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Special Edition - Seminar Highlights

1. OVERVIEW

Seminar Kickoff, Guest Speakers, and Panelists

On the 14th of November the 2013 ATM and Branch Automation Market Study and

Seminar by Payments Consulting Network (PCN) was hosted at Commonwealth Bank of

Australia, Sydney with 80 key industry stakeholders in attendance from both Australia and

overseas. The Seminar covered key findings from the 2013 Market Study, sponsored by

Wincor Nixdorf. The Market Study is the third for the Australian market following studies

conducted in 2008 and 2010.

The 2013 Seminar examined the challenges and opportunities for the ATM and Branch

Automation sectors. From Ross Dawson’s keynote address on “Trends and Creating

Business Value for the Future” to the closing panel discussion “Independent ATM

Deployment - The Changing Landscape”, a cross-section of views, opinions and ideas

were covered. See the full Programme here .

Guest Speakers & Panelists

With insights being shared by expert national and international speakers it was an

event not to be missed. Speakers included:

Peter Blackett, General Manager - Asia, Banktech

Jens Bohlen, EVP, Banking & Board of Directors, Wincor Nixdorf AG

Ross Dawson, Founding Chairman, Future Exploration Network

Stephanie Coleman, Manager Self Service, Digital Banking & Distribution,

BOQ

Naina D’Souza, Head of Channel Integration & Experience, CUA

Peter Frielick, ATM & Self Serve Consultant, Westpac

Yogiono Hendiarto, Finance & Operations Director, Bank Muamalat

Indonesia

Sharon Lu, Associate, Research Director, Payments Consulting Network

Mangala Martinus, Managing Director, Payments Consulting Network

Gavin Napier, Head of ATMs, Commonwealth Bank

George Nearchou, Associate, Payments Consulting Network

Tyron Niddrie, General Manager, Network Development, Commonwealth

Bank

Faisal Omar, Associate, Payments Consulting Network

Dr Brad Pragnell, Head of Industry Policy, APCA

Peter Tilton, Head of International and Express Banking, ANZ

Lee Whitney, Vice President, Retail Business, First Data

Tim Wildash, Chief Executive Officer, Next Payments

Jude Xavier, Senior Manager, ATM Centre for Excellence, Westpac

The Seminar included a number of innovation themes including:

ATM and Branch Automation Trends and Industry Forecasts

New Payments Platform (NPP), Contactless and Mobile – ATM Channel Implications

Spotlight on the Westpac Branch Transformation Strategy

Credit Union Australia's New Branch Experience

International Perspectives

The program for the day included three panel discussions covering hot topics such as the

impact of new branch transformation strategies and how the industry is evolving to cope

with the challenges and opportunities of new payment products and channels.

The Seminar finished up with a panel discussion on the changing landscape for

Independent ATM Deployment, which highlighted the threat of product innovations and

regulatory changes.

Attendees at the Seminar event included:

ANZ Bank

Bank Muamalat Indonesia

Banktech

Commonwealth Bank

Cuscal

Diebold

First Data

Glory Global Solutions

Integrated Technology

Solutions

Australian Payments Clearing

Association

Bank of Queensland

Bendigo and Adelaide Bank

Credit Union Australia

DC Payments

FEXCO

Future Exploration Network

Greater Building Society

KAL

Kiwibank

National Australia Bank

Newcastle Permanent

NH Equipment Australia

SprintQuip

Westpac

Wincor Nixdorf, Germany

Microelectronic Solutions

NCR

Next Payments

Phoenix-Interactive

Suncorp Bank

Wincor Nixdorf, Australia

Wincor Nixdorf, Singapore

2. STATISTICS

ATM and Branch Automation Trends and Forecasts

Kicking off proceedings, Mangala

Martinus, Managing Director at Payments

Consulting Network presented a summary

overview of draft findings and analysis

from the upcoming "2013 ATM and

Branch Automation Market Study”.

