ATM Benchmarking Study 2016 and Industry Report - Accenture
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ATM Benchmarking Study 2016 and Industry Report
ATM Benchmarking Study 2016 and Industry Report #02
Contents
#05 Foreword
#06 Executive summary
#07 ATMIA Benchmarking context
#08 Industry landscape
#12 ATM evolution and
branch modernisation
#14 The relevance of ATMs for the
purpose of financial inclusion
#15 Key findings from ATMIA’s
ATM benchmarking 2016
#16 Cost and profitability dynamics
#18 Increased ATM functionality
#23 ATM crime and fraud management
#26 Conclusions
#03ATM Benchmarking Study 2016 and Industry Report #04
Foreword
The results of the third round of global ATM benchmarking in 2016 reinforce both the
central position the ATM occupies in today’s omni-channel1 banking environment and
the fact that there is a still a long way to go to reach optimisation in operating this
powerful self-service technology.
The benefits of investing in benchmarking include gaining new strategic direction,
significant cost saving and improved performance. Even today, though, businesses
continue to underestimate the power of benchmarking as a tool for continuous
improvement. With cost controls still high on the agendas of financial institutions,
it’s even more important now to use the benchmarking tool for objective
measurement of performance.
This report sketches the current global ATM landscape before delving deep into
the vast range of metrics our study has developed since its inception. You will also
thoroughly enjoy the section on the growing list of Value Adding Services at ATMs.
We set out to provide fresh insights into the performance, cost and profitability
structure of ATM estates of participants. A comparison of the results of three
separate ATM surveys between 2011 and 2016 shows the evolving trends in our
industry across all the most important metrics of ATM operational performance. In
particular, this new study reveals that there are several ongoing inconsistencies in
the way the ATM industry manages its costs. In fact, there is clearly still considerable
scope for improving cost efficiencies across the ATM operational lifecycle.
In an environment of intense competition with “disruptive” technologies in the
electronic payments space, in which some banks may even face a threat of
disintermediation, and in a time when the costs of compliance and of migrating to
new operating systems continue to pose a challenge, cost optimisation in the ATM
industry has become nothing less than a competitive necessity.
I’d like to thank Accenture’s team for another powerful study giving ATM deployers,
whether banks or IADs, a step-by-step approach to increasing the efficiency of their
estates. I’d also like to place on record my sincere appreciation for Ron Delnevo’s
strong support for this third round of benchmarking.
June, 2016
Michael Lee
CEO
ATMIA
#05
1
Omni-channel banking: provision of access to financial services across a variety of channels with a consistent interactionATM Benchmarking Study 2016 and Industry Report
Executive summary
The ATM channel is still maintaining its ATM provides leverage for the provision of undertaking against the ever-present
central role as a core banking touchpoint customer convenience services that often threat of criminality, this is having cost
with the consumer and has become an provide fee-based-revenues to the ATM implications, with a notable increase in
integral part of the banking omni-channel operator. The wide selection of services security and fraud-investigation costs
experience, not only playing a key role in made available at the ATM that emerged registered between 2012 and 2014.
the broad context of modern banking but during the previous study of 2012, and
also being a major enabler of mission- which appeared to be selectively focused Overall and despite having been
critical “access to funds” functionality during the 2014 study, now appears to introduced as long as 50 years ago, the
within financial inclusion initiatives. The have been further focused to a broader ATM remains central to the banking
channel is taking an even more important but more defined, range of services. industry in what appears to be a
role as branch network optimisation leads complementary role to the more recently
to a reduction in the number of branches The trend towards introducing cash introduced electronic payments facility.
while consumers still express a preference recycling ATMs is likely to accelerate ATMIA and Accenture believe that the
for banks with a physical presence2. around the globe as highlighted by ATM ATM will retain its importance for banks
Marketplace based on a comprehensive and consumers alike in the foreseeable
Following the success of the previous industry survey3. The well-established future and that the untapped potential
ATM benchmarking exercises and success of this innovation in a number for cost optimisation, highlighted
the positive feedback received by of markets, particularly Asia, justifies during the course of the three rounds
participating organisations, ATMIA has a world-wide commitment to its of benchmarking, will ultimately lead to
decided to undertake a third round of introduction that sometimes necessitates an evolution of ATM operating models,
ATM benchmarking and is pursuing a changes in national laws and central bank including further enhancements of the
partnership with Accenture, one of the regulations, as well as innovation by ATM transaction sets available at ATMs.
leading advisory and technology services networks. With bank branches seeking
provider to the financial services industry, cost efficiencies in almost every market,
for the purpose of developing this this service will be core to efficient cash
industry report. management and vital to the smooth and
convenient circulation of cash.
