The recent announcement that Suncorp will be joining our rediATM network is the latest example of a financial institution adjusting to the gradual decline of cash and ATMs. Cash usage is down 22% over the past five years and ATM transactions are at a 15-year low. Against this backdrop, financial institutions are looking closely at how to manage their ATM fleets.
But while ATM usage is declining, they’re not gone yet. ATMs remain a convenient and secure way for customers to access their money, and are a more economical option than bank branches for financial institutions to maintain a physical presence. Contactless and digital payments are on the rise, but many people still like the feel of cold hard cash in their hands. So the question is: how do you balance the decline in ATM use with the existing needs of customers?
In these times, consolidation and sharing of ATM facilities is the best move for most financial institutions. It’s a good way to reduce expenditure in a declining market without exiting altogether. In the ATM industry we saw Cardtronics acquire DCPayments in October last year, adding 25,000 ATMs to its global portfolio of 225,000. Combined with the recent Suncorp announcement, there’s little doubt that more consolidation is on the horizon.
The cost of remaining relevant
Along with the constant maintenance expenses that come with owning an ATM fleet, there are some hefty and unavoidable new costs approaching in Australia.
For instance, the arrival of the next generation banknotes and their enhanced security features will necessitate a hardware upgrade. The new $10 note to be introduced later this year will mean changes for accepting deposits, while the new $50 note, coming next year, will mean dispensing hardware across the country also needs to be upgraded.
At the same time, ATM owners need to evolve their offering to remain relevant and increase the range of functions they provide. In the coming year, we will upgrade our rediATMs with new technologies that will make them more useful to customers and more valuable to financial institutions. Here are just a few of the innovations planned for the near future:
- Paperless receipts – receive your receipts via sms or email
- Contactless ATMs – rediATM will soon release contactless functionality
- Cardless cash – customers can get a code from their mobile banking app to use at selected rediATMs.
These changes, and others to come, will continue to turn ATMs into secure self-service portals that will reduce branch costs for financial institutions while providing 24/7 service to customers. Sharing your ATM network will allow you to offer innovation and balance the cost of providing points of presence across Australia.
Innovation and maintenance comes at a cost, and that investment is being made in a climate of declining ATM use. So is it worth the investment?
Why shared ATM networks are the way to go
Reducing costs is a major driving factor for joining a shared ATM network – but these agreements also benefit financial institutions in several other ways. For example:
- Providing increased ATM locations to your customers without deploying additional machines
- Setting an agreed strategic direction through established governance practice for the network, such as the rediATM Advisory Council
- Benefiting from collective knowledge and experience to guide the development of the ATM fleet and navigate the cashless world
- Ensuring your customers can access cash when and where they need it, anywhere in Australia.
Shared ATM networks are not only popular in Australia as a way to reduce costs while continuing to provide a popular service to customers. Bankdata in Denmark manages a national ATM fleet for 11 Danish banks, providing a service that not only reduces maintenance costs for financial institutions, but also maintains brand integrity via digital messaging on the machines once the customer has inserted their card. It’s another example of how a shared scheme can be the best option for financial institutions to provide this still essential service to their customers.
The trend of consolidation for ATM fleets is only just beginning. With upcoming investment necessary to maintain ATM fleets, it’s the right time for financial institutions to consider their options. Joining a shared ATM network like rediATM is the cost-effective way to reduce expenditure while maintaining essential services and points of presence for customers.
By Lauren McCormack, Senior Manager, EFT & rediATMs