This was followed up later in day with a

more detailed presentation from

Research Director Sharon Lu.

According to participant feedback 21% of the combined 2,603 branches covered by the

study will be transformed with self service automation technology within the next 3 years.

The majority of the larger financial institutions have already deployed intelligent deposit

ATMs and this rollout is continuing. However the results demonstrate a broader focus on

overall branch transformation initiatives.

Branch automation devices are on the rise with some Financial Institutions now looking at

cash recycling ATMs and assisted self-service devices over the next 12 months.

According to the study projections, the aggressive rollout of advanced function ATMs will

translate to a 55.5% CAGR between 2013 to 2018. Automated Teller Devices are also

expect to have a steady growth of 14.5% CAGR with Coin Deposit & Exchange Devices

rising at 18.8% CAGR over the same period.

Later in the afternoon, Sharon Lu, Associate, Research Director, Payments Consulting Network presented more detailed insights with “ATM Market Study Trends and Industry Forecasts”.

Overall that the Australian market is

reaching maturity, with growth plateauing

at 3.2% CAGR.

While growth in standard ATMs deployments is expected to fall, this will be offset by

growth in more sophisticated devices such as intelligent deposit and cash recycling

ATMs. Other key statistics include;

Domestic withdrawals are considered the core function of the ATM machine by 70%

of the participants. However, depository functions are also a strong focus for the

next 3 years.

Participants remain vigilant about fraud and ATM security. Despite a decrease in

incidences, losses per incident have increased x5.5 from $1,878 in 2010 to

$10,347 in 2013.

Average Monthly Transactions per ATM will see a steady decline with -1.6% CAGR

from 2014 to 2018. However average device profitability is expected to stay above

breakeven.

According to the results of the previous Market Study in 2010, ATM deployers across all

categories considered the ATM channel as a profit centre. However, feedback from

respondents in 2013 show it is now overwhelmingly considered a cost center and an

important customer service channel.

2013 ATM and Branch Automation Market Study

The final 2013 Market Study report is scheduled to

be released in January 2013 and will provide in-depth

analysis of trends, economics and emerging strategies

in the rapidly changing Australian ATM market.

Following the success of the 2008 and 2010 studies the

scope has been expanded to include branch

automation and the importance of intelligent deposit

ATMs, teller cash recyclers and self-service devices in

transformation strategies.

The 2013 report will include over 200 pages of in-depth analysis and more than 200

charts. All analysis and charts in the report are provided both at an industry level and

broken down into four deployer categories including Large Banks, Other Banks,

Independent Deployers and Building Societies and Credit Unions.

For more information about the report, click here .

2013 ATM and Branch Automation Market Study Participants

Large Banks: ANZ Bank, Commonwealth Bank (Seminar Host), NAB, WestpacGroup (including St George, Bank of Melbourne, and Bank SA).Other Banks: Suncorp, Bendigo & Adelaide Bank, Bank of QueenslandBuilding Societies and Credit Unions: CUSCAL, Greater, Newcastle PermanentIndependent Deployers: Banktech, Cashcard, DC Payments, Next Payments

3. INNOVATION

Contactless, Mobile, and Faster Payments

On the theme of the proposed "New

Payments Platform (NPP), Contactless

and Mobile – What They Mean for the

ATM Channel", Dr Brad Pragnell Head of

Industry Policy, Australian Payments

Clearing Association (APCA) discussed

the potential implications of a New

Payments Platform Roadmap for the

Australian market.

The NPP, which is being planned for implementation in the Australian market in 2016, will

require all ADIs (Australian Deposit-Taking Institutions) to connect to one central platform

that will be designed to make the payment process faster. This core infrastructure project

is expected to enable new innovations in payments that are currently coming into focus.

