atm benchmarking study 2014 and industry report
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A new report devoted to ATM paymentsTRANSCRIPT
report FEBRUARY 2014
ATM BENCHMARKINGSTUDY 2014 AND INDUSTRY REPORT
ATM Benchmarking Study 2014 and Industry Report
A report based on the
ATMIA Benchmarking Study 2014
Published by
Value Partners Management Consulting Ltd
Kings Buildings, 7th Floor,
16 Smith Square, London SW1P 3HQ, UK
February 2014
Written by
Francesco Burelli, Andrey Gorelikov,
Marco Labianca
If you would like an electronic copy
please write to:
For more information on the issues
raised in the report please contact:
valuepartners.com atmia.com
Copyright ©
Value Partners Management Consulting Limited
All rights reserved
report ATM BenCHMArKInG STUdy 2014 And IndUSTry rePorT
1 ExECUTIvE SUMMARY 5
2 INTRODUCTION 9
3 THE GlOBAl ATM MARKET 13
4 SCOPE OF THE ATMIA BENCHMARKING STUDY 2014 17
5 KEY FINDINGS OF THE ATMIA BENCHMARKING STUDY 2014 19
5.1. CoST MeTrICS And PerForMAnCe MonITorInG 19
5.1.1. TrAnSACTIon ProCeSSInG 21
5.1.2. CASH MAnAGeMenT 21
5.1.3. CoST oF HArdWAre 24
5.1.4. PerForMAnCe MonITorInG 24
5.2. FrAUd And dISPUTe MAnAGeMenT 27
5.3. reVenUe And ProFITABILITy 28
5.4. CoMPLAInT MAnAGeMenT 29
5.5. VALUe Added SerVICeS And MULTIFUnCTIonALITy 31
6 CONClUSIONS 39
CONTENTS
Disclaimer: This report illustrates some of the key general findings of the ATMIA Benchmarking Study 2014 developed jointly by ATMIA and Value Partners, with the addition of industry trends, analysis and commentary from Value Partners.
Participation in the ATM Benchmarking study is strictly confidential and selected examples mentioned in the Value Partners commentary section on industry trends do not necessarily imply participation to the ATM Benchmarking study.
4—5
What is remarkable is the degree to which benchmarking has become associated with organisational improvement in the post-modern era”Dr. J.P. Moriarty, lincoln University, “A theory of benchmarking” 2008
“
report ATM BenCHMArKInG STUdy 2014 And IndUSTry rePorT
WeLCoMe To THIS SeCond rePorT oF ATMIA’S GLoBAL ATM
BenCHMArKInG STUdy. LAUnCHed In 2012, THIS BenCHMArKInG
STUdy’S ArrIVAL WAS eSPeCIALLy reLeVAnT For THe 21ST CenTUry
GIVen THe ConTInUed GLoBALISATIon oF THe ATM IndUSTry And
ITS enTry InTo A dynAMIC neW PHASe oF rePoSITIonInG. THe ATM
TerMInAL IS BeCoMInG THe doMInAnT ToUCH-PoInT SeLF-SerVICe
deVICe For CArdHoLderS And More reCenTLy, For MoBILe PHone
ACCoUnT-HoLderS.
ATM BenCHMArKInG ProVIdeS A BAnK or IndePendenT
ATM dePLoyer WITH A SCoreCArd oF ITS orGAnISATIonAL
PerForMAnCe, MeASUred AGAInST ITS CoMPeTITorS nATIonALLy,
reGIonALLy And GLoBALLy. BenCHMArKInG MeTrICS HIGHLIGHT
AreAS reQUIrInG IMProVeMenT AS WeLL AS CUrrenT
orGAnISATIonAL STrenGTHS, GIVen THe InCreASed STrATeGIC
InTereST In ATMS WITHIn THe BAnKInG SeCTor AGAInST A
BACKGroUnd oF roBUST GLoBAL CASH deMAnd And GroWTH In
ATM SHIPMenTS. THIS rePorT By VALUe PArTnerS For ATMIA IS An
IMPorTAnT reMInder THAT BenCHMArKInG IS A VITAL CorPorATe
TooL For IMProVInG eFFICIenCIeS And STePPInG UP THe LeVeL
oF TeCHnoLoGICAL And SySTeMS InnoVATIon.
AS dr. J.P. MorIArTy oF LInCoLn UnIVerSITy CorreCTLy STATed
In THe 2008 STUdy, A THeory oF BenCHMArKInG: “WHAT IS
reMArKABLe IS THe deGree To WHICH BenCHMArKInG HAS BeCoMe
ASSoCIATed WITH orGAnISATIonAL IMProVeMenT In THe PoST-
Modern erA.”
IT WAS XeroX CorPorATIon WHo PIoneered InTernAL And
eXTernAL BenCHMArKInG In THe 1980S To drIVe ForWArd THeIr
SUCCeSS AFTer THey STArTed To LoSe “FIrST MoVer” AdVAnTAGe
And MArKeT doMInAnCe AS HIGH-QUALITy rIVAL JAPAneSe
ProdUCTS SnATCHed SIGnIFICAnT MArKeT SHAre. dAVId T. KeArneS,
XeroX’S Ceo FroM 1982–1990, onCe deSCrIBed BenCHMArKInG AS
“THe ConTInUoUS ProCeSS oF MeASUrInG ProdUCTS, SerVICeS
And SUCCeSSFUL In-HoUSe QUALITy IMProVeMenT ProCeSS
AGAInST THe ToUGHeST CoMPeTITorS or THoSe CoMPAnIeS
reCoGnISed AS IndUSTry LeAderS.”
FOREWORD
6—7
ATMIA BeLIeVeS THAT THere HAS neVer Been A BeTTer TIMe
For AnnUAL GLoBAL ATM BenCHMArKInG To enSUre THAT ATM
oWnerS STAy AHeAd oF THe CUrVe AS THeIr TerMInAL eVoLVeS
InTo THe doMInAnT SeLF-SerVICe PAyMenT deVICe In THe WorLd.
THe ATM IS eVoLVInG rAPIdLy AS We SPeAK. IT HAS MoVed FroM
A TeLLer-rePLACeMenT TeCHnoLoGy InTo GreATer VALUe
AddInG FUnCTIonALITy, enABLInG MoBILe PHone CredIT, LoAnS,
CoUPonS, BILL PAyMenTS And eVen InTernATIonAL Money
TrAnSFerS. THere IS STILL MUCH To LeArn In THIS TIMe oF GLoBAL
TeCHnoLoGICAL And STrATeGIC CHAnGe; More IMPorTAnTLy,
THere IS STILL MUCH To IMProVe.
BenCHMArKInG reMAInS one oF THe MoST VALUABLe TooLS
In THe CoMPeTITIVe ArSenALS oF ATM dePLoyerS To MeASUre
THeMSeLVeS AGAInST THe BeST. THe PUrPoSe reMAInS THe SAMe
AS IT WAS For XeroX BACK In THe 1980S, nAMeLy, To IMProVe
CoMPeTITIVe eFFICIenCy AS A SoUrCe oF ProdUCTIVITy GroWTH
And To TUrn AroUnd SUB-oPTIMAL ASPeCTS By eMULATInG A
SUPerIor PerForMInG ModeL.
