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1
The ATM – More than just Cash ?
Graham McKay
Executive Director ATMIA Europe
[email protected] Graham McKayExecutive Director ATMIA Europe
2
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
[email protected] Graham McKayExecutive Director ATMIA Europe
3
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.
[email protected] Graham McKayExecutive Director ATMIA Europe
4
Agenda items for Discussion
• Current technology available
• General Impact of current technology
• Drivers focussing current ATM functions
• Potential factors impacting future ATM functions
[email protected] Graham McKayExecutive Director ATMIA Europe
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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
[email protected] Graham McKayExecutive Director ATMIA Europe
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Technology is not the problem
• Available from all main manufacturers
[email protected] Graham McKayExecutive Director ATMIA Europe
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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…….
[email protected] Graham McKayExecutive Director ATMIA Europe
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The Drivers for more than Cash
• Cost Cause & Effect
• Demand Cause & Effect
• Security Cause & Effect
[email protected] Graham McKayExecutive Director ATMIA Europe
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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
[email protected] Graham McKayExecutive Director ATMIA Europe
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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
[email protected] Graham McKayExecutive Director ATMIA Europe
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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
[email protected] Graham McKayExecutive Director ATMIA Europe
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Cash Handling Chain
ATM
S U P E R M A R K E T
[email protected] Graham McKayExecutive Director ATMIA Europe
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The Success of Bulk Cash Deposit
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Jan2005
Feb2005
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Mill
ions
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
[email protected] Graham McKayExecutive Director ATMIA Europe
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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 !!
[email protected] Graham McKayExecutive Director ATMIA Europe
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Reaching the un-banked
Prepaid Debit CardsTop up at Bank or
ATM
[email protected] Graham McKayExecutive Director ATMIA Europe
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Demand – Impacting ATM Functions
• Cause– Technology Innovation– Customer requirements– Additional Services– Globalisation– Efficiency drivers– Product Standardisation
[email protected] Graham McKayExecutive Director ATMIA Europe
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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 ?
[email protected] Graham McKayExecutive Director ATMIA Europe
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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
[email protected] Graham McKayExecutive Director ATMIA Europe
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The Success of the Kiosk
0
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Th
ou
san
ds
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
[email protected] Graham McKayExecutive Director ATMIA Europe
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New Branch Designs
….. Manned
Un-Manned ……
[email protected] Graham McKayExecutive Director ATMIA Europe
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Integration of ATM, Telephone and Kiosk
[email protected] Graham McKayExecutive Director ATMIA Europe
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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
[email protected] Graham McKayExecutive Director ATMIA Europe
23
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
[email protected] Graham McKayExecutive Director ATMIA Europe
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Security Impacting ATM Functions
• Cause– Card vulnerability– Biometrics vs PIN– National vs International– Identity fraud– Cash Target– Criminal technology
[email protected] Graham McKayExecutive Director ATMIA Europe
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0
100
200
300
400
500
600
£ 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
[email protected] Graham McKayExecutive Director ATMIA Europe
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Security Effecting ATM Functions
• Effect– Cash vs Cashless– New Card Technology– Biometrics– Mobile phone integration– Software pattern spend recognition
[email protected] Graham McKayExecutive Director ATMIA Europe
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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
[email protected] Graham McKayExecutive Director ATMIA Europe
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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
[email protected] Graham McKayExecutive Director ATMIA Europe
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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)
[email protected] Graham McKayExecutive Director ATMIA Europe
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Through the Wall ATM !
More than just cash ……..
[email protected] Graham McKayExecutive Director ATMIA Europe
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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