Faisal Omar, Associate at Payments Consulting Network, further presented on the topic

of “How Mobile Payments and Contactless will Revolutionise the use of Cash for

Payments”. The presentation provided insights on the evolution of banking services from

ATMs to Internet and then Mobile. The following key Mobile Payment trends were noted;

Biometric payments

Evolution of POS to POP (Point Of Presence)

Location commerce

Emergence of new payment currencies

Increased government regulations and control

New ‘mobile’ form factors

Real-time and converged payments

The topic concluded with a panel discussion, facilitated by Payments Consulting Network

Associate, George Nearchou on “The potential impact of these changes on the ATM

channel over the next 2-3 Years”, which was considered one of the seminar highlights.

4. CASE STUDY

The New Branch Experience at Credit Union Australia

During the morning session, Naina D’Souza, Head of Channel Integration and Experience,

Credit Union Australia (CUA) provided an overview of their “New Branch Experience”

project. Naina discussed the strategy and challenges in designing a new branch of the

future, including insights into how they used customer feedback, staff feedback and

observation of changing customer behaviour to inform the design process.

Naina explained: “Our focus has been on the seamless integration of a relaxed, organic,

warm and inviting environment, with the buzz and convenience of leading digital

technology for our customers to explore opportunities and transact.”

Source: w w w .behance.net

Based on the findings from their flagship concept branch, future CUA branch designs will

focus on incorporating three key aspects:

Channel integration: Creating a seamless customer journey supported by

appropriate internal processes and systems

Evolving channels: Social; Contact centre; Mobile

People: Customer expectations & needs; Employee engagement & development.

For further reading about this project try Behance or The Financial Brand.

5. CASE STUDY

Westpac Branch Transformation Strategy

Jude Xavier, Senior Manager at ATM

Centre for Excellent, Westpac in his

presentation “Simplifying Through Self

Serve” presented an innovative branch

design complimented by new technology

in response to changing customer needs.

The presentation kicked of with a

screening of the banks "new night-time

economy" television commercial.

Jude stressed that customer banking needs are changing. The branch environment is

fast becoming less about transactions and more about interactions.

The presentation also covered the broader role of new Self Serve machines in delivering

opportunities and achieving new branch objectives including reduction of noise,

simplifying branches, improving the customer experience, and optimising the use of

available branch footprints to provide 24/7 banking.

The key drivers for the branch transformation strategy include;

Co-ordination from all channels, products and staff

24/7 availability and real-time value of funds

Customer confidence

System redundancy

The presentation highlighted that there was a shift from traditional paper marketing to

digital, and the importance of making significant investments in training branch staff in

both technical elements as well as new customer engagement behaviors.

Payments Innovation Daily recently covered a Global Branch Showcase including

branch concepts from Westpac and Commonwealth Bank. The NAB Smart Store design

and the ASB Innovation Lab have also been featured in past issues.

For further information about the 2013 ATM and Branch Automation Market Study

or the Seminar contact mangala.martinus@paymentsconsulting.com.

Industry Watch

Keep your finger on the pulse - bringing you

payments related news, announcements,

launches and more.

SECURITY & FRAUD

Enterprise News - Experts says ATM thefts like

the one in Middleboro rare – “Despite a growing

trend to skip the bank in favor of an ATM, experts

say robberies at the automated tellers are rare.”

ATMMarketplace - Strategies for securing ATMs

– “Operators around the globe are turning to

EMV to increase security. The United States,

however, remains primarily dependent on mag-

stripe cards, leaving deployers vulnerable”

ATMs

PC Tech Magazine – MTN Uganda launches

another Mobile Money ATM cash out service in

partnership with Interswitch – “MTN Mobile

Money customers just generate a four digit TIN

by dialling *165# from their mobile phone which

can then be used at any Interswitch ATM across

Uganda on a 24/7 basis to access money.”

The Swazi Observer - ‘Use ATMs with caution’ –

"fraudsters could use small hand-held card

reading devices to capture the electronic data

encoded on a card.”