MAy THe 2014 GLoBAL ATM BenCHMArKInG STUdy, THe SeCond
In oUr SerIeS, ConTInUe THe Good WorK In IMProVInG ATM
PerForMAnCe AS oPerATorS rACe To BeCoMe ToP PerForMerS.
MICHAEl lEE Ceo ATMIA
report ATM BenCHMArKInG STUdy 2014 And IndUSTry rePorT
Cash re-circulation assumed a key role
in the reduction of the cost of cash,
benefiting not only the financial servic-
es institutions that adopt them, but the
economy and society at large by reduc-
ing the amount of cash in circulation.
The general findings of the previous
study have been confirmed during the
course of the Benchmarking Study
2014, with significant cost disparities
being outlined across a number of cost
metrics regardless that overall cost
efficiencies appear, in general, to be
improving. Amongst the most impor-
tant findings of the study has been the
highly diverse cost of cash, hardware
and transaction processing for partici-
pants in the survey, despite the broadly
similar nature of ATM operations
globally. once again, little correlation
between the size, location, or type of
ATM operator and their costs was found
in the analysis.
ATMs continue to be one of the main
touch-points for the customers of
financial institutions. Growth rates of the
number of ATMs, transacted volumes
and values are different among the
regions of the world, but mostly exceed-
ing the GdP growth rates, underling the
importance and potential of the ATM
channel. Following the success of its
first ATM Benchmarking Study of 2012,
ATMIA has once again, undertaken a
global ATM benchmarking exercise in
collaboration with Value Partners.
A total of 42 survey respondents have
participated. once again uptake has
seen the participation of some of the
largest ATM operators globally, in-
cluding banks and Independent ATM
deployers, some of which took part at
group level with multiple subsidiaries
submitting their data so benefiting from
intra-group benchmarks and a view
of in-house best-practices. The value
and the interest for such an exercise
was once again confirmed by the fact
that two thirds of the participants of
2012 have joined again this important
ATMIA’s initiative.
ATMs have changed their historical
role of a mere cash dispenser and are
expanding their potential to offer a
wider range of services to banked,
underbanked and unbanked popula-
tions. Available added functionality vary
significantly to a wide range of services
and ATM operators are starting to
implement Value Added Services strate-
gies in a more selective manner than
what was previously outlined during the
course of the previous study.
ExECUTIvE SUMMARY1
8—9
The 2014 study was built upon the
areas in scope of the previous study
and expanded to include areas such as
ATM revenues. This is a highly sensitive
and confidential part of the study but
it is fair to say that not all participants
may have a strategy whereby profits are
generated from the ATM channel.
IAds have the ATM as a main line of
business but for banks, in particular, the
ATM is a channel that is complementary
to other services and often leverages
purely as on a cost-substitution basis.
Profitable or less profitable organisa-
tions are evenly distributed across the
various regions with the imbalance
between costs and revenue appearing
to cause losses that are not necessary
affecting close competitors, likely on
the basis of different management
strategies for ATMs estates between
organisations. nonetheless, this rein-
forces the working hypothesis deriving
from the analysis of the costs sections
that overall there are potential areas
of improvement that are waiting to be
investigated and realised by a number
of ATM operators.
despite the high focus on availability
and on performance management,
it was outlined that few ATM operators
monitor and manage cardholder satis-
faction measures such as those related
to complaint management.
This latter finding potentially points to
opportunity for diversification and com-
petitive advantage that has yet to be
fully explored by the industry at large.
For more detailed conclusions of the
findings of the ATM Benchmarking
Study 2014 please see section 5 of the
report.
report ATM BenCHMArKInG STUdy 2014 And IndUSTry rePorT
Automatic Teller Machines (ATMs)
remain one of the main channels for
the provision of retail banking services.
Their importance is proved by the con-
tinuous growth of the channel in terms
of the number of ATM units installed
and the volume and value of transac-
tions. different regions show different
rates of growth, with a common growth
trend for rates of growth that exceed
GdP growth. This points to the fact that
financial institutions are continuing to
invest in this self-service channel, but
also that retail and SMe consumers
continue to use this important banking
touch-point to access their funds. over-
all, industry research estimates that the
number of installed ATMs units was over
2.75m in 2013, and is forecasted to grow
to over 3.22m by 2016, a 17% increase
over a 3-year period.
The overall value of cash dispensed in
2013 is estimated to $10.47tn,1 with an
increase of 26% over the same time-
frame to over $13.19tn. This cash dis-
pensed through ATMs remains critical to
future cash accessibility and wider glo-
bal economic development, despite the
crucial and growing role that electronic
payment methods will play, and the
increasing penetration and rapid pace
of innovation in the non-cash payments
landscape that will be complementary
to the functions enabled by ATMs.
As outlined in the previous ATM Bench-
marking and Industry report,2 ATMs
increasingly serve more functions than
the simple provision of cash and as a
key touch-point between people and
financial institutions. They realise and
expand their potential to offer a wider
range of services to banked, under-
banked and unbanked populations.
INTRODUCTION2
despite this rapid growth, penetration
and access to ATMs remain unevenly
distributed, as reported by the World-
Bank,3 with South Asia and Sub-Saha-
ran Africa being the regions with the
highest growth, albeit from a very low
baseline.
The ATM industry’s offering has evolved
significantly since its inception in the
early 1960s, becoming a key enabler of
branch innovation, and now evolving in
parallel to internet banking and newly
developing mobile banking channel,
developing its role from a pure teller
substitution / cash dispensing service to
being one of, if not in many cases, the
most important touch-point between a
financial services organisation and its
retail and SMe customers. ATMs keep
providing a low-cost-to-serve channel
to financial institutions for an increasing
number of services ranging from access
to current account funds and informa-
tion, enabling cash and cheque deposits
and now enabling access to a wider
range of services. Within this context,
ATMs keep playing a key role for the
reduction of the cost of cash through
re-circulation, benefitting not only the
financial services institutions that adopt
them, but the economy and society at
large by reducing the amount of cash in
circulation.
1 Source: Timetric 20142 ATMIA and Value Partners, ATM Benchmarking Study 2012 and Industry report3 Source: Global Partnership for Financial Inclusion, financial inclusions indicators 2014
0
500
1,000
1,500
2,000
2,500
3,000
3,500
20072006 2008 2009 2010 2011 2012 2013 2014 2015 2016
+8%
+6%
06-16CAGR
3%
4%
12%
6%
12%
0
20,000
10,000
30,000
40,000
50,000
60,000
70,000
80,000
20072006 2008 2009 2010 2011 2012 2013 2014 2015 2016
4%
06-16CAGR
6%
21%
4%
13%
+12%
+6%
NuMBer of ATMS, 2006-16 (‘000)
NuMBer of ATM TrANSAcTIoNS, 2006-16 (MlN)
Source: Timetric 2014
report ATM BenCHMArKInG STUdy 2014 And IndUSTry rePorT
Following the success of its first ATM
Benchmarking Study 2012, and on the
feedback received from the organisa-
tions that took part to the former exer-
cise, ATMIA has once again, undertaken
a global ATM Benchmarking exercise
in collaboration with Value Partners.
