atm future trends 2015 - nmgprod.s3. · pdf filean opportunity, not a threat, for atm owners...

ATM Future Trends

2015

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CONTENTSPage 3 Executive Summary Branch transformation Cyberattack Mobile wallet Bitcoin

Page 8 U.S. Consumer Survey Results 1 India Consumer Survey Results

Page 37 Industry Survey Results

Page 45 Mobile technology: An opportunity, not a threat, for ATM owners Steven Rathgaber, CEO, Cardtronics

Page 48 The ticking time bomb: Interest rate rises Brendan Doyle, CEO, Cash Management Solutions

Page 50 More is better: Multilayered protection against persistent security threats Frank A. Natoli, Jr., executive vice president and chief innovation officer, Diebold, Inc.

Page 52 Legislative and regulatory predictions for the payment industry Kurt Helwig, president and CEO, Electronic Funds Transfer Association

Page 55 The future of ATM technology Mike Lee, CEO, ATMIA

Page 58 ATM future trends report offers macro, micro market insights Vincenzo Fiore, CEO, Auriga

Page 60 Trends reflect IADs’ and FIs’ need to keep abreast of market demands Andy Orent, CEO, Nautilus Hyosung

Page 63 Taking action around the ‘branch of the future’ Brian Bailey, vice president of marketing and strategy, NCR Financial Services

Page 66 Bold (and not so bold) predictions for the future of retail ATM Daryl Cornell, CEO, Triton Systems

Page 68 Connecting with customers through ATM innovation Alicia Moore, head of Wells Fargo ATM Banking

Page 70 ATM trends in mature and emerging markets Leland Englebardt, group head of network solutions, MasterCard

Page 72 About the sponsors

ATM Future Trends 2015 © 2015 Networld Media Group. 13100 Eastpoint Park Blvd., Louisville KY 40223. (502) 241-7545All rights reserved. No part of this publication may be reproduced without the express written approval of the publisher. Viewpoints of the contributors and editors are their own and do not necessarily represent the viewpoints of the publisher.

Tiffany Smith, custom content [email protected]

James Bickers, editorial [email protected]

Suzanne Cluckey, senior editor, ATM [email protected]

Alan Fryrear, chairman [email protected]

Tom Harper, president & [email protected]

Kathy Doyle, executive vice president and [email protected]

mailto:[email protected]





Welcome to ATM Marketplace ATM Future Trends 2015, a tri-annual look at the competitive, economic and technologic forces shaping (or you might say reshaping) the ATM industry.

We’re pleased to have the sponsorship of Auriga behind this, our fourth edition of the guide, which allows us to make a valuable resource available industry-wide at no cost.

We’re also pleased to incorporate end-user opinions into the report for the first time with the inclusion of consumer data from two polls: one in the ma-ture North American market and one in the fast-developing Indian market.

In some cases, we found consumer sentiment in both markets to be remarkably similar:

Suzanne Cluckeyeditor, ATM Marketplace

EXECUTIVE SUMMARY

How important is it to you to have access to a fee-free ATM?

48% 37%

11% 2% 3%

Essential Very important Somewhat important

Not that important

I don't care

48% 41%

8% 3% 0%


Not that important

I don't care

Indian consumers

US consumers


And in other cases, strikingly divergent:

Is it more important to you to have an ATM nearby, or a branch nearby?

ATM

43%

Branch

47%

Neither, I do my banking online

8%

Neither, I do my banking using a mobile app

2%

US consumers

Consumers

Indian consumers


Neither, I do my banking using a mobile app1%

ATM 82%

Branch 9%

8%

We also found that the expectations and objectives of consumers and providers don’t always stack up the same way:

In five years, which of the following will be the most popular trend in serving cash-preferred consumers?

Offering prepaid-card dispense at the ATM

or other self-service channel

Reaching out to “digital natives,” those who grew up with digital and mobile technology

FIs, independent deployers and retailers partnering to reach unbanked and underbanked consumers

Advanced self-service solutions, such as bill payment and check cashing

Deploying solutions that integrate mobile-banking and marketing with the self-service channel

5%

12%

13%

18%

52%


Providers

Which of the following services would you most like to see at the ATM? (please select three)

Virtual currency exchange (i.e. Bitcoin, Altcoin, Dogecoin, etc.) 19%

Personal preference setup (withdrawal amounts, balance display, etc.) 39%

Real-time transactions (e.g. instant credit to account on deposits) 46%

21% Event ticket sales

26% Email receipt

27% Prepaid card sales

33% Cardless cash withdrawal using mobile app

42% Check cashing at the ATM

56% Cash withdrawals in multiple denominations

61% Bill payment at the ATM

We hope that, in providing these types of insights, ATM Future Trends 2015 will serve as one more useful tool in the box as you work to formulate a business strategy that is sound, durable and responsive to consumer pref-erences and the rapid pace of change in digital financial services.

To understand the importance of this in today’s market, simply consider these current topics that were, at most, faint blips on the radar when we published the ATM Future Trends Report 2012:

Branch transformation This trend was only beginning to emerge in 2012, and received only a passing mention in that year’s report. The “reinvented branch” has gained momentum steadily in the past three years and is now at the center of the discussion about the future of retail banking.

This self-service model has been propelled by the development of ad-vanced hardware — teller cash recyclers, video teller machines, cash-


recycling ATMs — and the sophisticated software that not only drives them, but also serves as link to tablet-equipped staff no longer tied to a teller desk and computer monitor.

FIs are seeing this new technology as a way to reduce the branch footprint, realize cost-efficiencies in staffing and operations, and redirect staff time from teller functions that create cost to sales functions that generate rev-enue and reinforce customer loyalty.

Cyberattack In the 2012 report, two-thirds of ATM deployers named ATM security/regula-tory compliance as their No. 1 trending concern. But criminals have since demonstrated that advanced security devices and regulatory compliance are not the whole answer.

This has been underscored by an increase in ATM cashing-out or “jackpot-ting.” There are several variants on this type of attack, but the common denominator is the introduction of undetectable malware onto a machine via physical access to its hard drive. This allows the criminal to send cash-dispense commands, emptying the machine’s vault.

In another computer exploit, cybercriminals stole masses of prepaid card numbers from a provider’s database and, further, removed the spending limits on those cards. A coordinated global ATM cash-out using counterfeit cards netted the well-organized gang $47 million.

Mobile wallet By 2009, financial institutions were seriously considering the potential in mobile banking. In that year’s future trends report, 35 percent of respon-dents said that “deploying solutions that integrate mobile banking and marketing with the self-service channel” would be the most popular trend over the next five years. At the time, though, there was little certainty about just how this might work.

By 2012, the notion of prestaging a cash withdrawal through a banking app was just dawning on ATM operators — and so was the realization that a virtual debit card could move from said banking app into a mobile wallet, risking disintermediation between bank and customer if that wallet carried another provider’s brand.


BitcoinIntroduced in 2009, the cryptocurrency was a non-issue for the financial services industry three years ago. In fact, the terms “bitcoin,” and “crypto-currency” did not appear in the 2012 report at all.

At that time, we had no bitcoin ATMs, no foreign remittances via virtual currency, no questions about government regulation of a problematically anonymous payment instrument — unless you meant cash.

Now we have all of these things — and the questions that go with them. Will bitcoin replace cash? Improbable. Should ATM deployers consider adding bitcoin functionality to their fleet, or alternatively, investing in bitcoin ATMs?

Perhaps we’ll have an answer for that by the time we get to the 2018 re-port. And, we hope, we’ll see how well the trends indicated in the 2015 end up serving the interests of the ATM industry — and its end user.

8U.S. CONSUMER SURVEY RESULTS ATM FUTURE TRENDS 2015

1. What is your age?

U.S. CONSUMER SURVEY RESULTSNote: Not all data will add up to 100% due to rounding

18-24 15%

25-34 25%

35-44 26%

45-54 20%

55-64 14%

65 and over 1%

2. Where are you?

3. What is your gender?

51% 49%

Less than $25,000

23%

$25,000 - $50,000 31%

$50,001 - $75,000

21%

$75,001 - $100,000

12%

$100,001 - $150,000 10%

Over $150,000 3%

4. What is your annual household income?

100%US


5. Which of the following services would you most like to see at the ATM? (please select three)

25-3418-24 35-44 45-54 55-64

30%

21%

17%

24%

31%

57%

30%

22%

27%

54%

15%

13%

5%

17%

25%

38%

32%

17%

25%

64%

19%

20%

16%

19%

30%

55%

46%

23%

29%

71%

17%

23%

11%

24%

31%

37%

45%

25%

35%

66%

8%

9%

4%

6%

18%

36%

23%

19%

22%

62%

BY AGE GROUP

Prepaid card sales

Event ticket sales

Virtual currency exchange (i.e. Bitcoin, Altcoin, Dogecoin, etc.)

Cardless cash withdrawal using mobile app

Bill payment at the ATM

Check cashing at the ATM

Real-time transactions (e.g. instant credit to account on deposits)

Personal preference setup (withdrawal amounts, balance display, etc.)