Business Standard - Card swipe machines may

raise banks' costs – “For banks, compliance

with the Reserve Bank of India (RBI)’s directive

to install new card-swipe machines (with

biometric scanners to enable Aadhaar

authentication) would come at a cost”

ATM marketplace.com - GRG tackles TCO at

ICCOS Asia – “Case studies from Turkey and

China have shown that cash management-

related expenses can have 20 times greater

impact than the price of the equipment it is

dispensed from…GRG showcased solutions for

banknote sorting and recycling”

Banking Business Review - Andhra Bank opens

90 Nextgen retail branches across India – “The

Nextgen retail branches are equipped with fully

automatic machines in the front desk, including

self-service passbook printers and ATM, which

also offer routine business transactions 24X7.”

Economic Times - India’s top eight retail chains

report rising card payments in big cities –

“Future Group, Shoppers Stop, Spencer's, Wills

Lifestyle, John Players, Woodland, Next and The

Mobile Store - said credit and debit card

payments have consistently exceeded cash this

year in the biggest cities”

HispanicBusiness.com - Diamond Bank Sees

Growth with CR2's BankWorld Multichannel

Platform – “across their ATM, internet and

mobile banking channels including banking

services unique in Nigeria."

Wall Street Journal - Bank of China Selects NCR

to Support New ATM Software Application

Development – “The project will be conducted in

three phases to enable new features and

capabilities such as chip-based, automatic top-

up, transaction short messaging, new reporting

format, as well as converging with new payment

channels such as point-of-sale, mobile and

internet terminals.”

NCR - NCR APTRA Interactive Teller - "enables

banks to offer their customers the benefits of

both self-service video banking and the branch

experience in one solution, closing the “intimacy

gap.”

DigitalTrends - Banks start to roll out ATMs with

human teller video chat option – “Played over the

ATM screen, bank customers can speak to a

teller if they need to carry out advanced

transactions like cashing a check or making a

withdrawal in specific denominations. In

addition, customers can withdraw money from

their account if they left home without their ATM

card or simply lost it.”

BankTech - Bank of America Employee Petitions

Against Video ATM’s – “A Bank of America

spokesperson told ABC News that there is no

difference in pay between the bank’s in-branch

tellers and call center tellers, and said the bank

has no plans of cutting in-branch teller jobs.The

bank has now deployed its video ATM’s that

allow customers to communicate with a remote

teller in 61 locations across the country”

Selfserviceworld - NCR APTRA debuts in

Africa – “…NCR Corp., in collaboration with

Bytes Managed Solutions, its exclusive

distributor in South Africa and other selected

countries, launched NCR APTRA Interactive

Nigerian Bulletin - National Identity card to

become ATM, Travel Card – "Nigerians can use

the new national identity card as an Automated

Teller Machine (ATM) card anywhere there is

MasterCard logo in the world”

Proactiveinvestor - Transaction Solutions

International pushing for additional contracts in

Indian ATM market – "received a first tranche of

funds from an Indian-focused private equity

group, that was first announced in May

2013.This is part of a $22 million investment in

to TSI India to leverage growth in ATM

deployment in India.”

The Conversation - Are we moving towards a

cashless society - or simply less cash? – “The

most common way that individual Australians

access cash is through the Automated Teller

Machine (ATM) network, of which there were just

under 35,000 machines in Australia in June

2013. These accounted for 60% of the total

value of cash withdrawals in 2012/13”

Teller ... enables services that cannot be

conducted at a traditional ATM or other self-

service device”

Selfserviceworld - Saudi bank orders nearly 600

Diebold custom kiosks, advanced ATMs – “In

addition to 560 Opteva ATMs, the bank has

purchased customized kiosks enabled for

checkbook and debit card issuance, online

banking, statement printing and new account

opening.”

INNOVATION

ATMmarketplace - The ATM industry's mobile-

digital choice: Innovate or die – “… the growing

number of cardless transactions at ATMs and

how important this dynamic will be in bringing

the unbanked into the payments industry; and

competition between banks and non-bank

providers of financial services ... competition is

so ruthless, so global and so huge in scale, that

it's innovate or die."

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