FintecBuzz: Why institutions should embrace an ATM as a Service approach

The following article was originally published by FintecBuzz here.

By Stuart Mackinnon, Chief Operating Officer at NCR Atleos

Why institutions should embrace an ATM as a Service approach to simplify operations, reduce costs, and deliver stronger customer experiences.

Even in an increasingly digital world, ATM networks remain a critical component of financial institutions’ channel strategies. These machines act as a crucial bridge between physical and digital banking and continue to provide access to cash and other essential financial services for customers. Plus, as the number of bank and credit union branches shrink, ATMs serve as an important touchpoint between institutions and their customers, especially as the preference for intuitive self-service options continues to skyrocket.

However, as technology, security requirements and customer expectations grow increasingly complex, ATM maintenance now requires significant resources and capital investment. As a result, banks and credit unions are reimagining their operating models. The ATM as a Service approach has emerged as an effective path forward, a comprehensive outsourcing solution in which a trusted provider offers end-to-end maintenance and management of the fleet, including everything from deployment to helpdesk support. Such consolidation eliminates the confusion and complexity often associated with managing multiple vendor and service provider relationships.

An ATMaaS strategy offers benefits on multiple fronts. First, it allows banks and credit unions to reallocate resources toward strategic and growth-focused initiatives. As institutions across the country are challenged to attract and retain ATM experts, this is especially valuable. With ATMaaS, institutions no longer must have dedicated ATM departments, freeing those staff to instead work on building customer and member relationships or other strategic imperatives.

With ATMaaS, operational complexity is significantly reduced as vendor relationships, often as many as 10 distinct contracts, are consolidated into one partnership. This streamlines more than just vendor management, but invoicing, budgeting, reporting and communication as well. There is a cost benefit here as well, as ATMaaS results in a more predictable cost structure and simpler budgeting.

Banks and credit unions that embrace ATMaaS are typically able to innovate more quickly and deliver stronger customers experiences. Because ATM providers can more swiftly introduce new innovations across their networks, institutions gain faster access to the latest features and functionality, such as cardless transactions, tailored marketing and more robust security capabilities. These advancements allow smaller institutions to keep pace with the larger players, something that has been nearly impossible in the past.

While ATMaaS does represent a comprehensive outsourcing model, it does not mean that banks and credit unions give up control of things that drive brand differentiation. By relying on their strategic ATMaaS partner to share insights on the most recent capabilities and channel trends, institutions are able to more easily curate an ATM channel that helps highlight their value proposition.

ATMaaS providers can also help institutions optimize their fleets by leveraging their expertise and evaluating ATM usage patterns. For example, maybe this information allows them to reduce more costly but underused ATMs and instead incorporate new non-deposit machines in high traffic, previously underserved areas. Such tweaks can reduce costs while maintaining or even strengthening service and support.

The technical groundwork laid during the adoption of ATMaaS can accelerate network expansion through integration with utility networks, where an institution plugs into a network of ATMs located out in the community where customers live, work and shop. This is a compelling, cost-effective way for banks and credit unions to extend their brand presence and provide more convenient, secure customer experiences.

Finally, an ATMaaS approach can fortify business continuity and disaster recovery since sound providers will maintain spare equipment that can be easily deployed during emergencies. Such efforts proved particularly impactful during the pandemic when people were avoiding face-to-face branch interactions. Plus, in areas that more frequently experience natural disasters, ATM service can be restored more quickly with ATMaaS.

In the quickly evolving financial services landscape, where efficiency, innovation and customer experience are critical, ATMaaS presents a compelling solution for banks and credit unions seeking to modernize their operations without compromising service. By simplifying network maintenance and management, reducing costs and accelerating access to new technologies, ATMaaS allows institutions to even further enhance the value of the self-service banking channel.

Stuart Mackinnon is the EVP and COO for NCR Atleos, a leader in expanding self-service financial access for financial institutions, retailers and consumers.