Email receipt

Cash withdrawals in multiple denominations (not just $20 bills)

64%

44%

38%

28%

28%

22%

19%

18%

18%

11%

Prepaid card sales




Email receipt




Event ticket sales




$25-50K

MALE

(continued)

< $25K

FEMALE

$50-75K $75-100K $100-150K > $150K

20%

18%

9%

12%

30%

47%

30%

19%

27%

62%

11%

16%

7%

13%

27%

45%

39%

21%

26%

73%

19%

25%

18%

23%

26%

44%

38%

17%

28%

60%

19%

23%

8%

21%

40%

51%

38%

23%

17%

51%

15%

14%

8%

16%

26%

46%

43%

22%

29%

74%

25%

20%

15%

24%

28%

44%

36%

22%

31%

55%

17%

17%

13%

28%

25%

36%

38%

32%

38%

62%

13%

0%

6%

25%

6%

19%

31%

25%

38%

56%

BY HOUSEHOLD INCOME

BY GENDER

Prepaid card sales

Event ticket sales







Email receipt


Prepaid card sales

Event ticket sales







Email receipt



MALEFEMALE

6. Are you carrying more or less cash these days?

25-3418-24 35-44 45-54 55-64

11%

51%

32%

6%

7%

59%

28%

6%

9%

54%

31%

7%

13%

50%

32%

5%

10%

58%

30%

2%

14%

50%

33%

4%

11%

54%

28%

6%

15%

52%

28%

5%

10%

58%

29%

4%

15%

39%

36%

10%

10%

42%

42%

5%

13%

38%

43%

6%

6%

31%

50%

13%

BY AGE GROUP

More

Less

About the same

I never carry cash

More

Less

About the same

I never carry cash

More

Less

About the same

I never carry cash

11%

52% 32%

5%

More Less About the same I never carry cash

BY HOUSEHOLD INCOME$25-50K< $25K $50-75K $75-100K $100-150K > $150K

BY GENDER


7. Are you making more purchases with cash due to data breaches at stores?

25-3418-24 35-44 45-54 55-64

42%

58%

39%

61%

34%

66%

33%

67%

30%

70%

36%

64%

38%

62%

38%

62%

30%

71%

26%

74%

19%

81%

BY AGE GROUP

YES

NO

YES

NO


BY GENDER

Yes 34%

No 66%

29% 40% 71%

61%


8. If breaches continue or get worse, how likely are you to switch to cash?

MALEFEMALE

25-3418-24 35-44 45-54 55-64

31%

35%

26%

9%

27%

34%

26%

13%

21%

36%

30%

13%

26%

33%

30%

11%

21%

37%

28%

14%

24%

31%

28%

17%

16%

35%

30%

20%

25%

29%

29%

17%

20%

35%

32%

12%

22%

35%

39%

4%

19%

31%

26%

24%

11%

34%

34%

21%

13%

19%

19%

50%

BY AGE GROUP

I definitely will switch for all but the most expensive purchases

I’ll use cash more often, but mostly for smaller purchases

I’ll start thinking about it very seriously

I’ll still use cards; my bank covers any fraud, so it doesn’t really affect me










BY GENDER





22% 15% 22%

34%

34%

29%

15% 29%


9. How important is it to you to have access to a fee-free ATM?

MALEFEMALE

25-3418-24 35-44 45-54 55-64

49%

27%

16%

3%

5%

49%

35%

11%

1%

5%

54%

34%

9%

1%

2%

51%

36%

8%

2%

3%

47%

37%

10%

3%

3%

41%

39%

12%

3%

4%

48%

41%

10%

0%

1%

50%

37%

10%

1%

2%

47%

41%

10%

1%

2%

52%

36%

10%

1%

0%

40%

33%

14%

6%

6%

38%

47%

13%

0%

2%

38%

13%

25%

13%

13%

BY AGE GROUP

Essential

Very important

Somewhat important

Not that important

I don’t care

Essential

Very important

Somewhat important

Not that important

I don’t care

Essential

Very important

Somewhat important

Not that important

I don’t care


BY GENDER

48% 37%

11% 2% 3%


Not that important

I don't care


10. If you had the option to go to a teller window or do the same transaction at a drive-up video ATM with a remote teller, which would you choose?

BY GENDER

25-3418-24 35-44 45-54 55-64

70%

30%

70%

30%

55%

45%

63%

37%

61%

39%

65%

35%

66%

34%

62%

38%

73%

27%

57%

43%

25%

75%

BY AGE GROUP

Bank branch

Video teller

Bank branch

Video teller


Bank branch

63%

Video teller

37%

63% 64% 37% 37%


11. Do you worry about someone using a skimming device to steal your card information and PIN when you’re using the ATM?

MALEFEMALE

25-3418-24 35-44 45-54 55-64

40%

46%

7%

7%

38%

46%

8%

9%

37%

46%

11%

5%

44%

43%

9%

4%

42%

48%

7%

3%

30%

53%

15%

2%

25%

50%

13%

13%

37%

47%

11%

5%

34%

50%

9%

7%

40%

46%

9%

6%

37%

46%

13%

4%

43%

46%

5%

5%

40%

42%

14%

4%

BY AGE GROUP

Yes, I’m very concerned about it

I’m aware of the possibility, but not that concerned

I never even think about it

What’s a skimming device?










BY GENDER





38%

46%

10% 5%


51%

36%

13%

53%

38%

10%

Very important; I don’t want to have to go out of my way to get cash

Sort of important; I don’t mind going a little out of my way

Doesn’t matter; I never use the ATM anyhow

12. How important is it to you to have an ATM available nearby for cash access?

MALEFEMALE

50%

33%

17%

56%

34%

10%

55%

35%

9%

54%

41%

6%

43%

51%

6%

25%

38%

38%

BY AGE GROUP




43%

47%

10%

54%

37%

9%

57%

34%

9%

58%

36%

6%

40%

31%

30%





BY GENDER

25-3418-24 35-44 45-54 55-64



Doesn’t matter; I never use the ATM anyhow52% 37%

11%


8%

52%

20%

21%

11%

61%

15%

13%

Too many ATMs

Enough ATMs

Not enough ATMs

Not enough ATMs that can do more than just dispense cash

13. Does the US have:

MALEFEMALE

25-3418-24 35-44 45-54 55-64

9%

43%

21%

26%

9%

58%

15%

19%

9%

49%

24%

19%

11%

59%

18%

12%

4%

62%

13%

21%

18%

58%

13%

12%

9%

61%

16%

15%

11%

54%

18%

17%

4%

70%

17%

9%

9%

66%

11%

13%

25%

50%

19%

6%

BY AGE GROUP

Too many ATMs

Enough ATMs

Not enough ATMs


Too many ATMs

Enough ATMs

Not enough ATMs



BY GENDER

9%

57%

17% 17%

Too many ATMs Enough ATMs Not enough ATMs Not enough ATMs that can do more than just dispense cash


14. Do you think an EMV smart card (an ATM card with a computer chip in it) will make your ATM transactions more secure?

MALEFEMALE

25-3418-24 35-44 45-54 55-64

16%

20%

25%

16%

24%

12%

36%

21%

14%

17%

15%

41%

26%

12%

7%

9%

42%

26%

6%

17%

6%

38%

25%

0%

31%

18%

27%

18%

19%

19%

15%

27%

26%

20%

12%

16%

30%

26%

17%

11%

13%

36%

27%

12%

13%

11%

40%

21%

14%

14%

13%

30%

20%

17%

19%

14%

36%

25%

13%

11%

14%

39%

9%

17%

22%

BY AGE GROUP

It will make them absolutely secure

It will help a lot

It will help some

It won’t make much difference; criminals will find a way to defeat the technology

I don’t know what that is


It will help a lot

It will help some




It will help a lot

It will help some




BY GENDER


14%

It will help a lot

33% It will help some

23%

It won't make much difference; criminals

defeat the technology

15%

I don't know what that is

15%


15. Is it more important to you to have an ATM nearby, or a branch nearby?

MALEFEMALE

25-3418-24 35-44 45-54 55-64

46%

41%

9%

5%

42%

43%

11%

4%

43%

47%

7%

2%

44%

51%

4%

0%

46%

44%

9%

1%

38%

53%

9%

0%

38%

31%

13%

19%

42%

48%

8%

3%

51%

38%

8%

3%

44%

46%

8%

2%

48%

44%

5%

4%

33%

59%

8%

0%

31%

56%

13%

0%

BY AGE GROUP

ATM

Branch



ATM

Branch



ATM

Branch




BY GENDER

ATM

43%

Branch

47%


8%


2%

21INDIA CONSUMER SURVEY RESULTS ATM FUTURE TRENDS 2015

1. What is your age?

INDIA CONSUMER SURVEY RESULTSNote: Not all data will add up to 100% due to rounding

2. Where are you?

3. What is your gender? 4. What is your annual household income?

18-24 17%

25-34 19%

35-44 38%

45-54 13%

55-64 13%

100%India

52% 49%

Less than 15,000 INR

7% 15,001 - 30,000 INR

5% 30,001 - 50,000 INR

6% 50,001 - 70,000 INR

7%

70,001 - 100,000 INR

11% 100,001 -

150,000 INR

15%

More than 150,000 INR

50%


MALEFEMALE

5. Are you carrying more or less cash these days?

25-3418-24 35-44 45-54 55-64

14%

52%

26%

7%

6%

53%

24%

18%

20%

52%

24%

4%

25%

50%

22%

3%

4%

71%

25%

0%

17%

57%

23%

4%

19%

60%

19%

3%

10%

60%

23%

7%

18%

48%

31%

3%

14%

54%

26%

6%

14%

56%

25%

5%

37%

44%

19%

0%

23%

49%

24%

4%

18%

57%

23%

2%

BY AGE GROUP

More

Less

About the same

I never carry cash

More

Less

About the same

I never carry cash

More

Less

About the same

I never carry cash

BY HOUSEHOLD INCOME15,001-30,000< 15,000 INR 30,001-50,000 50,001-70,000 70,001-100,000 100,001-150,000 >150,000 INR

BY GENDER

19%

55%

23%

4%

More Less About the same I never carry cash


74%

18%

6%

3%

92%

4%

4%

0%

60%

27%

10%

3%

83%

6%

11%

0%

86%

11%

2%

2%

87%

4%

10%

0%

83%

8%

9%

1%

15,001-30,000

30,001-50,000

50,001-70,000

70,001-100,000

100,001-150,000

6. Is it more important to you to have an ATM nearby, or a branch nearby?

MALEFEMALE

25-3418-24 35-44 45-54 55-64

79%

7%

12%

2%

82%

10%

7%

1%

86%

4%

10%

0%

82%

8%

9%

1%

86%

9%

4%

1%

78%

12%

10%

0%

77%

16%

8%

0%

BY AGE GROUP

ATM

Branch



ATM

Branch



ATM

Branch



BY HOUSEHOLD INCOME

BY GENDER


Neither, I do my banking using a mobile app1%

ATM 82%

Branch 9%

8%

Less than15,000 INR

More than150,000 INR


65%

35%

63%

38%

63%

37%

57%

43%

68%

32%

54%

46%

38%

62%

15,001-30,000

30,001-50,000

50,001-70,000

70,001-100,000

100,001-150,000

7. If you had the option to go to a teller window or do the same transaction at a drive-up video ATM with a remote teller, which would you choose?

