Five Signs That May Indicate Your Need for an ATM Management company

Five Signs That May Indicate Your Need for an ATM Management Company

Article by William Dishman

The number of businesses that offer the convenience of an ATM as a value added service continues to rise. ATMs are everywhere. However, providing this value added service is time consuming and costly. You may need to outsource the management of your ATM in order to maximize revenue in a difficult and sometimes confusing industry. According to banking expert, James DeLoise, "Industry trends show that businesses that have chosen to outsource their ATM management are pleased with their success in an arena where many are throwing in the towel." According to experienced ATM deployers, you could use an ATM management company if:

1. Your vault is open

No, this does not mean that your armored delivery provider forgot to lock the ATM vault. Rather, you have been unable to stop the increasing demand of cash required to meet the expense of maintaining your ATM on a monthly basis. Why does it cost so much to operate your fleet of ATMs? "Issues with maintenance, cash inventory problems, cash delivery, cash balancing, insurance and communication costs made it difficult to break even on monthly costs. My expenses sometimes ran as high as $800 a month to operate one full service ATM," stated multiple ATM owner Damon Reis, during a recent banking conference. Expenses outside of one's normal service territories can even be higher. According to a survey conducted by Boston-based Dove Associates, "expenses vary widely between ATM deployers. Some pay as much as 50% more to operate their ATM portfolios".

Solution - Hire out the day-to-day management of your ATM(s) in an effort to not only cut costs, but also reduce or eliminate labor worries while providing a consistently performing ATM portfolio specifically designed to meet your business goals.

2. Your ATM is always down

Offer an unreliable ATM to your customers and you have sealed the eventual demise of your ATM program. Customers who use ATMs expect to be able to use the ATM. Small issues like paper jams and cash mis-feeds result in ATM down time and will create a perception from which it is almost impossible to recover. Your customer will not rely on your ATM again. Hardware issues, cash outages, processor failures and communication issues all can force an ATM to display the dreaded "out of service" screen. "Annoying little details kept slipping through the cracks, details that apparently required daily monitoring and quick responses. I guess we did not have the ability to keep up with the needs of our ATMs. Our slow reaction to out of service issues convinced me that I needed to make a change and delegate to the experts what we apparently did not understand. We experienced immediate results with proactive monitoring," says Daniel Tudor, Regional Manager of a large chain of stores.

Solution - Businesses of all sizes need consistency in their ATM services. Consistency seems to define customer service in the ATM industry. Finding an ATM management company that is devoted solely to the management of ATMs increases the availability of key services and resources necessary in keeping your ATM surprises to a minimum. (They focus on managing your ATM so you don't have to.)

3. Transaction Volumes are dropping

Florida based BankAtlantic Corporation recently announced, in the first quarter of 2001, that it planned to mothball nearly 400 ATMs due to declining transaction volumes. BankAtlantic has reported more than 35% loss in transactions over the last two years.

Solution - Does an ATM management company have the ability to guarantee greater transaction volumes? Probably not, although in most cases, the greater operating consistency of those ATMs watched over by a management company can secure a customer's loyalty and repeated visits. ATM industry leaders express that the frugal and proactive monitoring that an ATM management company can provide will reduce operating expenses and solidify the best opportunity for maximizing ATM revenues.

4. You are relying on the location to help operate your ATMs

Although smaller retailers may be willing to facilitate their own cash replenishment and service, this is rarely the case with larger chains or corporations. The allure of saving money by having the merchant load her cash into the ATM(s) has proven costly. Error resolution, chargeback reconciliation, help desk support and the coordination of field technical services can be overwhelming. Operations Manager Jana Lyle found that "monitoring the store employees who were responsible for stocking the ATM with cash was not only time consuming and stressful, it was nearly impossible."

Solution - The proactive ATM monitoring which an ATM management company can provide reduces or eliminates issues with error codes and cash level maintenance that is essential to achieving the consistency required of a successful ATM program. Once the ATM is rendered "down", any reaction is considered too late by the customer who could not get her cash. The ATM owner stands to gain from allowing an ATM management company to handle all ATM operations. Doing so allows both companies to concentrate on their core competencies resulting in lower monthly expenses and higher revenues.

5. Increase your ATM portfolio without having to add infrastructure

When ATMs were first made available, banks offered them in limited quantities as a value-added service. Now, even with the help of increasing surcharges, off-premise ATMs generate about as much red ink as they dispense cash. Services associated with the operation of an ATM such as: market research, site selection, cash delivery, field technical services, customer help desk, first and second line maintenance, error resolution, chargeback research, cash balancing and the maintenance of personal relationships with the ATM location contribute to the increasing costs associated with managing an ATM portfolio. Although surcharges have increased, revenues per ATM have declined, in part due to aggressive ATM deployments by non-bank operators. And, the infrastructure and staffing requirements remain in order to handle the laborious and tedious efforts required for day-to-day ATM operation.

Solution - "ATM management companies dedicated solely to the management of ATMs can offer a proven customized infrastructure through which the bank may save money and gain what previously was unattainable. A good ATM management company can efficiently handle all of the operational demands of the ATM(s)" states AmericaOne ATM Management Services executive Jim Beyer. "Additional services such as the provision of additional locations in which the bank may effortlessly expand its market presence insure the management company's longevity." The ATM management company can also pass on its ability to receive reduced prices on equipment and installation. Beyer says, "We provide a single channel through which the bank can communicate its ATM concerns eliminating the headaches of coordinating with multiple vendors. Increased communication effected with proactive ATM management increases goodwill with the location."

The competitive ATM market can be a difficult path to navigate. Utilizing an ATM management company to help chart the best course for individual or multiple location success will undoubtedly be a deciding factor in the success or failure of an ATM portfolio. ATM management provides a single source solution for ATM needs giving businesses the freedom to reap the rewards of an ATM machine at their location(s) without the hassle that is normally associated with ATM placement.