Approximately 65% of the banks and
independent ATM deployers (IAd) that
took part to the 2012 study participated
again to this second round, and were
joined by others to a total 42 survey
respondents, some of which participat-
ed through subsidiaries from multiple
countries.
of these, around 65% are based in
mature economies and 35% in emerging
or transitioning economies. Similar to
the previous round of ATM Benchmark-
ing, the vast majority of responses to the
general invitation to participate came
from some of the largest ATM operators
globally, including banks and IAds.
Although some of the insights from the
survey and its general conclusions have
been included in this report, the full
findings of the benchmarking study are
exclusively available to respondents.
North America South&Central America Middle East & Africa Europe AsiaPacific
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
12,000
13,000
14,000
20072006 2008 2009 2010 2011 2012 2013 2014 2015 2016
2%
06-16CAGR
12%
21%
7%
16%
+13%
+9%
VAlue of ATM TrANSAcTIoNS, 2006-16 ($BN)
North America
Europe
EastAsia&Pacific
Latin America & Caribbean
Middle East & Africa
South Asia
Sub-Saharan Africa
2%
04-12CAGR
27%
63%
17%
5%
4%
7%
0
10
20
30
40
50
180
190
200
210
220
200720062004 2005 2008 2009 2010 2011 2012
GloBAl ATM NuMBerS (per 100,000 ADulTS)
Source: World Bank, eCB, Value Partners analysis
report ATM BenCHMArKInG STUdy 2014 And IndUSTry rePorT
THE GlOBAl ATM MARKET
3
4 ATM Benchmarking Study 2012 and Industry report
The number of ATMs installed globally
has grown rapidly at a rate of 8% CAGr
of the installed base between 2006
and 2012. The growth rate is expected
to remain high at a CAGr of 6% between
2012 and 2016. While this may be
wrongly seen a slow-down in a pace of
growth that is outstripping that of GdP,
it is an indicator that some markets
might have reached saturation.
While this may be a credible working
hypothesis for some countries,
there is still significant disparity in the
availability and access to this channel, as
highlighted by World Bank statistics.
overall, the African and Asia-Pacific
regions are driving growth, with north
America growing at a slower pace of 2%
CAGr between 2004 and 2012.
Africa and Asia-Pacific contribute the
largest part of overall ATM unit growth,
driven by a combination of population
growth, economic development and
a rollout of financial services which is
pushing demand for non-branch ac-
cess to cash, financial information and
other services. As highlighted in the ATM
Benchmarking report 2012, the role
of the ATM channel has changed from
that of a mere cash dispenser to being
in many cases, the primary channel for
retail financial services.
Compared to the findings of two years
ago, there are earlier signs of a refine-
ment of the services offered through the
channel. Mobile penetration, together
with the increasing access to financial
services and financial education, are not
only changing the role of the ATM but
also expanding the role of cards (and
mobile handsets). ATM functionalities
are evolving from being a simple instru-
ment providing access to cash outside
of bank working hours to a means
for customers to access a much wider
range of services offered by banks,
and in few cases in partnerships with
governments.
It was reported in the previous edi-
tion of the ATMIA ATM Benchmarking
Study and Industry report that in 2009
the number of ATMs exceeded the
number of bank branches in low-income
countries.4 over the last two years, the
installation of ATM units has increased in
all countries across all regions, includ-
ing north America, which has shown an
increase of 3% CAGr between 2006 and
2012. In comparison, europe’s installed
base grew by 6% CAGr in the same
period, both the Middle east and Africa
and Asia Pacific by 12% and South and
Central America by 4%.
All rates are higher than GdP growth
for the same period in each respective
region. Similarly, in all regions,
the growth value of cash withdrawals
has been in line with or in excess of
inflation rates, suggesting that consum-
ers are increasing the use of the ATM
channel to access funds.
AUSTRAlIA CHINA
20
08
20
09
20
10
20
11
20
12
20
08
20
09
20
10
20
11
20
12
1,000 12,000
0
0% 0%
1% 1%
2% 2%
3% 3%
4% 4%
5% 5%
0
800 10,000
50 5,000
6008,000
100 10,000
4006,000
150 15,000
200
4,000
2,000
0 0
200 20,000
+22%
+30%
2008 2009 2010 2011 2012
5,175
5,269
6,358
6,722
8,359
9,187
10,313
12,352
11,453
15,264
-1%
0%
2008 2009 2010 2011 2012
870
154
563
156
851
155
844
154
827
152
MIL
LIo
nS
MIL
LIo
nS
Cn
y B
n
AU
d B
n
GDP growth (annual %)
Inflation,consumerprices (annual %)
Householdfinalconsumption expenditure (annual % growth)
TrANSAcTIoNS per Type of TerMINAl: ATM VS. poSDyNAMIcS of cASh wIThDrAwAlS AT ATM VS SelecTeD ecoNoMIc TreNDS
Source: WorldBank, BIS, Value Partners analysis
report ATM BenCHMArKInG STUdy 2014 And IndUSTry rePorT
While general terms are valid pointers,
it is to be noted that different countries
may see different ATM channel dynam-
ics, regardless of broadly similar positive
economic conditions. Ultimately, the
unique characteristics of the infra-
structure in each country, the country’s
consumer payment habits and the
dynamics of its domestic retail bank-
ing industry drive very different type
of mutations in the development of the
channel and its leverage by consumers
and bank alike. For example, looking at
two large economies in the Asia Pacific
region, China and Australia, the trends of
the number of cash withdrawals at ATMs
are very different, despite both countries
experiencing positive GdP growth, low
inflation and growth in household final
consumption expenditure.
This ATM growth in developing econo-
mies, especially in the Asia-Pacific
region, means that those countries often
lead the way in terms of the value added
offerings available at ATMs, but as time
goes by and ATM acquirers in other
parts of the world continue to extend
the functionality of their ATM portfo-
lio, this is less likely to be the case. In
general, Asia remains the global leader
in terms of cash recycling, for example,
while countries in which ATMs are an
established and widespread channel are
facing a country-wide wave of upgrades
due to the transition to eMV compliant
technology. The practice of extending
the working life of older units beyond
their depreciation period remains, de-
spite ongoing innovation in the channel.