BY GENDER

25-3418-24 35-44 45-54 55-64

54%

46%

58%

42%

48%

52%

42%

58%

45%

55%

BY AGE GROUP

Bank branch

Video teller

Bank branch

Video teller

BY HOUSEHOLD INCOME

51% 49% 51% 49%

Bank branch

50% Video teller

50%

Less than15,000 INR



38%

41%

21%

57%

32%

11%

59%

35%

6%

62%

32%

7%

45%

49%

6%

41%

50%

9%

63%

25%

13%

57%

43%

0%

51%

34%

14%

65%

30%

5%

68%

28%

4%

52%

41%

7%

15,001-30,000

30,001-50,000

50,001-70,000

70,001-100,000

100,001-150,000

8. Complete the following sentence: The ATM I use is ...

MALEFEMALE

25-3418-24 35-44 45-54 55-64

56%

36%

9%

55%

38%

7%

BY AGE GROUP

Always operable and stocked with cash

Usually operable and stocked with cash

Often inoperable or out of cash







BY HOUSEHOLD INCOME

BY GENDER

Always operable and stocked

with cash

55% Usually operable

and stocked with cash

37%


8%

Less than15,000 INR



27%

62%

12%

29%

64%

7%

32%

66%

2%

27%

66%

7%

25%

70%

5%

19%

77%

5%

38%

58%

4%

30%

57%

13%

29%

63%

9%

28%

72%

0%

32%

65%

3%

24%

71%

5%

15,001-30,000

Less than15,000 INR

30,001-50,000

50,001-70,000

70,001-100,000

100,001-150,000


9. How physically safe do you feel when you use the ATM to get cash?

MALEFEMALE

25-3418-24 35-44 45-54 55-64

25%

69%

6%

29%

67%

5%

BY AGE GROUP

Very; I don’t worry about my physical safety at all

Mostly safe, but I definitely keep a lookout

Not very safe at all; I often worry about being physically assaulted and robbed







BY HOUSEHOLD INCOME

BY GENDER

27%

68%

5%

Very; I don't worry about my physical

safety at all

Not very safe at all; I often worry about

being physically assaulted and robbed


70%

23%

45%

67%

35%

67%

33%

48%

73%

58%

74%

46%

59%

73%

60%

60%

40%

52%

74%

68%

50%

25%

52%

75%

58%

Having a young and capable guard on duty

Adding more or better lighting

Mirrors on the ATM so that I can see what’s going on behind me

A working video camera at the ATM

Having the ATM in a location that’s clearly visible to passers-by, thus scaring off any miscreants

10. What would make you feel safer using the ATM? (select all that apply)

25-3418-24 35-44 45-54 55-64BY AGE GROUP

68%

20%

40%

68%

48%

60%

33%

60%

67%

53%

57%

33%

57%

76%

43%

56%

24%

64%

68%

64%

61%

34%

46%

63%

27%

74%

34%

46%

70%

52%

69%

41%

54%

76%

65%

15,001-30,000

Less than15,000 INR

30,001-50,000

50,001-70,000

70,001-100,000

100,001-150,000







BY HOUSEHOLD INCOME

Having the ATM in a location that's clearly visible to passers-by, thus scaring off any miscreants




67%

36%

52% 72% 56%

Mirrors on the ATM so that I can see what's going on behind me


64%

37%

57%

74%

56%

70%

35%

48%

71%

56%

10. What would make you feel safer using the ATM? (select all that apply)

MALEFEMALE






BY GENDER

(continued)


11. How important is it to you to have access to a fee-free ATM?

MALEFEMALE

25-3418-24 35-44 45-54 55-64

37%

52%

10%

1%

0%

35%

41%

21%

3%

0%

52%

38%

9%

2%

0%

54%

35%

8%

1%

2%

29%

50%

17%

4%

0%

45%

44%

7%

3%

1%

53%

38%

7%

3%

0%

53%

37%

7%

3%

0%

46%

45%

6%

3%

0%

43%

43%

9%

6%

0%

42%

41%

9%

8%

0%

37%

54%

7%

0%

2%

50%

39%

7%

4%

0%

64%

34%

3%

0%

0%

BY AGE GROUP

Essential

Very important

Somewhat important

Not that important

I don’t care

Essential

Very important

Somewhat important

Not that important

I don’t care

Essential

Very important

Somewhat important

Not that important

I don’t care

BY HOUSEHOLD INCOME

BY GENDER

48% 41%

8% 3% 0%


Not that important

I don't care

15,001-30,000

Less than15,000 INR

30,001-50,000

50,001-70,000

70,001-100,000

100,001-150,000



12. When you use the ATM, how long would you estimate that you have to wait in line?

13. Would you say that this is:

25-3418-24 35-44 45-54 55-64

57%

41%

2%

62%

32%

6%

62%

29%

9%

63%

38%

0%

65%

24%

11%

70%

27%

3%

64%

28%

8%

71%

26%

3%

75%

20%

5%

53%

28%

19%

65%

28%

8%

66%

26%

8%

BY AGE GROUP

Not too much time

More time than I’d like, but I can live with it

Much too much time

Not too much time


Much too much time

BY HOUSEHOLD INCOME

MALEFEMALE

64%

28%

9%

65%

28%

7%

Not too much time


Much too much time

BY GENDER

15,001-30,000

Less than15,000 INR

30,001-50,000

50,001-70,000

70,001-100,000

100,001-150,000


Not too much time

64%

More timethan I’d like,

but I canlive with it

28%

Much too much time

8%

6%

No wait

18%

1-2 minutes

47%

3-5 minutes

22%

6-10 minutes

5%

11-15 minutes

2%

16-30 minutes

0%

More than30 minutes


58%

29%

6%

7%

68%

24%

5%

3%

69%

26%

4%

2%

63%

31%

3%

3%

53%

44%

2%

2%

14. Do you worry about criminals stealing your card data and PIN by installing a “card skimming device” on the ATM?

25-3418-24 35-44 45-54 55-64BY AGE GROUP

32%

35%

12%

21%

54%

25%

21%

0%

70%

27%

3%

0%

74%

26%

0%

0%

75%

25%

0%

0%

70%

23%

1%

5%

63%

32%

4%

2%

15,001-30,000

Less than15,000 INR

30,001-50,000

50,001-70,000

70,001-100,000

100,001-150,000










BY HOUSEHOLD INCOME

Yes, I'm very concerned about it

64%

I'm aware of the possibility,

but not that concerned

29%


4%

What's askimming device?

3%

68%

28%

2%

2%

61%

30%

6%

3%

MALEFEMALEBY GENDER






15. Do you think an EMV smart card (an ATM card with a computer chip in it) will make your ATM transactions more secure?

MALEFEMALE

25-3418-24 35-44 45-54 55-64

30%

39%

17%

2%

12%

33%

42%

8%

4%

13%

31%

46%

3%

9%

11%

39%

40%

14%

2%

5%

50%

34%

5%

8%

3%

37%

45%

7%

4%

7%

29%

32%

9%

9%

21%

47%

40%

10%

0%

3%

49%

32%

8%

6%

5%

40%

42%

7%

4%

7%

37%

48%

2%

6%

8%

44%

38%

7%

5%

7%

33%

45%

9%

5%

8%

30%

55%

2%

8%

6%

BY AGE GROUP


It will help a lot

It will help some




It will help a lot

It will help some




It will help a lot

It will help some



BY HOUSEHOLD INCOME

BY GENDER

It won't make much difference; criminals

defeat the technology

38%

42%

It will help some 8%

8% 5%

I don't know what that is


It will help a lot

15,001-30,000

Less than15,000 INR

30,001-50,000

50,001-70,000

70,001-100,000

100,001-150,000




25-3418-24 35-44 45-54 55-64

33%

19%

20%

33%

50%

35%

32%

32%

31%

42%

18%

15%

9%

33%

61%

48%

58%

46%

22%

67%

34%

26%

26%

35%

67%

38%

44%

31%

30%

51%

27%

21%

22%

31%

62%

46%

47%

40%

25%

59%

22%

20%

8%

36%

64%

42%

50%

48%

20%

59%

BY AGE GROUP

Prepaid card sales

Event ticket sales







Email receipt

Cash withdrawals in multiple denominations

Virtual currency exchange (i.e. Bitcoin, Altcoin, Dogecoin, etc.) 19%

Personal preference setup (withdrawal amounts, balance display, etc.) 39%

Real-time transactions (e.g. instant credit to account on deposits) 46%

21% Event ticket sales

26% Email receipt

27% Prepaid card sales

33% Cardless cash withdrawal using mobile app

42% Check cashing at the ATM

56% Cash withdrawals in multiple denominations

61% Bill payment at the ATM



MALE

(continued)

