ober, technical relationship manager, Phoenix Interactive
ATM security will be a driving issue throughout 2014, especially as deadlines for PCI, Windows 7, and EMV compliance quickly approach.
Self-service terminals will require holistic ATM security suites that go beyond meeting industry regulations with trusted and secure computing platforms capable of anti-skimming and anti-fraud protection.
With the expansion and convergence of so many touch points and channels the stakes become much higher, with more vulnerability and risk. Security and protecting the data behind these transactions will be of upmost importance.
— Frank Natoli, EVP and CIO, Diebold Inc.
As banks make the transition to an omnichannel banking environment, there will be a renewed focus on leveraging the ATM channel as a marketing channel — driving promotions and campaigns to increase revenues through upsell and cross-sell opportunities. CRM integration will enable banks to segment their customer base for 1:1 targeted marketing and offers.
Operations analytics will deliver the actionable insights needed by the bank to ensure high availability of the self-service channel while delivering a consistent customer experience. Predictive analytics will facilitate enhanced service intelligence and lower mean-time-to-repair. Marketing analytics will help the banks get better insights into their customers and accelerate time to market for new products.
— Harish Bhat, president, ESQ Business Services
Thanks to the lingering effects of a sluggish economy and an intense regulatory burden, free checking is becoming harder for most consumers to access. As a result, use of self-service and fee-free banking will continue to increase.
Naturally, revenue pressure on banks will create an increase in out-of-network fees. However, leaders who harness the capabilities of data analytics may be able to provide clear-cut evidence to senior management that the opposite stance can actually have a positive impact on the bottom line.
Those networks and organizations that proactively align their innovation and pricing strategies to consumer demand for affordable self-service banking will have the greatest success in the coming months and years.
— Karan Bhalla, managing director, IQR
Cardless mobile cash access will be the single greatest disruption to the ATM industry in 2014 and beyond.
Cardless MCA allows the funded account financial institution to act as the system of record and provide direct access to payment credentials processed on their own core accounting systems.
This eliminates the interchange, fees and royalties paid to Visa and MasterCard, and increases ATM use from new funded-account sources (e.g. home equity lines of credit, personal lines of credit, brokerage and other in-house accounts) without issuing an association branded card.
— Richard Crone, CEO, Crone Consulting
Trends in ROE metrics and branch transaction volume are driving banks to reengineer their distribution strategies. This is resulting in a renewed focus on how to migrate transactions to more efficient channels and increase the use of self-service technologies. Simply put, self-service is going to need to do more, in more locations, and become completely integrated into how a bank services its customers.
For our retail clients, 2014 is shaping up to be the year we figure out EMV; what schemes, what processes, and what timelines for migration will drive a significant amount of ATM spend and effort going forward.
— Rob Evans, director of product management, Nautilus Hyosung
This will be the year of anxiety, analysis and decision-making regarding whether or not to upgrade to Windows 7 and EMV. Both issues are extremely complex and nuanced and require a tremendous investment in time and money.”
For financial institutions, 2014 will also be a key year of evaluation of branch transformation technology, a concept that could go either way in regards to customer acceptance.
— Sam M. Ditzion, CEO, Tremont Capital Group Inc.
EMV and the liability shift in 2016 will continue to be a significant focus for ISOs and IADs. Upgrades and regulatory requirements, though costly, will offer opportunities to seek out revenue generating alternatives such as surcharge free networks, branding and increased funcztionality at the ATM.
As industry consolidation continues, those ISO and IADs who can show value to their client base will be able to capture more market share.
— Steve Gernes, ISO segment manager, Elan
With EMV still on the horizon, I believe financial institutions will largely commit 2014 budgets to compliance-oriented expenses and security concerns. FIs will continue to experience ATM expenditure fatigue — the net result will be reflected in a reduction of fleet expansion initiatives, with monies primarily directed to upgrades and replacements.
With the return to a healthy marketplace in its infancy, FIs will be laser-focused on three objectives: gaining market share, eliminating branch inefficiencies and enhancing the consumer experience. Many will divert self-service budget dollars to branch transformation initiatives and will begin to implement those solutions in 2014, while simultaneously developing future 2015/2016 channel convergence strategies such as mobile and ATM.
— Terrina Rishel, president and CEO, ATM Authority
Network operators will become more interested in dynamic currency conversion this year for two reasons. First, it adds a new revenue stream. Second, it provides a sought-after service to a group of elite, savvy, globally minded consumers.
Before making the investment, however, operators will dig into the data to learn more about their users, specifically what percentage of them are international cardholders. Financial institutions along the coast, as well as hotels, restaurants, casinos and other attractions, for instance, will naturally discover a better business case for building their brand within this target consumer group.
— Terry Dooley, SVP and CIO, Shazam Network
Look to a year that births more features and products leveraging an installed base. You’ll see cash and check deposits loaded onto ATM-issued prepaid cards; services such as emergency debit card replacement will be handled by providing distressed customers with a code that will instruct the ATM dispense a temporary replacement card.
This year will also likely see the first ‘dual cash or Bitcoin’ menus and even an ATM-issued Bitcoin prepaid card. Expect to see the emergence of cashless ATMs as ATM-dispensed prepaid products grow. As the ATM becomes THE customer touch point, I expect we will see major retail and service brands striking deals with banks to provide meaningful incentives and value-based branded products directly from the ATM.
— Todd Nuttall, president and CEO, Better ATM Services
Even as some payment technology providers speak of a line-of-sight to a so-called cashless society, Federal Reserve research has shown cash usage to be resilient around the world, including the United States. Therefore, there’s every reason to believe ATMs will be equally resilient in 2014 and a vital part of the omnichannel experience consumers now demand from their financial institution.
Market research has made clear: On-premise ATMs are less convenient for consumers, who increasingly want what they want, when they want it. Therefore, a trend to watch in 2014, specific to free-of-charge ATM access, will be how banks balance consumers’ expanding expectation for cash access to be near-omnipresent with tight capital expenditure budgets.
— Tom Pierce, CMO, Cardtronics
As ISOs become more educated on EMV and its implications and start to digest the timelines, we see many opportunities for new technologies and upgrades in fleets of ATMs to take advantage of the those technologies.
Whether it’s lottery tickets, cardless transactions, PIN-less transactions, cell phone use at an ATM, etc., there are going to be new products on an ATM that have been discussed before, but will become reality this year.
These products will help increase revenue opportunities for IADs and increase the convenience to the customer. Though interchange may be decreasing and regulation increasing, the future is very bright this year — and beyond — with increased opportunities and technologies.
— Wes Dunn, VP of sales, Genmega
Source: http://www.atmmarketplace.com/article/225941/The-ATM-industry-in-2014-Beyond-the-Model-T