The ATM market continues to grow
globally, in terms of the quantity of
ATMs proportional to the population,
in the volume and value of transactions
captured through the channel and in
the quantity and quality of services
on offer. Mobile and online channels,
along with PoS terminals, are evolving
to complement rather than displace the
role of ATMs as a key financial services
channel. ensuring the availability, reli-
ability and quality of services remains
a key driver for the success of the retail
banking industry: “the second most
common means of access in the past 12
months was via an ATM or online bank-
ing, both at 74%” of respondents to the
Federal reserve Board’s survey.5 This is
in line with a number of similar findings
and statements from other sources
confirming the importance of ATMs
for the retail banking industry, even in
an online banking context, with 53% of
online banking customers identifying
ATM access as a key choice criteria in
choosing a bank, more than double the
next most important criteria.6
5 Board of Governors of the Federal reserve System, Consumers and Mobile Financial Services 2013, March 20136 Compete.com
Source: eMVco, MasterCard, Visa, American express, Value Partners analysis
81%
15%
94%
68%81%
16%
95%
73%
2011 20112011 20112012 20122012 2012
+20%
+36% +4%
+2% +1%
+2%
41%
77%
49%
79%
2011 20112012 2012
21%
76%
29%
77%
2011 20112012 2012
26%
50%
27%
51%
2011 20112012 2012
0%
+3%
0%
+7%
EMV Cards
EMV Terminals
Canada,LatinAmerica & the Carribbean
United States (data not available)
Africa & the Middle East
AsiaPacific
Europe Zone 1 (Western & Central Europe)
Europe Zone 2 (Eastern Europe)
GloBAl eMV coMpleTIoN of cArDS AND TerMINAlS (INcluDING ATMS AND poS TerMINAlS)
report ATM BenCHMArKInG STUdy 2014 And IndUSTry rePorT
SCOPE OF THE ATMIA BENCHMARKING STUDY 2014
4
during 2013, Value Partners, in partner-
ship with ATMIA, collected statistics from
42 ATM operators, in order to expand,
update and build upon the insightful uti-
lisation and cost benchmarking baseline
developed previously. Sixteen of these
responses were from europe, ten from
Asia, five from Middle east and Africa
and eleven from the Americas.
In addition to these detailed responses,
a purely qualitative questionnaire
was completed by a further four ATM
operators. The second round of Bench-
marking built on the categories and
metrics of the first round with expanded
detail for the Value Added Services
and Fraud sections and with the
addition of revenue and Quality
of services sections.
Anonymous data was gathered in the
following areas of ATM management:
• General estate Statistics (e.g. the
size and offering of the respondents’
ATM estate)
• Cash Management (e.g. replenish-
ment and reliability information)
• Transaction Management
(e.g. transaction costs and data
transmission figures)
• ATM performance monitoring
(e.g. costs of performance monitor-
ing)
• estate Management (e.g. hardware
statistics and malfunctioning figures)
• Fraud, Crime & dispute (e.g. frequen-
cy and cost of ATM crime)
• revenues (e.g. fees and commis-
sions)
• Quality of services (e.g. customer
complaint management policies and
statistics)
Statistics collected from 42 ATM operators, in order to expand, update and build upon the insightful utilisation and cost benchmarking baseline developed previously in 2012
18—19
The purpose of this survey was to pro-
vide participants with renewed insights
into the performance and cost structure
of their ATM estates with the additional
detail on revenue and profitability indi-
cators and with more comprehensive
insights into the Value Added Services
and Fraud management and prevention.
The value of such insights is especially
important as ATMs are proving to be
a much needed channel for Financial
Institutions as well as representing
a profitable business line. With cost
controls being kept high on the agendas
of all financial institutions in particular in
times of more accurate capital allocation
due to tighter compliance requirements,
such a capital intensive channel that is
also central to customer interaction, will
benefit from an objective view of per-
formance and a way to compare against
industry best-practices.
YES NO
of the newly participating organisa-
tion less than half were already making
industry comparisons prior to joining
the ATMIA ATM Benchmarking study,
proving, once again, the interest and the
value of such type of exercise for ATM
operators.
Some of the statistics gathered are
included in the report below on a “base
100 normalised index” basis. Some
graphs and statistics include most of the
sample, but not all of the 42 respond-
ents, since some submissions were not
fully completed. others, meanwhile,
reflect findings from the full sample.
The underlying philosophy of the exer-
cise is that through such cooperation
the ATM industry, together with ATMIA
and domestic banking communities will
be able to provide pointers that lead to
improved efficiency and performance.
By leveraging the data and information
shared, service quality can be improved
whilst reducing operating expenses,
all the while ensuring the protection of
sensitive information and competitive
advantages.
Source: ATMIA Benchmarking Study 2014, Value Partners analysis
Do you MAke reGIoNAl or NATIoNAl coMpArISoNS wITh ANy coMpeTITor or SIMIlAr operATor?
0% 100%
report ATM BenCHMArKInG STUdy 2014 And IndUSTry rePorT
KEY FINDINGS OF THE ATMIA BENCHMARKING STUDY 2014
5
7 Source: KL Guide, ATM Software Trends and Analysis, 6th edition, 20138 Asian Banker research, 2011, ‘Understanding the cost of handling cash in Asia Pacific Building an integrated cash supply chain to improve cash handling efficiency’
5.1. cost metrics and performance monitoring While ATM operators were especially
keen to bring down expenditure in a pe-
riod of economic crisis, despite the signs
of economic recovery in many markets,
financial institutions are now facing the
challenge of tighter capital regulatory
requirements. Cost control has always
been an important area of focus for all
parts of the banking industry and this
keeps being of particular importance in
the capital intensive ATM industry. Cost
efficiency is a key requisite to profitably
operate a business within a channel
that absorbs a relatively higher liquidity
compared to other business lines of the
financial services industry.
Cutting operational costs is by far the
most critical change as highlighted
by the 2013 ATM Software Trends and
Analysis report7. Improving functional-
ity for the customer was the second,
followed by integration with other
self-service channels. In light of this, the
comparison of cost indicators across
the 2012 and 2014 benchmarking study
is pointing to an indicative, general cost
reduction of about 7-8% on average.
After investigating such cost perform-
ance improvements, participants appear
to have benefitted by technology up-
grades, modernisation of ATM portfolios
and an overall refinement of manage-
ment practices.
one of the key findings of the previous
ATMIA ATM Benchmarking Study 2012
consisted in outlining the lack of cost
advantage provided by economies of
scale in this channel.
This counterintuitive conclusion sug-
gested that ATM operators were not
able to fully leverage scale to drive
cost efficiency and that there was a
significant potential for optimising ATM
operations. The instances in which the
lack of correlation was outlined during
the course of the previous study match
the findings of this second benchmark-
ing exercise.
5.1.1. Transaction processingAlthough management theory assumes
that the size of operations is one of
the most critical drivers for variable
unit cost, such as processing, as a
result of economies of scale, this was –
once again - not found to be the case
amongst the respondents to the ATMIA
Benchmarking Study 2014.
This is also in line with Value Partners’
experiences in the card issuing and PoS
acceptance industries, again, proving
to be the case in the ATM industry.
once again, there are a number of
potential explanations for this, ranging
from contract management to a lack
of price transparency from vendors
and, in some markets, competitiveness
with regards to alternative processing,
platform providers and outsourcers.