FEMALE

21%

12%

9%

32%

50%

24%

27%

24%

24%

32%

23%

19%

19%

31%

66%

48%

47%

38%

27%

58%

17%

17%

17%

30%

50%

47%

30%

23%

23%

60%

44%

35%

23%

32%

60%

56%

33%

33%

19%

49%

33%

13%

8%

17%

46%

38%

17%

17%

29%

29%

32%

22%

18%

35%

57%

37%

44%

40%

25%

53%

26%

23%

26%

43%

46%

34%

54%

40%

20%

51%

28%

19%

19%

30%

60%

37%

37%

35%

19%

46%

25%

20%

19%

35%

69%

44%

57%

47%

30%

66%

BY HOUSEHOLD INCOME

BY GENDER

Prepaid card sales

Event ticket sales







Email receipt


Prepaid card sales

Event ticket sales







Email receipt


15,001-30,000

Less than15,000 INR

30,001-50,000

50,001-70,000

70,001-100,000

100,001-150,000



17. Please choose the number of times you visit each of these in an average month.

1-3

1-3

1-3

1-3

1-3

4-6

4-6

4-6

4-6

4-6

7-10

7-10

7-10

7-10

7-10

More than 10

More than 10

More than 10

More than 10

More than 10

Zero visits

Zero visits

Zero visits

Zero visits

Zero visits

17%

1%

16%

1%

16%

7%

20%

0%

20%

0%

74%

22%

68%

20%

77%

34%

70%

24%

75%

32%

5%

28%

10%

36%

3%

33%

3%

26%

3%

41%

2%

28%

4%

28%

2%

21%

3%

26%

2%

20%

2%

22%

2%

16%

3%

5%

4%

25%

0%

8%

BY AGE GROUP

Bank branch

ATM

Bank branch

ATM

Bank branch

ATM

Bank branch

ATM

Bank branch

ATM

Age 18-24

Age 35-44

Age 55-64

Age 25-34

Age 45-54

ATM

Zero visits1%

24%

33%

25%

16% 1-3

More than 10Zero visits

17%

1-3

4-6

4-6

7-10

7-10 More than 10

Bank Branch

71%

6%

3% 2%


17. Please choose the number of times you visit each of these in an average month.

1-3

1-3

1-3

1-3

1-3

1-3

1-3

1-3

1-3

4-6

4-6

4-6

4-6

4-6

4-6

4-6

4-6

4-6

7-10

7-10

7-10

7-10

7-10

7-10

7-10

7-10

7-10

More than 10

More than 10

More than 10

More than 10

More than 10

More than 10

More than 10

More than 10

More than 10

Zero visits

Zero visits

Zero visits

Zero visits

Zero visits

Zero visits

Zero visits

Zero visits

Zero visits

18%

12%

10%

0%

7%

0%

17%

2%

20%

0%

10%

0%

17%

1%

29%

4%

26%

0%

65%

39%

69%

30%

78%

24%

73%

27%

71%

21%

81%

20%

70%

22%

50%

29%

69%

32%

6%

30%

10%

20%

9%

38%

8%

36%

5%

35%

7%

27%

5%

30%

13%

46%

3%

27%

3%

3%

7%

23%

6%

26%

2%

22%

3%

27%

3%

31%

4%

29%

0%

13%

0%

32%

9%

15%

3%

27%

0%

13%

1%

14%

2%

16%

0%

22%

4%

19%

8%

8%

3%

9%

Bank branch

ATM

Bank branch

ATM

Bank branch

ATM

Bank branch

ATM

Bank branch

ATM

Bank branch

ATM

Bank branch

ATM

Bank branch

ATM

Bank branch

ATM

Less than 15,000 INR

30,001- 50,000 INR

70,001-100,000 INR

Female Male

More than 150,000 INR

100,001-150,000 INR

15,001- 30,000 INR

50,001- 70,000 INR

BY HOUSEHOLD INCOME

BY GENDER

(continued)

INDUSTRY SURVEY RESULTS ATM FUTURE TRENDS 2015 37

1. What is your industry segment?

INDUSTRY SURVEY RESULTS

2. In which region is your company based?

FI, less than $500 million in assets

FI, $500 million to $1 billion in assets

FI, $1 billion to $500 billion in assets

IAD deploying 1 to 25 ATMs




IAD deploying more than 1500 ATMs

Processor

EFT network

ATM manufacturer

ATM parts provider

ATM service company

ATM software provider

Consultant

Other

10%7%

19%4%2%3%5%6%6%3%

13%4%1%2%3%

13%

10% 7%

19%

4%

2% 3%

4% 6% 6%

3%

13%

5%

1%

3% 2% 13%

North America45%

Asia Pacific

18%

Western Europe

12%

Central/Eastern Europe9%

South America

5%

2% Africa4%

4%Middle East

Central America


3. What is your position?

4. Over the next five years, which of the following do you believe will have the greatest impact on the global ATM industry?

17%

15%

12%

12%

11%

7%

7%

6%

6%

5%3%

Mid-level manager

Senior-level manager

Senior-level executive

Mid-level executive

IT professional

Owner/operator

Project manager

CEO

Consultant

Other

Entry-level employee

Mobile technology

Branch transformation

Cash recycling

Interchange reduction

More technology/equipment to protect cardholder PINs

Government regulations

Other (please specify)

Changes to ATM surcharges

Self-service software upgrades and patches

Working with outside vendors on PCI compliance standards, such as the Data Security Standard

Virtual currencies

Movement of ATMs to virtual private networks (VPNs)

Deployment of more Windows-based ATMs

46%15%10%5%4%4%4%3%2%

2%

2%2%1%

46%

15%

10%

5%

4%

4% 4%

3%

2% 2% 2% 2% 1%

Other includes: EMV, multivendor software


5. In five years, which of the following will be the most popular trend in serving cash-preferred consumers?

6. In the next five years, what do you see as the top three threats facing the ATM industry in your region?

Offering prepaid-card dispense at the ATM or other self-service channel

Reaching out to “digital natives,” those who grew up with digital and mobile technology

FIs, independent deployers and retailers partnering to reach unbanked and underbanked consumers

Advanced self-service solutions, such as bill payment and check cashing

Deploying solutions that integrate mobile-banking and marketing with the self-service channel

5%

12%

13%

18%

52%

Other includes: Apply Pay, prepaid cards, decline in interchange fees, loss of consumer confidence

17%

13%

9%

8%

5%

5%

4%

3%

3%

2%

2%

2%

26%

Security/fraud/data breaches

Mobile banking

Cost of ownership

Government regulations

Virtual currencies

ATM attacks/robbery

Technology advancements and costs

Cashless transactions

EMV - slow upgrade

Competition

Lack of innovation

Online transactions

Other


7. Do you see the regulatory environment as predominantly positive for the continued growth of the ATM industry?

8. In the NORTH AMERICAN ATM market, what are the three ATM industry trends most likely to impact the market over the next five years? (choose three)

Other includes: Self-service technology, saturation of market

Yes 51%

No 49%

North America

4%

11%

13%

15%

15%

22%

25%

39%

40%

57%

67%

Other

Open software architecture

Supplier adoption of new technologies/functionality

Industry consolidation

Deposit imaging at the ATM

Video banking/remote teller technology

Cash Recycling

Security standards and other compliance issues

Branch transformation with self-service or interactive banking machine emphasis

Mobile integration

Mag-stripe to EMV chip conversions


9. In the EUROPEAN ATM market, what are the three ATM industry trends most likely to impact the market over the next five years? (choose three)

10. In the ASIAN ATM market, what are the three ATM industry trends most likely to impact the market over the next five years? (choose three)

Other includes: Currency exchange, multivendor solutions

Other includes: Increased market saturation

Europe

Asia

Branch transformation with self-service or interactive banking machine emphasis 41%

6% Other

14% Uniform hardware guidelines and compliance

19% Open software architecture

20% Supplier adoption of new technologies/functionality

20% Video banking/remote teller technology

26% Outsourcing of ATM networks

28% Cost reduction

34% Cash-in and recycling at the ATM

39% Security/EMV

60% Mobile integration

Branch transformation with self-service or interactive banking machine emphasis 32%

5% Other




28% Cost reduction

30% The emergence of IADs


51% Security/EMV



11. In the MIDDLE EASTERN ATM market, what are the three ATM industry trends most likely to impact the market over the next five years? (choose three)

12. In the AFRICAN ATM market, what are the three ATM industry trends most likely to impact the market over the next five years? (choose three)

Other includes: Lower energy consumption ATMs, oppressive business models

Middle Eastern

African

Branch transformation with self-service orinteractive banking machine emphasis 30%

3% Other



25% Cost reduction




60% Security/EMV


Branch transformation with self-service orinteractive banking machine emphasis 21%

8% Other






40% Cost reduction


60% Security/EMV


13. In five years, what region or country will be considered the most popular deployment market in terms of new or replacement installations?

14. In five years, what percentage of successfully completed ATM transactions will NOT be cash withdrawals?

15. Do you think surcharging will become more prevalent in markets outside North America within the next five years?

More than 30%

27%

20% to 30% 32%

10% to 20% 27%

Roughly 10%

8%

Less than 10% 6%

Yes 40%

No 19%

Will staythe same23%

Unsure 18%

China

15%

1%

3%

10%

5%5%

2%

4%

3%

6%

27%

North America

20%

India

Africa

Central and South America

Western Europe

Central and Eastern Europe

Other(Asia, Japan and Spain)

Middle East

Australia and New Zealand

United Kingdom Russia


Less than 10% 6%

10-25% 16%

25-50% 32%

50-75% 29%

More than 75% 17%

Common, butnot pervasive

27%

Practiced by some

31%

A dominanttrend

27%

Unsure 14%

Will probably decline 2%

16. What percentage of U.S. ATM deployers will be EMV-compliant when the final liability shift occurs in the American market in 2017?

17. To what extent will financial institutions outsource their ATM operations all or in part by 2017?


Maybe you’ve heard this one before: What’s the role of ATMs going for-ward, especially in a payments environment that many say is becoming increasingly less reliant on cash?

I answer that question by first acknowledging that there are myths in pay-ments — lots of myths. Take, for example, the myth that millennials are forsaking cash. Another, even more outrageous myth is that cash is go-ing away altogether. After all, the storyline goes, as mobile payments gain steam, they are preparing to completely remake the payments experience — killing the use of cash in the process.

Well, what if I told you consumers aren’t looking for the payment experience to be remade?

Cash use still strong — even among millennialsDespite access to a variety of payment methods, plenty of consumers con-tinue to prefer cash for reasons such as budgeting, security or perhaps sim-ply the feeling of having a little spending money in their pockets. In a 2014 report, Federal Reserve data found cash — at 40 percent of all consumer transaction activity — to be the most used retail payment instrument.

Ready for the real myth buster? A diverse group of consumers, particularly younger consumers, prefer and use cash. Also according to the Fed data, 40 percent of 18- to 24-year-olds prefer cash, the highest percentage of any age group — demonstrating that cash continues to play a fundamental role in payments, even for the digitally savvy younger generation.

Cash doomsayers are looking at the payments industry from a limited view-point. They’re focused on the technology, not the consumer. Consumers

Steven RathgaberCEO, Cardtronics

Steven Rathgaber is chief executive officer of Houston-based Cardtronics, which works with retailers, financial institutions and prepaid card programs to make ATM cash access convenient where people shop, work and live their lives. Cardtronics owns/operates more than 52,800 retail ATMs in the United States and international locales, including Canada, Mexico, the Caribbean and United Kingdom.

INDUSTRY INSIGHT

Mobile technology: An opportunity, not a threat, for ATM owners


have shown us time and time again that when you provide a service they value, they come and they use it.

The real opportunity offered by mobile technologyNow, that said, just because consumers aren’t looking for the payment experience to be remade doesn’t mean that smartphones, retailer loyalty apps and mobile payments aren’t changing the game for ATM owners and operators. And respondents to the ATM Future Trends Survey 2015 agree, overwhelmingly selecting mobile technology as having the greatest poten-tial impact on the global ATM industry.

New technology can help us realize an environment in which ATMs are even more valuable to the consumer, beyond being convenient access points for cash.

Consider this: Consumers are increasingly aware of and frustrated by the fees they pay. Even in an era of increasing convenience for the consumer, many banks still charge a foreign fee to their customers when they use retail ATMs.

