ATM suppliers in Asia note brisk sales despite global crisis

Consumers want more from their ATMs aside from cash.

Customer service is still a major differentiator that sets companies apart these days. Whether it's self-service or traditional assisted service, customers still want to make the most value for their money.

The same is true for banking services. Banks big and small have to innovate to offer their best services yet lest they fall by the wayside. And because it is services that they are offering, it is services that matter the most. Banks have for decades extended their traditional services beyond banking hours and days through self-service machines known as automated teller machines (ATMs). But customers are demanding more features and services.

The past year has been challenging for the ATM industry in Asia as the banking and finance sector is one of the worst hit industries by the global financial crisis. Yet, some vendors and solutions providers were able to find some opportunities to cushion the impact of the crisis since there is still room to grow in the region.

Even in the 21st century, some parts of Asia are still untouched by modern banking conveniences, such as ATMs. For some countries which have been enjoying ATM services, the service has come to evolve beyond just providing cash when it is most needed. The demanding 21st century consumer with ever growing needs has found some other uses for the ATM and ATM suppliers are responding with more creative and cost-saving solutions for the banking industry.

Major industry players such as Wincor Nixdorf, NCR and Diebold have noted brisk business last year despite the global financial crisis.

NCR scored major deals in India -- where some parts of the country still do not have ATMs – and New Zealand while Wincor Nixdorf closed deals in Southeast Asia and Hong Kong for some of its latest solutions.

NCR responded to the challenge in India by bringing in 3,800 NCR ATMs and signing up a seven-year services contract with the State Bank of India (SBI). The company said the deal announced in September involved ATM deployment, site implementation services, second line maintenance and managed services for SBI, India’s largest bank with over 15,000 ATMs deployed nationwide. NCR said 10,000 of those machines are theirs.

NCR said it is one with the India government in providing financial services to a portion of the population who are without access to banking services and other financial services such as credit.

The Reserve Bank of India, the country’s central bank, is encouraging financial institutions, banks and micro-finance institutions to provide financial services to the “unbanked population”, which represents 41 percent of the population, especially those located in rural areas.

“In India, NCR is leading the way to the next generation of customer interactions and are proactively investing in products, solutions, and partnerships to empower government, private and public sector banks, financial institutions, and micro-finance institutions (MFIs) to help in providing formal and organized banking services to all the masses,” said David Miller, NCR regional vice president for South Asia Pacific.

Aside from NCR, Wincor Nixdorf also provided ATMs to SBI last year. The deal included installing 300 multifunctional ProCash 2100xe systems and 700 ProCash 1500xe cash dispensers to SBI’s network of ATMs.

SBI said it plans to add more ATMs this year with the bulk of them in urban areas at is noticed that customers are asking for other types of self-services while those in rural areas have limited access to automated banking services.

Wincor Nixdorf also scored deals in Vietnam, Indonesia and Hong Kong. In some deals, such as with Indonesia’s Bank Danamon, the Wincor Nixdorf solutions were even able to generate revenues from the ATMs aside from offering customers convenience.

Diebold China provided 2,800 ATM machines to Industrial and Commercial Bank of China, the country’s largest bank. Diebold said the huge volume made it the No.1 in total flowshare against other competitors.

Consumer preferences

Major ATM suppliers have noted that consumers are demanding more features and services from self-service machines aside from just accessing cash when needed.

“Asia is showing strong demand for ATMs because banks recognize that customers want easier access to cash and additional services that are fast and efficient,” said Ricardos Khoury, Wincor Nixdorf regional vice president and head of banking, Asia Pacific.

Getting cash any time of the day or night through ATMs are already common services conveniences but consumers want more from these self-service machines. Industry players noted that some consumers want to extend the services of ATMs to include some services they would normally get from bank branches as well. In this case, ATMs function as mini branches, or kiosks, from where other services, such as check ordering, bills payments, can also be availed of.

Khoury noted that ATMs are a platform to provide multiple banking services in the absence of physical bank branches.

