How CIT companies can become excellent candidates for ATM managed services

As the mobile channel has grown globally in retail banking, a significant number of banks are considering outsourcing or consolidating their ATM networks. The level of urgency and the scope of outsourcing operations may vary for each market and institution, but usually exist to some extend one way or another.

Depending on the level of outsourcing, the competency required from outsourced company/service changes significantly. The required experience can be summarized in 3 different segments:

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The first level of outsourcing has already happened in majority of the banks with CIT companies starting from Cash-In-Transit, including consumables and usually accompanied with First Line Maintenance. This first group of activities usually require a well trained field workforce covering an extensive geographical area and good know-how on secure operations. In time, CIT companies did a great job of forming such workforce usually with some help from ex-military or security personnel.

The second level requires a workforce who is accompanied by analytical tools on route optimizationcash forecasting, and recently predictive maintenance. In this level, there are a few cases, where these are also outsourced from the bank and a few to the CIT companies. However, there is a additional potential of efficiency, if this is also managed by CIT companies supported by analytical know-how. Most of the additional value comes from two different angles:

9  1) Simultaneous cash replenishment of multiple bank ATMs: When each organization plans their ATM replenishment independently, it is very likely that the CIT company will be making stops to the same location for 1 ATM at a time in different days of the week. 

 

 

 

Coordinating those efforts can reduce the overall cost in the system, and the added margin can be enjoyed by both Banks and CIT organizations. This requires a software approach combining route optimization and cash prediction with a global cost minimization target. When these are separate, in countries where there are fixed replenishment days, there is a missed opportunity in cash cost, and in countries where the replenishment is made with 24h -72h notice to the CIT company, there is a missed opportunity in CIT cost.

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2) Combination of predictive maintenance and route optimization: ATM outages are pain points for everyone; customers, banks, CIT companies alike. Unplanned visits cost much more to banks and they put a major stress on the field operation of CIT companies.

In general, 80% of the outages are equipment related faults and less than 20% are cash outages. New analytical tools enable prediction of likelihoods of the alarms. Hence, there is a potential to provide preventive actions, while CIT company is already at the ATM for cash replenishment. This can significantly reduce unplanned operations and increase uptime for the ATMs.

For the final level of full managed services, customer becomes the bank clients for the managed service operation, and it should be managed like a business with end-customer satisfaction at its core. This requires business knowledge as well as customer knowledge. For example, at this stage the operations responsible for selection of new ATM locations are outsourced as well. This activity is critical for providing a network of convenience to the customers.

11 The CIT companies, being in the field all they has already a live update on where the potential ATM users are.

 

Even in this case, there is added value when the location selection algorithm is combined with route optimization. The overall cost of the operation is significantly reduced if the route cost is a major decision input when locating a new ATM.

 

Even-though no-one disputes the added efficiency to the cash supply chain, in order to become a trusted partner for Financial Institutions, a managed services party has to govern all these different offerings with different expertise that usually exists in different parties. ATM Vendors, BPO companies, software companies and CIT companies are all trying to be the enablers of that added value 3million+ ATMs worldwide. But at the end of the day, ATM business is a field operation, and CIT companies has the advantage of established field force and field know-how compared to the other parties.

However, in order to become a full-fledged managed service partner, they need to make the transition from security focused operations companies to end customer centric, analytical thinking service organizations, without sacrificing the former.

DR. Tolga KURT