If fees reduce the convenience factor of a retail ATM, then the question be-comes how to make the ATM either more cost effective or otherwise more valuable to the consumer as a part of a holistic experience.

By taking full advantage of opportunities offered by mobile devices and location services technology, for example, we can enable the consumer to find a surcharge-free ATM based on their current geographical location.

Or, we as an industry can enable ATM-exclusive promotions — in-store discounts, links to retailer loyalty programs and digital coupons delivered to the mobile phone. Aided by mobile technology, the ATM can be central to deeper engagement in the environment where the ATM user is choosing convenient access to cash.

Bullish on cash — and changing technologyIn addition to surcharge-free solutions like Allpoint, Cardtronics is focused increasingly on creating mobile-enabled connections for our retailer part-ners. It’s about making the ATM fee a moot point because, for example, using the ATM unlocked $10 worth of savings for a consumer, extending the machine’s value to that user.

People withdraw cash from ATMs in the United States billions of times each


year. It’s easy to do, it’s convenient and it serves a basic need. But, we can’t be lulled into believing that — so long as consumer demand for cash remains healthy — conveniently located retail ATMs don’t need to change.

Mobile technology offers us one way to serve consumers better than ever, strengthening our connection to them and our value to our retailer and financial institution partners.


It might not feel like it sometimes, but low interest rates have created a benign operating environment for the cash industry. As interest rates will inevitably rise, the years ahead will not be so easy. While the pace and magnitude of rises remain unknown, failure to prepare now could see many ATM deployers struggle.

The impact of rising ratesThis benign operating environment isn’t just about a reduced cost of holding cash. Low interest rates have also created two additional positive outcomes.

Firstly, by encouraging cash hoarding, low interest rates have underpinned cash demand, with cash in circulation rising by 6 percent to 10 percent per year in many Western economies.

This has helped create a false confidence in cash. We forecast that, going forward, demand for notes will be negatively affected as higher interest rates reduce the incentive to hoard cash and alternative payment technolo-gies continue to gather momentum.

Secondly, low interest rates have created spare capacity in the armored transport industry. Low interest rates reduce the need for visits, as more cash can be held in an ATM at lower cost.

Spare capacity has resulted in lower prices and higher service quality. As interest rates rise, there will be an incentive to schedule more visits and this will lead to higher prices, at least in the short term, until more capacity comes on stream.

Therefore, our concerns are that even small increases in rates could lead to potentially devastating effects as businesses are caught in a “pincer move-ment” between lower income and higher costs.

Watch the FedAll eyes are on Federal Reserve Chair Janet Yellen for hints as to when the Fed will “push the button” and increase interest rates. Positive U.S.

Brendan DoyleCEO, Cash Management Solutions

Brendan Doyle is CEO of Cash Management Solutions. He has more than 20 years’ experience providing consultancy in the cash industry, and has worked with ATM deployers and financial institutions of all sizes in 20 countries, helping them to reduce their costs of cash management and improve their operational efficiencies. Brendan founded CMS in 1991 following receipt of his MBA at Manchester Business School in the U.K., and a career at the Royal Bank of Scotland.

INDUSTRY INSIGHTThe ticking time bomb: Interest rate rises


economic data through 2014 points toward a Fed strategy over the first six months of 2015 that will culminate with an initial rise in the federal funds rate halfway through the year.

There is, however, one factor that could derail this: inflation. Inflation is still below the Fed’s target of 2 percent and has shown no signs of reaching it. Traditionally, while inflation is low, rates should remain low, but the Fed seems prepared to go against this and trigger a rise mid-2015, regardless of the inflation rate.

Further to the timing of the initial rate rise, the increase in magnitude of in-terest rates will have a big impact on the ATM industry. When interest rates do rise, there is little consensus from Fed members as to the appropriate level to be set from 2015 or beyond.

In the September 2014 Federal Open Market Committee meeting, par-ticipants selected a federal funds rate target for the end of 2015 ranging between the current level of 0.25 percent* to as high as 3.0 percent.

A hike to 3.0 percent might not sound considerable, relative to long-term rates, but it will see underlying interest rise by a factor of 12, resulting in increased costs for ATM deployers in the obtaining, transporting and hold-ing of cash.

Dealing with rising interest ratesIn a higher rate environment, strategies for survival will include a drive for economies of scale, and we can expect further consolidation within the ATM and wider cash industries.

All businesses will need intelligent and innovative strategies to survive. First and foremost is a need to stress test your operating model against higher costs of holding and moving cash.

In stress testing analysis that we have conducted for several ATM deploy-ers, the results have shown that deployers’ profits are disproportionately affected. By conducting these tests, deployers obtain simulated results that they can use to prepare for future rate rises or, indeed, other threats — before they materialize.

Rising interest rates pose an existential threat. I urge deployers not to under-estimate the potential impact of this trend on their business and the industry.

*At the time of writing — Dec. 10, 2014


Far too frequently, the report of another data breach hits the news cycle. And these thefts are expanding in scope, with recent breaches boasting some of the largest data hauls ever recorded. The prevalence of retail and commercial business breaches — accounting for nearly one-third of all data breaches recorded in 2014, according to the Identity Theft Resource Center — has the potential to influence consumers’ point-of-sale payment methods, in addition to consumer trust. Not surprisingly, nearly 56 percent of U.S. consumers surveyed for the 2015 ATM Future Trends Report said they’d shift to using cash more fre-quently if breaches continue or get worse, with another 29 percent saying they’d start thinking about it very seriously.Increased demand for cash as a payment method would likely be sated at the ATM. But ATMs, like point-of-sale devices, face their own threats from attacks that attempt to compromise data by tapping into hard drives, ma-nipulating back-end systems or installing skimming devices.High among institutions’ concerns is skimming-related fraud. According to McAfee Security, this method accounts for 30 percent of all data fraud, and results in more than $2 billion in losses annually. But combating skimming — as well as trapping, fishing, malware and physi-cal attacks — starts with multiple layers of protection. As card-skimming fraud increases in prevalence and sophistication around the world, the need for a new grade of anti-skimming ATM security solution has never been more pronounced. This year, Diebold announced the ActivEdge anti-skimming solution, which counteracts every known form of skimming.

Frank A. Natoli Jr.executive vice president and chief innovation officer, Diebold Inc.

Frank A. Natoli Jr., was appointed executive vice president and chief innovation officer for Diebold Inc. in January 2012. He leads the global product and supply chain organizations, with oversight of Diebold’s global technology, product management, engineering, procurement, supply chain, and manufacturing groups. Before joining Diebold in 2005, Frank spent 23 years in the automotive industry in engineering, manufacturing and operations roles. He received a bachelor’s degree in mechanical engineering and a master’s degree at Kettering University.

INDUSTRY INSIGHTMore is better: Multilayered protection against persistent security threats


Current skimming technology relies on the ability to read the entire mag-netic stripe on a card as it is inserted short-end first into the ATM. ActivEdge accepts cards long-edge first, making it impossible for a skimmer to capture the card information.The technology also provides fully encrypted card-reading and data com-munication and gate-locking functionality to counteract card trapping and fishing; and reporting that delivers troubleshooting and service diagnostics, and generates forensic data and log files.Newer malware threats that require access to an ATM’s interior can be mitigated with layered protection. Using the ATM’s physical security sensors to detect unauthorized access to the computer can address any issues via real-time monitoring services. In addition, a computing platform that includes communication encryption, trusted device pairing, and trusted boot technologies makes logical pen-etration extremely difficult. And finally, real-time operating system and antivirus software management services help to ensure that every ATM is protected from the latest malware threats within minutes of a software update being issued.To combat physical ATM attacks, real-time ATM monitoring provides a layer of protection that identifies an attempted breach the moment it occurs. Integrating advanced sensors and alarms into ATMs aids in prompt detec-tion and reporting of attacks, and monitoring platforms can enable remote investigations and immediate corrective actions — including remotely shut-ting down a terminal.Piling on the layers of protection allows financial institutions to more ef-fectively monitor for, identify and mitigate expanding threats to the ATM channel, including terminal hacks, cutting-edge skimming devices and sophisticated malware. By adopting a multilayered security approach, institutions will provide a more secure self-service channel for consumers and help elevate ATM security for the industry as a whole and restore consumer trust. The industry itself needs to work in earnest — as it has begun to do with the recent formation of the ATM Security Association — to identify threats, share mitigation strategies and develop solutions for enhancing ATM secu-rity around the globe.


For an organization that seeks to advance electronic payments and com-merce, the next few years may well provide the opportunity for considerable action in the payments space from both the public and private sectors.Republican control of Congress could mean a less adversarial and more business-oriented approach to payments regulation. Beyond symbolic votes, Republicans need to demonstrate that they are able to govern and get bills passed through both chambers. Doing so will put the pressure on the president to either sign or veto any such legislation.However, payments will continue to receive considerable attention from executive agencies like the CFPB where there tends to be a more heavily prescriptive regulatory approach. While portrayed as consumer friendly, such an approach can often mean higher costs, reduced access and less innovation. Here are a few areas to consider:

RegulatoryOperation Choke PointRepublicans will continue their assault on Operation Choke Point in con-junction with several federal consumer protection and banking regulatory agencies and the Federal Deposit Insurance Corporation to hold acquirer financial institutions and their payment processor partners responsible for allegedly illegal acts committed by merchants and other third-party payees.Congressman Blaine Luetkemeyer will likely reintroduce his bill to limit the scope and reach of OCP. This could lead to hearings to highlight perceived and documented abuses of the program. We might also see legislative at-tempts to defund the program. We await the results of the FDIC inspector general’s investigation into that agency’s role in OCP.Additional efforts by new House Oversight Committee Chair Jason Chaf-fetz, will examine OCP issues at both DOJ and FDIC. The oversight com-mittee will continue to subpoena emails from department officials on this is-

Kurt Helwigpresident and CEO, Electronic Funds Transfer Association

Kurt Helwig is president and CEO of the Electronic Funds Transfer Association, an inter-industry trade organization dedicated to the advancement of electronic payment systems and commerce in the United States. He is a regular advisor to executive agencies within the government on payment systems issues, and has testified numerous times before House and Senate committees. Kurt is a founding member and co-chair of the ATM Industry Association Global Government Relations Committee and serves on the ATMIA board of directors.