A study in India conducted by BuzzBank Market Research for NCR noted that 61 percent of respondents prefer a bank where they can do more, such as bill payment, cash and check deposit, print statements, mobile top-up, or self-service devices, such as ATMs or kiosk.

Complete solutions

With these demands, ATM suppliers are providing financial institutions a complete set of solutions for a single point of contact in order to respond quickly to consumer demands.

Wincor Nixdorf said it is taking an end-to-end approach as customers are looking for this integrated solutions. “We offer retail banks a spectrum of services that includes hardware, software and remote diagnostics (to monitor the ATM network) for better reliability, availability and serviceability,” said Khoury.

Wincor Nixdorf recently launched its Cineo family of products to help banks and retailers to automate cash processes to reduce costs, and improve security and transparency. These products are based on intelligent cassette technology which features a memory chip that recognizes the level of cash inside the cassette, and where and when the cassette was used or opened. 

The company said such technology cuts down on ATM downtime and can save as much as 20 percent in cash handling cost.

“More and more financial institutions are looking at a single point of contact to manage their entire ATM network,” said NCR’s Miller, adding that NCR’s services portfolio includes support and IT integration. “NCR improves customer support by integrating business services from multiple vendors, across multiple channels, from a single point of accountability,” he added.

Diebold said customers are looking for integrated services to outsource their ATM network. It is offering its customers the Diebold Integrated Services which allows financial institutions to meet compliance regulations, upgrade technology, integrate processes and enhance security measures through a single point of contact.

As part of its commitment to the region, which it considers as fast developing, Diebold has moved its Engineers Development Center and Software Development Center to Asia. “Movements like these enable Diebold to respond customer request in time and understand the market well,” the company said. “Only (if we) keep changing and innovating will Diebold keep the leading position.”

Other benefits of ATMs

Increasing consumer demands are also benefiting banks as the technological solutions they are implementing to please their customers are also providing them other benefits, such as cost savings, revenue generation and customer conversions.

Indonesia’s Bank Danamon, one of the country’s largest private banks, saw its fee-based transactions grow by 75 percent by pairing Wincor Nixdorf’s Direct Marketing with the ProCash 1500xe cash dispensers as well as running the software on other vendors’ hardware.

Bank Danamon worked with a global fastfood chain for a direct marketing campaign involving ATMs. ““The six-week promotion outperformed our expectations and fee-based transactions rose by 75 percent,” said Wicahyo Ratomo, executive vice president, Retail Banking at Bank Danamon. “Response to the six-week promotion was overwhelming.”

In another campaign, Bank Danamon noted a 67 percent increase in customer conversion as the Wincor Nixdorf system was able to help them target the appropriate customers for its campaign. Fee-based transactions also increased 50 to 75 percent, said Ratomo.

With Vietnam’s Techcombank, Wincor Nixdorf helped the bank improve on its security measures by using Wincor Nixdorf’s ProView software to monitor ATMs.

Khoury said Techcombank is able to reduce the total cost of ownership as ProView provides “precise and detailed information on the operating state of each terminal device, allowing problems to be quickly resolved or suspicious activity to be detected.” Remote service maintenance through electronic access can also greatly minimize maintenance cost.

In Cambodia, NCR was able to help OSK IndoChina Bank to offer a range of revenue-generating opportunities by installing the NCR SelfServ 32 ATMs, which are multifunction ATMs that offer more services such as bill payments, funds transfer and remittance, mobile phone top-up, couponing and intelligent bulk cheque and cash deposit.

Another cost-saving technology that NCR introduced is the SelfServ ATMs equipped with combined dual-roll two-sided thermal printing technology (2ST) which it deployed in BNZ, one of New Zealand’s largest financial institutions. 2ST enables businesses to print on both sides of a thermal paper receipt, reducing paper consumption by as much as 45 percent.

“Nowadays, banks are investing in technology that is able to deliver front line, customer facing technologies that improve the consumer’s experience and increase loyalty,” said NCR’s Miller. “Such technology also enables operational efficiencies, improves productivity and at the same time delivers better customer interaction and profitability.”