by Stefano Cipollone, Business Development Manager at Auriga
Banks are confronted with a challenge that looks impossible to resolve. Even though more customers are opting for cashless alternatives, banks are still expected to provide access to cash. ATM pooling can be a solution to this riddle, as it can offer a way of catering to customer demands, but at an affordable rate. The question is, how can financial institutions deliver on this approach?
What is ATM pooling?
ATM pooling is the transference of the ATM fleet ownership of two or more banks into a separate entity that will operate a shared fleet of ATMs. However, there are different ways of implementing this. The main goals of taking this approach are how banks can maximise the opportunities to rethink and modernise their ATM services, while also reducing operational costs.
What are the challenges?
It can be difficult to make a start on developing ATM pooling initiatives as some agreements may require extra groundwork, especially if it involves rival banks in larger markets.
How to approach ATM pooling
After an agreement has been finalised amongst the banks, how can they use ATM pooling to their own benefit? The main goal should be on how sharing ATM fleets can make managing and securing ATM networks easier, and the reduction of operational costs.
Pooling a network creates an opportunity to review and overhaul where cash machines are located and why. Traditionally sited outside or near branches, ATMs can be relocated to locations that better match current social attitudes and behaviours. Placing ATMs in places like stations or shopping centres where there is greater footfall and demand for cash, for example, serves to provide more convenient access to cash to the majority of the population, and therefore promotes usage and profitability of an ATM.
Being able to reposition ATMs can help banks to respond to public and political demands to continue to provide easy access to cash. For example, in Belgium, the Batopin initiative permits four banks to meet the requirement for an ATM to be placed within five kilometres of 95% of the population.
Batopin is a good example of how ATM pooling is more than just about the reduction of ATM services. It is about looking at the bigger picture and analysing both the geographic and demographic data to highlight the ideal areas for new cash machines. Proof of how this method aims to enhance ATM services, Batopin has said it will install multiple ATMs in spots that have a high demand for supplied access to cash, which will help to minimise queues.
Key advantages
ATM pooling can enable banks to dig into what is the foundation of their ATM fleets and infrastructure. This can include taking a thorough review of how the ATM infrastructure is laid out and explore how the ATM channel can be separated from the technology silo; something that has seriously impeded cost savings and restricted space for creativity in the past. In this respect, ATM pooling can open the door to implementing a modern technology architecture and next-generation infrastructure.
The adoption of a next generation approach to the ATM channel opens up the possibility of greater innovations that go beyond cash withdrawal. For example, new features and services, which could be revenue generating like advertising, marketing and couponing, can be relatively easy to incorporate.
Evolving the initiative
Another feature that could illustrate how ATM pooling can enhance service is the integration of the mobile channel. This gives obvious and immediate benefits for the customer such as a sleek customer experience, quicker transactions, and the ability to leverage the mobile application for a number of other relevant initiatives such as mobile cash withdrawals or payments.
Banks within the pooled networks need to be able to agree on what is really needed to succeed using a long-term strategy, and thus be prepared to select the software required to provide such services. An end-to-end solution that is able to manage all the requirements from ATM pooling implementations can easily evolve into an assisted self-service branch model box where the ATM or the Assisted Self Service Terminal (ASST) replaces the branch by providing a wider range of products and services, and acts as a self-service branch model.
The process of ATM pooling is bound to become more popular as more banks want to reduce costs while seeking to maintain access to cash and services for their customers and the communities they serve. ATM pooling helps achieve these goals through minimising operational costs and helping ATM networks break even or achieve profitability. In areas of the world where the political pressure on this dilemma is spiking, the proven success stories of ATM pooling in some European countries should offer hope to the banking industry. ATM pooling is more than a means to cut costs; as shown by Batopin’s initiative, it can be used to restore ATM networks for the good of the public, and make this channel more relevant in the long run.