INDUSTRY INSIGHTLegislative and regulatory predictions for the payment industry


sue following the oversight committee staff report, “Department of Justice’s ‘Operation Choke Point’: Illegally Choking Off Legitimate Businesses?” which came out in late July.Faster payment initiativeThe Federal Reserve has finally released its long-awaited report, “Strate-gies for Improving the U.S. Payment System,” which presents a multifac-eted plan for collaborating with payment system stakeholders to enhance the speed, safety and efficiency of the U.S. payment system. Now it will be incumbent upon the industry to collaborate with the Fed as it seeks to move the payments system to a near real-time settlement environment.

LegislativeIn 2014 there was bipartisan support for cybersecurity and data breach legis-lation. There may now be enough support for such legislation that a bill could end up on the president’s desk. The president could also issue further execu-tive orders on this issue as data breaches continue to make headlines.Mobile paymentsInnovation in mobile payments has sparked interest with the Consumer Financial Protection Bureau. Last summer, EFTA responded to a request for information from the CFPB seeking ways in which mobile payment technolo-gies can be used to bring more people into the financial services mainstream. EFTA’s response indicated ways in which this is currently being achieved and what can be done in the future to further facilitate this laudable goal. The response warned that an onerous regulatory approach could stifle in-novation and work contrary to the goal.In 2014, House Financial Services held a hearing on how technology can promote financial literacy. The hearing featured EFTA members who testi-fied about the benefits that mobile applications bring to consumers. The House Financial Services Committee and Senate Banking Committee are likely to hold more hearings on these issues to address new and excit-ing developments in mobile payment technology.Virtual currencyWith the development of bitcoin and other digital currencies, EFTA contin-ues to monitor regulatory developments at both the state and federal level. On Dec. 16, 2014, the Conference of State Bank Supervisors released their policy report, “State of Virtual Currency Regulation.” In this report, the CSBS Emerging Payments Task Force investigated the intersection of state laws and the budding digital currency phenomenon. The


task force identified consumer protection, market stability and law enforce-ment as areas of concern raised by the unregulated use of virtual currencies. However, the CSBS noted that existing regulations can be applied success-fully to cover companies and services using virtual currency; furthermore, they emphasized that their proposed state virtual currency regulation would not limit noncurrency uses of block chain technology. Federal regulation from both FinCEN and CFPB seems likely in this area since it continues to gain strong interest from consumers.As a result, various congressional committees including House and Senate Homeland Security, House Financial Services, Senate Banking, and both House and Senate Oversight and Investigations will likely hold hearings to examine the issue.Dodd-Frank and the Consumer Financial Protection BureauThe Republican-led Congress will continue efforts that we saw in the re-cently passed omnibus spending bill to chip away at aspects of Dodd-Frank legislation. This will likely include attempts to amend the form and structure of the CFPB to make it more accountable to Congress. Democrats will just as likely fight such efforts, but Republicans could attach requirements to a bill that enjoys bipartisan support in order to realize the changes they seek. The president may well veto any legislation that funda-mentally alters the CFPB.The next few years could have a significant impact on the payments and broader financial industry, and could illustrate that Congress is indeed ca-pable of passing legislation again.


Recently, I’ve detected a growing appetite in our industry for learning more about the future of the ATM. The future, after all, does directly influence investment choices, strategies, planning and business confidence. For example, the 2014 ATMIA member survey showed that the top two issues our members want the association to focus on are, firstly, ATM secu-rity and, secondly, the future of the ATM. Regarding the future, we should take heart from the continuing growth of the total payments market, in which the ATM plays such a key role. Dominic Hirsch, managing director of RBR, hit the nail on the head when he wrote, “The total number of payments is increasing, which means that payment methods are not so much cannibalizing each other, but evolving in their own way.”Our industry is embracing the future like never before. For example, we are powering ahead with the development of a 2020 industry roadmap for migrating to the next mainstream ATM operating system, well in advance of the end of support for Windows 7. Not only has a 2020 migration cost model already been made available by ATMIA for deployers to help them calculate the most cost-effective strategy, but alternative, non-Microsoft operating systems are being piloted for viabil-ity for future ATM migrations. In other words, our industry’s planning horizons for both software and hard-ware upgrades have expanded significantly since the end of support for Windows XP earlier this year. There are clear signs that the ATM industry is becoming increasingly proactive and future-oriented.This growing appetite for understanding and investing in the future direction of our industry is one reason why the 2015 Future Trends Report from ATM Marketplace is a timely and valuable document. In addition, ATM technology itself has begun its leap into the future, so readers can use the study to keep an eye on trends and stay abreast of new killer apps and emerging value-adding functions and services.

Mike LeeCEO, ATMIA

Mike Lee is CEO of the ATM Industry Association, a nonprofit trade association with more than 1,100 members in about 50 countries. He also is founder of the Global ATM Security Alliance, and is a qualified futurist with an MPhil degree in Futures Studies (cum laude) from the University of Stellenbosch business school in Cape Town.

INDUSTRY INSIGHT

The future of ATM technology


The ATM will remain the most important public face of channel banking for a long time to come. There is even a brand new sector in our industry, which is likely to increase considerably in 2015: the rise of bitcoin ATMs. Bitcoin ATM manufacturers are looking to extend their functionality in the future to be card-accepting. Technology Strategies International reported in their “The Future of Virtual Currencies — 2014” study that there are more than 100,000 merchants accepting virtual currencies, (of which there are about 700 active digital currencies). The study estimated bitcoin’s market capitalization at about $5 billion, accounting for more than 90 percent of the total, with only Ripple and Litecoin, of the other virtual currencies, having total values of more than $100 million. I find it fascinating that there is a strong demand from owners of virtual currency to convert some of it into good old hard cash through bitcoin ATMs.In fact, the popularity of cash amongst a tech-savvy public everywhere remains strong and resilient, despite the proliferation of different payment methods and customer-owned devices for mobile and online transactions, as well as growth in cards. The August 2014 edition of RBR’s Banking Automation Bulletin (issue 327) reported there were 10.8 billion payment cards in circulation at the end of 2013 (an increase of 11 percent from 2012). Nevertheless, the bulletin also pointed out that cash remains king even in mature, advanced countries such as the U.K., which sees about 20 billion cash payments made a year, or 50 percent of all payments, and the U.S., where cash is used for half of all transactions under $50. The most recent study by the Federal Reserve Banks of Boston, Richmond and San Francisco found that cash is still the top choice for payments in the country, accounting for 40 percent of transactions in October 2012, while debit and credit cards accounted for 25 percent and 17 percent, respective-ly (from “Reports of the Death of Cash Are Premature,” Wall Street Journal, Dec. 2, 2014).Despite the continued global popularity of cash, some authorities, whether governments or central banks, are trying artificially to end the reign of cash, which would dent freedom of choice in payments for their citizens. Conse-quently, ATMIA Europe has formed a Payments Choice 2020 committee to formulate and oversee the implementation of plans aimed at maintaining payment choice throughout Europe.I mentioned that our industry has begun a leap into the future. I would back a big future for cardless ATM transactions. Here’s what ATMIA USA Execu-tive Director David Tente, argues:


“I think cardless may be the biggest trend. It is the ultimate convenience for the consumer. There is simmering discontent over abusive network rules and increasing fees, adding more fuel for the fire. It also facilitates the de-velopment of payment options that may be added to the ATM channel.”David reasons correctly that the rising interest in ATM biometrics will further strengthen the shift to cardless. Ron Delnevo, executive director for ATMIA Europe agrees, seeing PIN and cards gradually becoming redundant with growing demand for NFC contactless at ATMs. An added benefit of contactless is that it removes the threat of card skimming, still the No. 1 type of fraud in our industry. Smart phones can now communicate directly with ATMs, rendering plastic cards unnecessary for initiating transactions.He is also sanguine about the future of cash-recycling ATMs, pointing out that 100 percent of new ATM installations in Japan are cash recyclers.“In Europe, I am told, Germany leads the way, with around 20 percent of ATMs offering this facility. This German figure is growing,” Delnevo said. Delnevo believes that cash recycling, along with increased merchant cash replenishment, which ATMIA Europe is promoting, can keep the costs of cash highly competitive, and keep access to cash for citizens as wide-spread as possible even in an era of shrinking bank branches. Cash recycling has obvious green benefits too, lowering the number of cash deliveries and thereby reducing carbon footprint. “A remote town or village in Norway could have a recycling ATM, enabling all local business to deposit their cash, which can then be dispensed to those in need of cash,” Delnevo said.Taking all these points into account, I would vote for a big future for card-less ATM transactions, huge increases in ATM biometrics and cash-recy-cling ATMs, a substantial rise in the number of bitcoin ATMs and, finally, continued global popularity of cash for payments under $50.Just around the corner, I believe, is a new golden era for the ATM as a core payments hub in a reconfigured banking and consumer landscape.


Auriga actively sponsors a broad range of market studies. This, our most recent project, in collaboration with ATM Marketplace, offers a number of interesting insights. Aimed at both the large and small institutions around the world, the survey asked participants to rank a variety of investment initiatives in order of ur-gency and importance to their own organization. Survey respondents were given 17 different initiatives to choose from, and the responses were then grouped by geographical region and relative score. One of the interesting results of this market study is that four of the top five investment categories in each region were the same, specifically:

• Mobile integration;• Branch transformation;• Security and EMV; and • Cash recycling.

While there are variations in the relative priorities across different regions, these four drivers truly represent global trends. And, it is highly likely that these trends will remain the primary forces of change in the ATM market over the short to medium term.Equally interesting is the fact that the fifth investment category was unique within each region: Migration from magnetic stripe cards within the U.S.

• Cost reduction within Europe; • Emergence of IADs in Asia-Pacific; and• Outsourcing of ATM networks in the Middle East.

A number of these investment areas are common to multiple regions, albeit at a lower priority than those regions’ top five rankings.

Vincenzo FioreCEO, Auriga

INDUSTRY INSIGHT

ATM future trends report offers macro, micro market insights

Vincenzo Fiore, founder of Auriga and CEO since 1992, is an energetic leader who is personally involved in all aspects of the company’s growth and continued success. Under Vincenzo’s leadership, Auriga has successfully delivered a wide range of software and services to hundreds of financial institutions in Italy and beyond. The company’s core values of delivering innovative solutions and lasting value are recognized and appreciated within the omnichannel banking sector.