Labour also remains a prominent cost
for ATM operators, especially in mature
markets where technology outsourc-
ing and process streamlining have
already reduced costs such as machine
downtime8. Automated fault-detection
systems, integrated servicing and re-
plenishment schedules and centralised
ATM software environments continue to
be potential ways in which ATM opera-
tors may control their costs.
CO
ST
PE
R T
RA
NS
AC
TIO
N
Note: average of transaction = 100
Source: ATMIA Benchmarking Study 2014, Value Partners Analysis
NUMBER OF TRANSACTIONS
coST per TrANSAcTIoN VS. NuMBer of TrANSAcTIoNS
report ATM BenCHMArKInG STUdy 2014 And IndUSTry rePorT
5.1.2. cash managementCash, together with the cost of hard-
ware, and increasingly the cost of
security and fraud prevention, remains
one of the major cost components of
an ATM business. A key opportunity to
reducing costs lies in enhanced cash re-
circulation functionalities while accurate
forecasting of cash demand, ensuring
that ATMs are provisioned with the
right amount of cash needed, remain
key drivers of cost efficiency as well as
ensuring ATM availability and avoidance
of out-of-cash downtime.
differently from the findings of the
previous Benchmarking study, this time
participants appear to adopt increas-
ingly in-house intelligence for cash
forecasting purposes with the use of
forecasting software remaining widely
used. This difference compared to the
previous study is driven not only by new
participating organisations but also by
changes within cash forecasting practic-
es of few ATM operators that took part
in both rounds of the ATM Benchmark-
ing study. Some companies surveyed do
not perform cash demand forecasting
at all, implying that significant improve-
ments could be made in the manage-
ment of cash in the ATM system.
Source: ATMIA Benchmarking Study 2014
Similarly to the findings of the ATMIA
Benchmarking Study 2012, this study
found that ATM operators continue
to have different approaches to cash
replenishment, with the frequency of
replenishment being inversely propor-
tional to the amount reloaded and the
float stored within the ATM. In analysing
the frequency of cash replenishment,
after normalising the data to take into
account the economic characteristics
of each participant’s economy, ATM
locations and geographical dispersion
across each participant’s country, a
number of common trends emerged:
• ATMslocatedwithinbankbranches
are typically loaded more often
• DifferentATMlocationstendtobe
replenished to different levels of float
• Countrieswithlowerincidenceof
attacks to ATMs and ATM theft tend
to have high amounts of float
• Replenishmentvalueandfrequency
can vary significantly according to
the geographical dispersion of ATM
locations
For this latter point the survey recorded
a variety of behaviours, whilst showing
similarities amongst participants from
the same country, region or size and
type of operator, are far from homoge-
nous globally. More generally, the survey
found cases of very different cash refill-
ing approaches even amongst directly
competing ATM operators. In particular,
during the course of this study and
differently from the previous find-
ings, these differences appeared to be
predominantly driven by the approach
towards reducing potential losses in case
of ATM theft. This is once again based on
the assumption that less cash stored at
the ATM leads to lower losses in the case
of a criminal attack.
0% 100%
FORECASTING SOFTWARE
IN-HOUSE INTEllIGENCE
DO NOT PERFORMCASH DEMAND FORECASTING
how Do you perforM cASh DeMAND forecASTING?
Source: ATMIA Benchmarking Study 2014, Value Partners Analysis
coST of repleNIShMeNT eVeNT VS. AVerAGe NuMBer of repleNIShMeNT eVeNTS per yeAr per ATM
CO
ST
OF
RE
Pl
EN
ISH
ME
NT
Ev
EN
Tv
Av
ER
AG
E v
Al
UE
OF
CA
SH
HE
lD
IN
AN
AT
M
AvERAGE NUMBER OF REPlENISHMENT EvENTS PER YEAR PER ATM
AVerAGe VAlue of cASh helD IN AN ATM VS NuMBer of repleNIShMeNTS per ATM per ANNuM
Note: Base 100 normalised index
(-)r2 = 0,55
AvERAGE NUMBER OF REPlENISHMENT EvENTS PER YEAR PER ATM
report ATM BenCHMArKInG STUdy 2014 And IndUSTry rePorT
once again few instances of cash
replenishment behaviour were investi-
gated with the conclusion that, some-
times the cost of the more frequent
reloads exceeded the cost of total
losses incurred.
Source: ATMIA Benchmarking Study 2014, Value Partners Analysis
It is to be noted that while this observa-
tion is analytically relevant, it is also im-
portant to note that crime against ATMs
appear to be perpetrated sometimes in
a consistent but near-random manner,
incentivising ATM operators to focus on
preventing and minimising losses rather
than adopting risk-weighted approaches.
Cash recirculation is far from being the
norm and ATM replenishment remains a
key area in which effective management
can keep costs to a minimum and main-
tain maximum reliability. differently from
the participants to the previous round
of benchmarking when cash recircula-
tion was a feature resulting hardly in use
by ATM operators, this study has found
that over 17% of the participating sample
benefits from cash recirculation.
overall cost of cash must take in account
the opportunity cost of cash that is de-
pendent upon the amount of cash locked
in cassettes and vaults and upon the
cost of the liquidity. This is sometimes
calculated as a weighted cost of capital
but more often consists of an internal
transfer rate from the central treasury
unit or from a third party lender. In the
case of the previous study the findings
outlined that cash provided by a third
party can be cheaper than that provided
by treasury. However, in this case the
variance, netted from interest base line
differences, is less wide than that found
during the previous study.
The previous graph shows that, in line
with the findings of 2012, that the more
replenishments the lower the cost of
each individual replenishment, with a
group of high frequency replenished
ATMs representing in-branch estates.
As in the previous case more remote
locations with an higher cost of cash re-
plenishment because of travel distanc-
es, however, may potentially providing a
case for considering the deployment of
ATM recirculating units.
Do The ATMS IN your NeTwork TAke DepoSITS? If yeS, whAT proporTIoN?
<20%
20%-40%
40%-60%
>60%
Are you coNDucTING pIloTS reGArDING The IMpleMeN-TATIoN of full cASh recy-clING cApABIlITy IN your ATM NeTwork?
coMpArATIVe opporTuNITy coST of cASh (ceNTrAl BANk INTereST rATe = 100, MAxIMuM AND MINIMuM rANGeS ShowN)
100%
+83.7.3%
-81.6%
INTERNAlTRANSFER RATE
3RD PARTY lENDER
100%
+105.3%
-47.3%
YES
NO
YES
NO0% 0%
100% 100%
24—25
5.1.3. cost of hardwareHardware is the major cost compo-
nent for ATM operators. Similarly to
the previous study, the benchmarking
study recorded significantly different
approaches to depreciation, the exten-
sion of the useful life of ATM hardware
and vendor management. The majority
of operators are opting for a multiven-
dor policy. Hence, one would assume
that this would lead to a high level of
competitiveness in the ATM market and
a narrow range of ATM unit costs. once
again, this was not the case as the cost
of ATM units varies greatly between
participants.