Below the surface of these macro trends lie several intriguing emergent subtrends that continue to foster significant innovation and change in the ATM market. One of the most profound areas for change is directly affect-ing self-service devices themselves. The global ATM market continues to be dominated by the traditional “Big Three” manufacturers. However, a number of new entrants are making sig-nificant headway, both in terms of competitively priced lower-end devices, and in the high-end, multifunction machines being deployed in sophisti-cated bank branches. The choice of ATM software is also attracting keen interest among high pro-file customers who have been involved in recent months with the selection of vendor-independent ATM software solutions.Many of these changes are the result of relentless cost pressures and a pressing need for banks to build more profitable customer relationships in the new digital age. Market consensus currently is focused on the imple-mentation of customer-centric omnichannel strategies as the best approach to balancing these complex trade-offs. However, most industry observers agree that optimal leverage of the potential that lies in omnichannel banking has yet to be fully realized.Despite these uncertainties, a few factors are generally accepted as criti-cal elements — for example, the vital role of the bank branch in nurturing proactive customer relationships and dealing with high-value or complex banking needs.Another principle that draws broad agreement is that the increase in branch automation needs to be complemented by appropriately trained branch staff who are equipped to assist and advise, as needed. Technically speaking, it is already possible to automate a very large percentage of branch transac-tions. However, it is equally clear that customers need, and expect, a sup-portive “human touch” as they adapt to the new banking era. Market lessons-learned to date strongly indicate that mass transaction automation to reduce costs necessitates that branch staff receive new training, and access to real-time information that enables them to proac-tively engage and support their customers. In many cases, it also requires a change to existing processes in order to streamline and enhance the customer experience.Recent reports have highlighted that customers who interact with their bank through multiple channels are likely to purchase more products and ser-vices from that institution. This is clearly good news in a world of increasing competition and declining customer loyalty.


Over the last 20 years, the self-service industry has changed dramatically, and these changes have heavily affected both the financial and the IAD-ISO segments. More sophisticated consumers are demanding higher levels of service, driv-ing the need to make new transactions available via multiple channels. At the same time, the ATM owner-operator has a need to improve profitability.

Cash continues to be kingDespite numerous media reports and predictions in recent years that cash is on the wane, in fact, the opposite is true. According to the Federal Re-serve, the volume of U.S. currency in circulation increased by nearly 10 bil-lion notes between 2007 and 2013. And as consumers become more wary of data breaches, cash may continue to rise in popularity. An emerging requirement will be to rationalize the flow of cash between the retail store and the ATM owner-operator, whether an FI or an IAD. We see an increasing need to physically maintain cash in-store securely, while al-lowing the value of cash to be moved across, and between, the retailer and ATM owner. This will also allow the remote prediction of overall cash and denomination volumes. Given that cash is going nowhere anytime soon — and that cash handling is expensive — it is imperative in both the IAD-ISO and the FI spaces to work with a partner who understands both markets and the business of cash handling. And in fact, the two markets are not as different as you might think.

More security, innovation, flexibility and responsivenessIADs and financial institutions are not all that dissimilar. Both are navigating a world in which transactions are down, and regulatory pressures are

Andy OrentCEO, Nautilus Hyosung

INDUSTRY INSIGHTTrends reflect IADs’ and FIs’ need to keep abreast of market demands

Andrew M. Orent is president and CEO of Nautilus Hyosung America, and has spent more than 30 years selling technology, software and services to the financial services industry. Prior to his appointment at Nautilus Hyosung, he was vice president, Oracle Banking Platform, and Global Business Team Leader. Before joining Oracle, he led the global WW Financial Services Industry team at HP. In the past, he also has held key leadership roles in general management, sales and marketing at NCR.

http://www.nationaljournal.com/innovation-works/cash-is-dead-are-credit-cards-next-20131125

http://www.theguardian.com/money/2013/aug/19/card-payments-overtake-cash-transactions


stifling some aspects of the business that once were counted as key revenue streams. Customer service, security, innovation, flexibility and agility are paramount for both FIs and IADs-ISOs. And for both, new revenue streams and trans-actions and improved efficiency are a must.By implementing more innovative, feature-rich and secure devices, both IADs and banks can provide a greater customer service experience that will unlock new revenue streams and enhance profitability going forward.

Trend-spotting for FIs and independentsAs a market leader in the IAD space — with a 60 percent share year after year — and also in the emerging FI branch transformation market, Hyosung is not only aware of these trends, but also is a driving force behind them.In the retail market, we are dramatically increasing our investment in technology and software designed to drive additional revenue streams and lower operating costs for IAD-ISO customers. This could mean anything from allowing consumers to buy tickets for events or mobile phone minutes to enabling them to make a charitable donation through an ATM. We are also paying particular attention to the evolution of new forms of electronic and wireless payment (i.e., Apple Pay and Google Wallet) and to the integration of ATMs into these other channels. Additionally, we are partnering with some of the most sophisticated and advanced financial institutions around the world to provide best-in-class branch transformation solutions that move transactions to a lower-cost channel in order to drive down branch costs.These projects are designed to migrate basic transactions and cash handling from human tellers to automated devices, and to increase self-service capabilities. For example, in many bank branches, tellers still spend too much time counting cash as opposed to interacting with customers. A branch transformation project might examine redirecting resources toward solutions that can automate cash handling, allowing cash to move securely from where it is physically in the branch to where it needs to be. Investing in technology solutions that provide enhanced self-service capabilities and automate manual processes is obviously central to any branch transforma-tion project. Financial institutions are finding that branch transformation must be under-taken in a strategic way, encompassing people, process and technology, in order to meet the business goals of the institution. Banks know that their


branches still fill a role in new-customer acquisition and cross selling, but need to be reformatted and reimagined to appeal to the modern customer. Finally, we at Hyosung are leveraging our advanced cash handling capabili-ties to help both retail and banking industries manage cash more efficiently between them. This will bring a new level of security, efficiency and ef-fectiveness to the management of overall cash flow for medium and large retailers, giving them a clear competitive advantage.


The popularity of branch banking is heating up among consumers, and this is lighting a fire under the seemingly inextinguishable debate over the branch of the future.When the American Bankers Association released new survey data this summer showing a sizable gain in popularity for branch banking among consumers, the digital pundits sharpened their knives and went in for the kill. They attempted to poke holes in the increasing emphasis banks and credit unions are placing on branch strategies, and the investments they are making in the channel. The argument, they’ll say, is that the branch is the lowest-performing chan-nel in the banking network, and it’s misguided to put time, energy, resourc-es and capital into the branch of the future.Maybe the issue with banks putting an emphasis on “branch of the future” isn’t with the branch. Maybe the issue is with waiting for the future.The need for a right-sized retail network is today. The opportunity for a right-sized retail network is today.Banks are moving on from future-branch thinking and instead taking action around transformation through usability, design, service-first architectures and frictionless environments. If you look at the spending of financial institu-tions today, they are speaking with their pocketbooks because their custom-ers are asking for it. In the U.K., the Royal Bank of Scotland alone plans to spend more than 1 billion pounds ($1.5 billion) over the next three years to transform its retail network. The heavy lifting of a right-sized distribution network is more than just about closing real estate. It’s more than just investing in technology. It’s about connecting with people. It’s about consumer engagement. The table stakes of right-sized branches, redeployed tellers and trans-

Brian Baileyvice president of marketing and strategy, NCR Financial Services

INDUSTRY INSIGHT

Taking action around the ‘branch of the future’

Brian Bailey, vice president of marketing and strategy, is responsible for the growth and strategic direction of NCR Financial Services, the largest division within NCR Corp. In 20 years with NCR, he has held management positions in the areas of sales, marketing and product management, including assignments in NCR’s Asia Pacific and European markets. Bailey is a graduate of the University of Dayton in Dayton, Ohio, where he earned a Bachelor of Science degree in Marketing and Finance.

http://ababj.com/component/k2/item/4866-branch-visits-rebound-as-channel-choice/4866-branch-visits-rebound-as-channel-choice

http://www.finextra.com/news/fullstory.aspx?newsitemid=26212

http://www.finextra.com/news/fullstory.aspx?newsitemid=26212


formed processes can only yield success if banks can reconnect in a mean-ingful way with consumers at the branch. The crazy thing is that consumers want to be engaged in a meaningful way. An Accenture study showed that about two-thirds of consumers still prefer to speak with a bank representative face-to-face when purchasing a new product, rather than buying online. Perhaps this is why the branch of the future discussion has gone on for so long. For years, we’ve understood the tenuous dynamic between the branch’s original function as brand ambassador and sales-and-services center, and the inherent cost associated with the channel. Several years ago, Tower Group estimated that a new branch must accumulate $40 million in new deposits within its first five years to justify the average $2.7 million cost of building; however, the typical new branch averages just $27 million in deposits in its first five years.So what is the balance between operational cost and revenue growth? Is it wise to emphasize a channel being characterized as “in decline”? Some things are worth fighting for. Some things intrinsically hold value and deserve our attention. Some things just need some creative solutions to improve. For a bank, sacrificing a physical presence in the community only makes it easier for digital competitors to steal customers … or for nonbanks to lever-age their retail presence to offer banking services to fill the vacuum created by branch closures. The market is becoming crowded with nonbank alternatives, most in the digital space. Other disruptors such as PayPal have simplified digital pay-ments, and some would say the need for a bank account is declining. Amid all this pressure is a clear opportunity for growth.According to a 2014 Bain report, direct banks enjoy a 70 percent net promoter score advantage over their traditional rivals; however McKinsey reported this year that digital enquiry vs. sale conversion is a fraction of that achieved at the branch — 15 percent compared with a whopping 85 percent at the branch. Ultimately, banking is a service industry. Expertise, service and trust matter. People play an important role in that. Human engagement and interaction are essential to providing the full service customers demand. Over the past several years, assisted service has taken the retail banking industry by storm, merging technology and people to put a human touch back into banking. Assisted service allows consumers to receive all the


benefits of self-service convenience and accessibility with the added benefit of personal staff interaction.Through assisted service technology, banks can improve their physical distribution economics through capital-friendly network models, delivering a complete range of financial services to their customers. This new model will allow customers flexibility in where they prefer to do their banking, while radically altering branch cost and revenue models. In the pro-cess, NCR is working with banks to synchronize their channels, creating an informed sales platform that makes each customer interaction count.Through the use of assisted service, Wells Fargo has created a new local-store approach that the bank anticipates to require 40 to 50 percent of typical operating costs. Through the use of assisted service, another NCR customer has seen annual sales grow 76 percent, along with dramatic improvements in net promoter scores. By the end of Q2 2014, more than 100 banks and credit unions were implementing NCR assisted service solutions to help transform their networks. NCR also is taking its assisted service solutions —which include interactive services technology — to international markets including the Middle East, Europe and South Asia.Banks do need to examine their digital and physical service distribution and align them with market priorities. Their response, though, doesn’t need to be “cut, then cut, then cut some more.” Technology, along with other com-ponents, is putting banks on the path to an improved branch environment and consumer engagement.For the branch, the future is now.


Retail ATM functionality will expand beyond cash dispenseATM capabilities such as lottery ticket and gift card purchases, charitable donation, direct currency conversion, mobile phone top-up and digital ad-vertising are all now being offered at some level at retail ATMs. Given the growing costs of regulatory compliance and necessary upgrades, it is essential that ISOs grow their business and leverage their ATM footprint beyond the shrinking interchange and surcharge model. These expanded ATM technologies have made strides in recent years and will finally reach critical mass in the near future.

The costs of operating a retail ATM business will continue to mountEMV upgrade expenses are only the tip of the iceberg. Operation Choke Point has banks dropping retail ISOs like hot potatoes. Banks no longer want to provide services to ISOs who load their own cash, and rumors regarding closer scrutiny of merchant cash load are growing. Add to these headwinds interchange pressures, proposed surcharge caps, fraud chargebacks and other threatened regulatory interference, and you will almost certainly see a contraction in the number of ATM ISOs over the next few years.

Retail ATMs will begin to see significant breachesThe year 2014 was the year of the POS and database breach. It also was the year when financial institutions began to upgrade their ATMs for EMV and migrate their fleets to Windows 7.Predictably, thieves will now migrate from hardened silos to more opportu-nistic targets. This means that retail ATMs will be hacked with increasing frequency in 2015 and beyond.

Daryl CornellCEO, Triton Systems

Daryl Cornell is President and CEO of Triton Systems. Before joining Triton in 2007, he served as general manager, COO and CFO for a number of private equity portfolio companies, and also served in a variety of finance and operational roles at Ryder System. Daryl holds a Bachelor of Science degree in mathematics and computer science from Florida Institute of Technology and an MBA in finance from the University of Florida.

INDUSTRY INSIGHTBold (and not so bold) predictions for the future of retail ATM


We have already seen these types of attacks outside the U.S., including not only card skimming operations, but also the use of sophisticated hack-ing methods that can empty a retail ATM quickly. Hardware and firmware to thwart these attacks are available, but thus far, few ISOs have decided to upgrade.

Bitcoin (and the bitcoin ATM) will garner outsized press, but remain on the fringeThe bottom line is that governments generally perceive bitcoin as a threat to fiscal sovereignty. Central banks benefit greatly from the ability to create currency out of thin air. It is doubtful that any country would willingly con-cede that power to alternative currencies such as bitcoin. In addition, virtual currencies like bitcoin are tempting targets for hackers. Look for increasing regulation, taxation and “consumer protection” legisla-tion directed at bitcoin.

Cash will remain kingPrognosticators worldwide continue to predict the imminent death of cash. However, recent surveys have shown that 80 percent of low-value transac-tions and 50 percent of all transactions are still conducted with cash. When you hear stories about the explosive growth of mobile payments, re-member that these transactions are generally at the expense of bankcards and checks — not cash. Mobile is undoubtedly coming, but the ubiquity, anonymity and overall con-venience of cash will continue to drive its popularity. Fortunately so, for at the end of the day, it is the dispensing and recycling of cash that keeps the ATM ISO business viable.


At Wells Fargo, we know that, for more than 160 years, our customers have chosen to do business with us for one simple reason: We have maintained a commitment to meeting their financial needs. A big part of that commitment is convenience — we have approximately 6,200 retail banking stores and more than 12,500 ATMs coast to coast, along with 24/7 access to phone banking and a variety of online and mobile options. Access to banking and other financial services is never far away. But we believe it’s what we do with these convenient options that really makes a difference to our customers. Our thousands of stores and ATMs wouldn’t be nearly as effective in meet-ing the changing financial needs of our customers if we didn’t work so hard to understand those needs — and to show our customers that we under-stand them. Of course, one critical way to build lifelong relationships with customers is through our network of personal bankers who live and work in the commu-nities we serve. These individuals are passionate about helping our cus-tomers succeed financially at every stage of life.We also know that customers interact with us by using a combination of the various channels we offer. That’s why we are constantly looking for new ways to connect with our customers in a meaningful way. One way we’ve done that is through our network of ATMs. For decades, Wells Fargo has been working to drive ATM innovation in ways that make it easier for our customers to conduct transactions and go about their busy lives. Some of those innovations have been driven by a desire to meet the diverse needs of our customers. For example, all of our ATM locations feature ATMs with voice instructions for the visually impaired, and on-screen instructions are available in eight languages: English, Span-ish, Chinese, Vietnamese, Korean, Hmong, Russian and French.

Alicia Moorehead of Wells Fargo ATM Banking

Alicia Moore is a senior vice president and head of Wells Fargo ATM banking. She started her career with Wells Fargo in 1988 as a teller, and joined the ATM banking group in 2000. Moore served in various store management roles before taking on management of centralized communication, process and procedures for stores. She led the business group in designing and launching a new, more efficient teller system known as TellerVision and a banker tool known as Store Vision Platform.

INDUSTRY INSIGHTConnecting with customers through ATM innovation


Other innovations have been motivated by our commitment to environmen-tal stewardship. For example, we were the first bank to offer ATM receipts via email and text, and since 2011, our entire ATM network has been enve-lope-free, which not only saves customers time, but also saves thousands of trees each year.We’ve also created a number of features that aim to delight our customers by showing them that we know them. In order to help our customers man-age their money, we designed a new feature, Cash Tracker, which automat-ically displays the total amount of cash they’ve withdrawn from Wells Fargo ATMs in the current calendar month. In recent years, we’ve also launched projects that allow us to wish our ATM customers a happy birthday or a happy anniversary of the opening of their account. And, this past year, we began to allow customers to send a person-alized birthday greeting to a joint accountholder through our ATM network.In addition to connecting with customers on a personal level, we’re always looking for ways to remind them that we’re truly invested in their communi-ties. Each year, we honor educators across the country by congratulating the teachers of the year in a number of states on our ATM screens. We also frequently display localized ads celebrating achievement in the world of sports, including one this fall congratulating San Francisco’s baseball fans on their 2014 championship. All of these initiatives have generated wonderful feedback through our bankers and social media channels, and have been a great way to show our customers that we know them and their communities.A network of convenient banking options is critical to the success of a com-pany like Wells Fargo, but that network is most effective when it’s used in a way that provides a complete customer experience. By focusing on ATM innovations that allow us to show our customers that we really know them, Wells Fargo is doing more to help those customers succeed financially.


The global ATM channel is increasingly divided into two quite different envi-ronments. In mature markets, the growth of electronic payments is forcing ATM operators to rethink traditional business models. In emerging markets, the rapid growth of banked consumers and relatively high levels of cash use are driving ATM demand to new heights, but this growth may be short-lived. Both environments demand and will reward innovation, scale and a long-term strategic view.The principal challenge is that from a consumer perspective, ATMs are a commodity. All ATMs provide the same core service (cash disbursement and balance enquiry) and deliver the same product (currency). Global and national networks generally ensure that all ATMs can fulfill a consumer’s cash needs.Outside the markets where off-us ATMs are permitted to surcharge con-sumers, which drives people back to ATMs operated by their own bank, a typical consumer simply uses whatever ATM is most convenient. From a business perspective, this means ATM operators must either differentiate or accept marginal and shrinking returns — neither of which is easy.In mature markets, where the need for cash (though not necessarily the preference for cash) is steadily diminishing, bank ATM operators are ag-gressively leveraging technology and using ATMs to grow their perceptual scale. Some banks promote their ATM footprint as a competitive advantage. This trend is a boon to nonbank ATM operators with the scale to support bank branded off-premises ATMs throughout a market. Also, through innovations like live video and scanned deposits, bank brand-ed ATMs are performing more and more functions traditionally performed by human tellers, helping to drive efficiency gains for banks. Forward-thinking banks are rapidly modernizing the design and user interface of their ATMs to meet consumer expectations that have been elevated by personalized, multifunction devices such as smart phones.

Leland Englebardtgroup head of network solutions, MasterCard

Leland Englebardt is group head of network solutions at MasterCard. In this role, he leads the team responsible for business management of MasterCard’s global switching platforms for credit, debit and prepaid products. The MasterCard Network switches more than 34 billion transactions per year in 150 currencies, initiated with MasterCard, Maestro and Cirrus-branded cards in 210 countries and territories worldwide.

INDUSTRY INSIGHTATM trends in mature and emerging markets


The increasing sophistication and differentiation of branded ATMs will put heavy pressure on independent white label ATMs. These ATMs will see continued and accelerated reduction in volume per terminal unless they develop a differentiated value proposition. This new value will likely come not from cash disbursements, but from creative development of the ATM’s relationship with its merchant host. Independent ATM operators that lever-age a deep knowledge of their merchant partners’ business drivers can propel gains for both parties and are more likely to defend their franchise.In emerging markets, ATM deployment and volume is growing rapidly. In some markets, ATM use has benefitted from long-term government efforts to increase the banked population and to convert benefit delivery from vouchers to electronic payments. Growing demand has in some cases driven linkage of domestic ATM networks to provide ubiquitous cash access for an increasingly affluent and mobile population.Emerging markets also have challenges. E-commerce and other forms of retail electronic payments are becoming more accessible and growing rapidly, beginning to displace cash. This trend will accelerate. Adoption of smart phones and availability of noncash electronic payment applications are proliferating. As major markets adopt EMV chip and other effective security tools, inter-national criminals are beginning to target less fraud-proof ATMs in emerging markets. In some markets, ATM deployment and use is still limited by mar-ginal infrastructure, lack of physical security or political/economic instability.ATMs will continue to be a major feature of the consumer payments land-scape for years to come. The longer-term future of ATMs outside of bank branches can only be ensured by relentless innovation of the ATM’s functions and of its business model. ATM operators must look beyond traditional “vend-ing” functions and integrate the ATM with retail as an engine of commerce.


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