From the benchmarking sample the
cost of hardware was found to have
little correlation with the type, size and
location of the organisation.
5.1.4. performance monitoringPerformance monitoring is composed
of a number of activities that are critical
to the ATM business and in some cases
concern nearly all aspects of ATM oper-
ations, from activity monitoring to cash
management and fraud prevention. er-
ror monitoring largely takes place in real
time but performance monitoring is an
activity that is deployed through varied
approaches to monitoring the ATM
estate with the aim to maximise uptime
and performance.
once again the majority of surveyed
ATM operators produce internal per-
formance monitoring reports on a daily
basis, although some appear to opt for
monthly updates on the performance of
the ATM estate.
coST of hArDwAre (AVerAGe = 100)
ATM HARDWARECOST
100
+131.8%
-17.5%
Source: ATMIA Benchmarking Study 2014, Value Partners Analysis
whAT IS your VeNDor polIcy? If you hAVe A MulTI VeNDor polIcy, how MANy VeNDorS Do you uSe?
0%
100%
SINGlEvENDOR
MUlTI vENDOR
0% 100%
frequeNcy of perforMANce MoNITorING
reporTS proDuceD
Hourly Daily Weekly Monthly
OUTCOURCED
AUDITS
REAl TIMEMONITORING
0% 80%
whAT MeThoDS Do you uSe To IDeNTIfy errorS AT ATMS?
2
3
report ATM BenCHMArKInG STUdy 2014 And IndUSTry rePorT
YES
NO
differently from the previous sample,
this time around, few participating or-
ganisations are monitoring the perform-
ance of their ATM estate on an hourly
basis, frequency that would appear to
be connected to higher availability.
In terms of the parties directly responsi-
ble for the creation of ATM performance
reports, it seems that this sample makes
less recourse to outsourcing with one
organisation in particular in-sourcing its
performance monitoring which during
the course of the previous ATM Bench-
marking Study was provided by a third
party provider.
Are you plANNING ANy INVeSTMeNT To IMproVe/upGrADe your MoNITorING cApABIlITy? If yeS, pleASe SpecIfy
during the course of this ATM Bench-
marking study, the majority of ATM
operators do not appear to be planning
to improve their monitoring capability,
largely through investment in software.
overall, the survey found a relationship
between more frequent and accurate
monitoring and better network
performance (downtime / uptime)
and pointed towards a potential
association between a more detailed
approach to performance management
and lower operating costs, cash man-
agement and transaction processing
costs in particular.
Source: ATMIA Benchmarking Study 2013, ATMIA Benchmarking Study 2014, Value Partners Analysis
0% 100%
NONE (OUTSOURCED)
PERFORMANCE OF OUTSOURCED ATM MANAGEMENT
ATM UPTIME
PROBlEM HANDlINGAND RESPONSE TIMES
TRANSACTION DATA
TYPE OF FAUlT
Infrastructure upgrade
Software investment
Monitoring system for multi-vendor network
whAT MeTrIcS/DATA Do you collecT ASpArT of your perforMANce MoNITorING?
0% 100%
OUTSOURCING IN-HOUSE
whAT IS your ApproAch To perforMANce MoNITorING?
0%
100%
frAuD, crIMe AND DISpuTe – SecurITy MeASureS
Source: ATMIA Benchmarking Study 2014, Value Partners Analysis
0%
100%
100%
0%
% oF FLeeT CoVered By SeCUrITy MeASUre
% oF PArTICIPAnTS HAVInG SeCUrITy MeASUreS In PLACe
BU
IlD
ING
Al
AR
MS
CC
Tv
CO
vE
RA
GE
TR
AN
SA
CT
ION
EN
CR
YP
TIO
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EA
SU
RE
S/M
AC
IN
AN
TI-
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BO
ll
AR
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AN
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IMM
ING
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ME
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EN
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AT
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CA
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/ME
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A M
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AT
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MO
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AN
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EN
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IBl
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PA
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S (
PA
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) A
T A
TM
S
report ATM BenCHMArKInG STUdy 2014 And IndUSTry rePorT
5.2. fraud and dispute managementFraud is and will remain a serious chal-
lenge to the industry and is an area
in which all participants appear to be
investing significantly. The amount of
investment is not yet at the same level
as those absorbed by the estate invest-
ment or by cash float, but is increasing
rapidly versus other operational costs.
once again, the survey found a high
level of variability between the levels
of fraud experienced by respondents
with most organisations participating to
both rounds of benchmarking, reporting
higher fraud losses.
DISpuTe AND frAuD STATISTIcS(AVerAGe = 100, MAxIMuM AND MINIMuM rANGeS ShowN)
COSTPER DISPUTE
NUMBEROF DISPUTECASES PER
TRANSACTION
While disputes can originate from
causes other than fraud (e.g. card-
holder errors, processing errors, etc.),
the analysis has outlined a correlation
between the number of fraud cases
and the number of disputes and their
respective unit cost.
once again, on the basis of the data
analysed during the course of this
round of benchmarking, fraud is – to-
gether with malfuctionings - appearing
to be a key driver of dispute cases and
their associated costs.
100 100
+46.9%
+166.4%
-85.6%
-95.9%
Do you hAVe oTher SecurITy MeASureS IN your reAl eSTATe?If yeS, how MANy?
YES 1-3
+10
0%
100% NO
NuMBer of frAuD cASeS per ATM
0%
100%
AT
MIA
BE
NC
HM
AR
KIN
G
ST
UD
Y 2
012
AT
MIA
BE
NC
HM
AR
KIN
G
ST
UD
Y 2
014
28—29
5.3. revenue and profitabilityThe ATMIA ATM Benchmarking study
2014 expanded from the pure cost
focus of 2012 to include revenues.
This is a highly sensitive and confiden-
tial part of the study but it is fair to say
that not all participants may have a
strategy whereby profits are generated
from the ATM channel.
IAds have the ATM as a main line of
business but for banks, in particular, the
ATM is a channel that is complementary
to other services and often leverages
purely as on a cost-substitution basis.
While the vast majority of participants
have not provided a breakdown of
revenues by services (e.g. withdrawal,
mobile top-up, etc.) the vast majority
supplied revenue figures for transac-
tion and cardholder fees that have been
used to calculate the pro-forma profit-
ability of the ATM estates.
Source: ATMIA Benchmarking Study 2014, Value Partners Analysis
AvERAGETRANSACTION
MARGIN
100
+424.6%
-192.4%
TOTAlMARGIN
100
+438%
-44.5%
Profitable or less profitable organisa-
tions are evenly distributed across the
various regions with the imbalance
between costs and revenue appearing
to cause losses that are not necessary
affecting close competitors, likely on
the basis of different management strat-
egies for ATMs estates between organi-
sations. nonetheless, this reinforces the
working hypothesis deriving from the
analysis of the costs sections that on
the whole, potential areas of improve-
ment are waiting to be investigated and
realised by a number of ATM operators.
Where losses have been seen, in gener-
al, overall cash withdrawal transaction
margins continue to result in a slightly
wider range than the total marking of
the ATM product line. In many cases, the
losses of cash withdrawals are balanced
by margin origination from value added
services that are seen to be dragging
the overall economic performance of
a couple of estates back into positive
from a distinct loss making position.
The majority of ATM operators, do not
account for on-us transactions with an
internal transfer price, de-facto penalis-
ing the economic performance of their
ATM estate while providing a nominal
cost advantage to their ATM portfo-
lio. While it appears to be a common
practice, it distorts the actual financial
results of the ATM and debit card busi-
ness units.
AVerAGe TrANSAcTIoN profITABIlITy STATISTIcS (AVerAGe = 100, MAxIMuM AND MINIMuM rANGeS ShowN)
report ATM BenCHMArKInG STUdy 2014 And IndUSTry rePorT
Source: ATMIA Benchmarking Study 2014, Value Partners Analysis
5.4. complaint managementATM operators are investing considera-
bly in performance monitoring activities,
mostly with the aim to maximise ATM
availability and avoid downtime.
While most participants monitor and
manage the performance of their ATMs
through a variety of ATM reports,
only few - about a quarter of the total
number of participants - collect data on
complaints from card-holders. of these,
the vast majority has implemented a
formal complaint handling policy.
This latter include the option of a formal
compensation for the lack of service to
disgruntled cardholders.
pArTIcIpANTS collecT DATA oN coMplAINTS
Do you hAVe A coMplAINT polIcy?
IS coMpeNSATIoN offereD?
0% 0%
100% 100%
YES
YES
NO
YES
NO
NO
over half of recorded complaints
appear to be originating from card
captured due to an ATM malfunction
and just over a quarter is due to cash
not dispensed despite the account
being debited due to a malfunction.
As a channel there is great effort be-
ing invested to ensure availability and
avoiding poor service but, data appears
to indicate that very few ATM opera-
tors are taking in account factors like
customer satisfaction.
The analysis did not venture into inves-
tigating the rationale for such a choice
but the findings have outlined that
there may be an untapped opportunity
to leverage customer satisfaction as a
source of competitive advantage.
This would need to be investigated and
validated based on the competitive
landscape and characteristics of each
estate.
COMPLAINTS MANAGEMENT
Source: ATMIA Benchmarking Study 2014, Value Partners Analysis
CArd CAPTUredATM MALFUnCTIon
CASH noT dISPenSedA/C deBITed
ATM MALFUnCTIon
CArd CAPTUredISSUer reQUeST
ATM oUT oF order
oTHer
TrAnSACTIon SLoW or InCoMPLeTeCoMMUnICATIonS MALFUnCTIon
PrICInG CoMPLAInT
CASH reTrACTed
proporTIoN of coMplAINTS receIVeD per yeAr
CASH noT dISPenSedA/C noT deBITedATM MALFUnCTIon
CASH noT dISPenSedCUSToMer error
report ATM BenCHMArKInG STUdy 2014 And IndUSTry rePorT
5.5. Value added services and multi-functionalityThe role of the ATM channel continues
to change. That was one of the five
general conclusions from the previous
ATM Benchmarking Study and it is a
trend that emerged even strongly dur-
ing second exercise. The role and the
range of functionalities that are being
offered through the ATM are fundamen-
tally changing the nature of the chan-
nel. This is because as many customers
interact with their financial institution
increasingly via the ATM as well as
other self-service touch-points, the user
experience of ATMs itself is keeping
being re-designed around a self-service
concept.
Increasing consumer familiarity with
digital interfaces driven by the growing
uses of smart phones and tablets is one
of the key enablers that are accelerat-
ing the potential changing role of ATM
estates.
Compared to the previous study, the
current analysis outlined two key trends
in regards to multi-functionality:
I. Multi-functionality is – in most
cases – becoming the norm
II. ATM operators are starting
to select the services they wish
to offer through their estates
ATM advertising functionality continues
to be common throughout all geogra-
phies. Message personalisation is now a
growing feature that is offered in over
50% of the cases, about twice as much
compared to the findings of the previ-
ous ATM Benchmarking study.
Advertising initiatives on ATM are grow-
ing by as much as 13% year-on-year,
being perceived by bank institutions
and advertisers “as a more effective and
efficient way of advertising than direct
mail/email and any other standard form
of advertising”. Indeed, according to
nCr Inc., ATM adverts are 65% less
expensive and 200% more effective
than direct mail.
Cash withdrawals and mini-statements
are thus no longer the only services that
an ATM operator can offer to customers
but, based upon the findings from the
analysis, they remain the predominant
service demanded by ATM users.
Source: Press, Company websites
TypeS of ATM ADVerTISING
DIRECT MARKETING
3RD PARTY ADvERTISING
COUPONING
% oF PArTICIPAnTS, oFFerInG A SerVICe
Within the next year Within the next 5 years Not planning to add service Services declared planned to be dismissed by some participants
VAlue ADDeD SerVIceS
0%
100%
100%
0%
% oF FLeeT CoVered By SeCUrITy MeASUre
BA
lA
NC
E E
Nq
UIR
IES
PR
INT
ED
RE
CE
IPT
S
PIN
SE
Rv
ICE
S
MIN
I S
TA
TE
ME
NT
S
MO
BIl
E T
OP
-UP
S
AC
CO
UN
T T
RA
NS
FE
RS
BIl
l P
AY
ME
NT
S
INT
El
lIG
EN
T D
EP
OS
IT
DY
NA
MIC
CU
RR
EN
CY
CO
Nv
ER
SIO
N F
OR
TO
UR
IST
S
CH
AR
ITY
DO
NA
TIO
NS
OT
HE
R
CO
UP
ON
ING
CA
RD
lE
SS
WIT
HD
RA
WA
l
PE
RS
ON
TO
PE
RS
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RE
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ES
(IN
ITIA
TE
D)
PE
RS
ON
TO
PE
RS
ON
RE
MIT
TA
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ES
(C
Ol
lE
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ED
)
PA
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EN
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Ax
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/FIN
ES
lO
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DS
Fx
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MIT
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ES
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report ATM BenCHMArKInG STUdy 2014 And IndUSTry rePorT
Source: ATMIA Benchmarking Study 2014, Value Partners Analysis
Do pArTIcIpANTS ADVerTISe oN BehAlf of 3rD pArTIeS?If No, why?
YES
NO
YES
NO
Generic
Cardholder-specific
Split between ‘on us’ and ‘not on us’ customers
Incompatible technology
Company Policy
Other
This trend toward multifunctionality is
not limited to mature ATM markets, but
is common throughout geographies. As
this trend continues, the two potential
challenges highlights in the previous
ATM Benchmarking Study 2012 are
starting to be addressed by ATM opera-
tors. The first is related to cost man-
agement, with the increase in available
services requiring a constant review of
how to best optimise ATM expenditure.
The second is complexity, with mul-
tifunctionality necessarily involving
connections with 3rd party telecom-
munication networks, with all the
interoperability and reliability issues this
implies.
The current study analysed a shift in
multi-functionality trends compared to
two years ago; after that most par-
ticipating organisations having imple-
mented functionalities that were on
their wish lists during the course of the
previous study.
nowadays attention and plans are be-
ing paid to fewer value added services
and with ATM operators starting to
selectively dismiss a few services, in a
drive to optimise queues at ATM or that
are not profitable or not taken up by
consumers as expected.
CASH WITHDRAWAl WITHBAlANCE ENqUIRY
CASH WITHDRAWAl ONlY
BAlANCE ENqUIRY ONlY
OTHER
Do pArTIcIpANTS uNDerTAke SAleS or MArkeTING?If yeS, whAT Type?
whAT Are The MoST populAr or frequeNTly TrANSAcTeD SerVIceS?
VALuE AddEd SERVICES – AdVERTISING
0%
0%
100%
100%
0% 80%
34—35
CONClUSIONS6
Similarly to the previous study, the ATM
Benchmarking Study 2014 has provided
participants with an insight into key
performance metrics of their respective
ATM estates. While the findings specific
to each participants are confidential to
participating organisations, there are
a number of general conclusions that
have been developed during the course
of the analysis. These do not contradict
but, on the contrary build upon the
findings of the previous Benchmarking
Study.
The conclusions are:
• Economiesofscaleare(still)nota
source of competitive advantage
once again it was found that a larger
scale does not necessarily result in
lower unit costs. While, in general
terms costs have been decreasing
relatively to the previous ATM
Benchmarking study, there is still
no correlation between scale and
cost efficiency. once again no single
operator has emerged as an obvious
best performer amongst all partici-
pants.
• Fraudisagrowingchallenge
Fraud is a growing challenge to the
industry and ATM operators are
increasing their efforts to prevent
and combat it. Investment in fraud
prevention measures is increasing as,
in general, fraud losses continues to
increase.
• ATMscanbeaprofitablebusiness
line but with exceptions
While the majority of participants are
showing profitable ATM businesses,
a minority is apparently running loss-
making estates. It is to be noted that
not all ATM operators have a strategy
whereby profits are generated from
the ATM channel, this conclusion
is reinforcing the working hypothesis
that the cost imbalances outlined
in the first conclusion may provide
opportunities to improve overall ATM
economic performance
• Cardholdersatisfactionisnot
a typical driver to ATM management
Very few participants appear to be
tracking cardholder complaints
(or other types of customer satisfac-
tion measures) in parallel to ATM
performance monitoring. While
availability and uptime are important
drivers for ATM performance, could
customer satisfaction be a source
of competitive advantage too?
report ATM BenCHMArKInG STUdy 2014 And IndUSTry rePorT
• Selectivemultifunctionalityisthe
ATM business model of the future
In line with what the conclusions
and findings of the 2012 Study,
multifunctionality is now an estab-
lished, dominant business model
for ATMs. ATM operators appear
to be developing selective approach-
es to multi-functionality with some
Value Added Services being phased
out in parallel to a more selective
approach to Value Added Services
being implanted in evolving the role
of the ATM.
Value Partners believes that the ATM
channel is, and will continue to be, for
the foreseeable future, one of the most
important channels of the banking
industry and, with very few exceptions,
the main touch-point between retail fi-
nancial institutions and their customers.
The development of other channels
such as internet and mobile banking is
currently proving complementary to
ATM industry and it is far from being a
threat to ATMs. Within this context, ATM
business management and the result-
ing fundamental economics should not
be overlooked, since current business
practices appear to offer potential for
improvement.
As referred to previously, the content
of this report refers to the general
results of the ATMIA ATM Benchmark-
ing Study 2014 and are general
in nature. Survey participants have
exclusive access to the full findings
and are provided with a customised
report detailing their performance
relative to a number of benchmarks.
If you would like to participate in the
survey in future years, please contact
your ATMIA regional director or write to
The development of other channels such as internet and mobile banking is currently proving complementary to ATM industry and it is far from being a threat to ATMs
36—37
ABOUT vAlUE PARTNERS MANAGEMENT CONSUlTING
value Partners has an
established financial
institutions practice with
a track record in cards,
payments and transaction
banking. Over a quarter
of our projects are now on
behalf of financial institu-
tions. We have completed
projects with top banks,
issuers, acquirers, proc-
essors and payments
schemes.
The firm also works across
all sectors of the telecom-
munications and digital
marketplace, as one of
the largest TMT practices
worldwide. This, together
with our thought leader-
ship position in the finan-
cial services industry, has
enabled value Partners
to excel within the context
of industry convergence.
Over the last 21 years we
have delivered real ben-
efits for our clients, 60% of
whom have been with us
for over 10 years, build-
ing on our deep industry
insights into key issues for
these sectors. value Part-
ners has played a primary
role in the development of
innovative solutions, espe-
cially those at the cross-
roads between industries.
We have assisted 3 of the
world’s top 5 banks, the
leading European financial
institutions and the main
telecoms operators in
Europe, Asia, Middle East
and latin America.
We serve the largest
private equity firms with
an interest in financial
services, telco and media
industry. value Partners
helps its clients adapt
their business models in
an increasingly complex
business environment,
to maximise impact and
returns in the financial
services, payments, telco,
technology and digital
media spaces.
Founded in Milan in 1993,
value Partners’ rapid
growth testifies to the val-
ue it has created for clients
over time. Today, it draws
on 20 partners and over
250 professionals from 23
nations, working out of
offices in Milan, london,
Istanbul, Dubai, São Paulo,
Buenos Aires, Beijing,
Hong Kong and Singapore.
value Partners has built a
portfolio of more than 350
international clients – from
the original 10 in 1993 –
with a worldwide revenue
mix.
valuepartners.com
report ATM BenCHMArKInG STUdy 2014 And IndUSTry rePorT
ABOUT ATMIA
The ATM Industry Associa-
tion, founded in 1997, is a
global non-profit trade as-
sociation with over 4,000
members in 60 countries.
The membership base
covers the full range of
this worldwide industry
comprising over 2.3million
installed ATMs.
ATMIA has chapters
around the world in the
United States, Canada, Eu-
rope, India, latin America,
Asia-Pacific, Asia, Africa
and the Middle East.
ATMIA has just launched a
new international certified
eTraining programme for
ATM Operators (for both
banks and independent
ATM deployers. In addi-
tion, the association runs
an ATMIA Consulting and
Training practice as well
as a range of industry
committees to deal with
Government Relations and
regulatory monitoring,
ATM security, best prac-
tices and ATM deployer
issues.
ATMIA’s provides a one-
stop online resource for
member information with
security best practices,
industry white papers,
articles, research findings,
ATM business efficiency
best practices, compliance
material, Corporate Gov-
ernance best practices,
Glossary of ATM Terms, a
Gallery of Technology, on-
line ATM Risk Assessment
system, industry calendar
and more.
atmia.com
ATM business management and the resulting fundamental economics should not be overlooked, since current business practices appear to offer potential for improvement
Co
py
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