Findings from the third round have
confirmed the conclusions from the The positivity in relation to expanded
previous two in terms of the untapped transaction sets is in stark contrast
cost efficiency that is still available within to negative connotations surrounding
the ATM industry and of the evolving the increased number of ATM crime
role of the ATM in modern banking. The prevention measures that are reportedly
#06 ATM is a channel through which multiple being rolled out in many ATM estates.
current account-related services are made While this is a reflection of the intensity
available to consumers. In addition, the of the battle that the industry is
2
Bank Branch Transformation – Towards Affordable Customer Service, Ron Delnevo, Retail Banking Forum - Vienna, November 2014
3
ATM Marketplace, ATM Future Trends 2015ATMIA Benchmarking context
Following the success of the first two As in the case of the two previous For the purpose of this analysis, and
rounds of ATM benchmarking studies, and benchmarking exercises, anonymous with the particular objective of releasing
the feedback received from participating data was gathered across the key areas the ATMIA ATM benchmarking study
organisations, ATMIA decided to pursue of the ATM value chain, with the purpose 2016 industry report, ATMIA has decided
a third benchmarking round. On this of providing participants with renewed to partner with Accenture, one of the
occasion 43 ATM operators participated insight in the performance, profitability leading strategy, consulting, technology,
in the exercise, a slightly increased and cost structure of the ATM estates. digital and outsourcing financial
number of participants over the second This is coupled with insights on the services provider.
round. Among these there is a core of 27 evolution of the ATM functionality
participants that have taken part in one (e.g. Value Added Services, or VAS) and As on the previous two occasions, the
of the previous two rounds and, amongst with added detail on fraud management industry report illustrates the general
these, there are some of the largest ATM and prevention. findings from the benchmarking exercise
operators globally and players whose ATM on a “base 100 normalised index” in order
business is core to their strategy. The value of such insights is particularly to guarantee the confidentiality of the
important as the ATM installed base data submitted by the participants and
The third round of benchmarking shares keeps growing, while the ATM remains protect sensitive information.
the structure of the second round with a core banking channel within the
the addition of few more data-points context of branch innovation and Once again, the underlying philosophy of
within the “Transaction Statistics”, “Cash omni-channel banking, and is also the exercise is that through cooperation,
Management” and “Fraud, Crime and proving a key enabler to financial the ATM industry, together with ATMIA,
Dispute” sections. The questionnaire inclusion initiatives designed to foster will be able to provide pointers leading to
is now deemed to be complete to the social and economic development in improved efficiency and performance of
point that it is expected to be rolled over many emerging economies. ATM businesses.
without any further modifications into
the next rounds of benchmarking.
#07ATM Benchmarking Study 2016 and Industry Report
Industry landscape
The original concept of ATM appears to The installed base of ATM machines is
have developed rapidly across different growing with an estimated 3.2 million
countries at the same time out of two units installed in 20145, up by 12.4%
initial similar inventions called the compound annual growth rate (CAGR)
Bankomat. “By 1971, manufacturers were from the 2.0 million units in operation in
mushrooming and building ATMs around 2010. The numbers are projected to grow
the world, including in the UK, U.S. and to over 3.5 million by 2020.
Japan”4. The industry has progressed
significantly since those days and, while
the ATM is still core to the provision
to access to cash, its role within retail
banking is evolving rapidly.
Fig. 1 – Number of ATM (world, millions of units)
4.5 4.8% 4.3
4.1
4.0
4.0 3.8
3.6
Number of ATMs (world, million of units)
3.5 3.4
12.4%
3.2
3.0
2.6
2.5 2.4
2.1
2.0 2.0
1.5
1.0
0.5
0.0
2010 2011 2012 2013 2014 2015 (f) 2016 (f) 2017 (f) 2018 (f) 2019 (f) 2020 (f)
Source: World Bank statistical database (http://data.worldbank.org/indicator/FB.ATM.TOTL.P5), BIS Red Book (http://www.bis.org/list/cpmi/tid_57/index.htm),
ECB (https://www.ecb.europa.eu/paym/intro/book/html/index.en.html), RBR (http://www.rbrlondon.com/about/G20_Press_Release_050116.pdf), Accenture analysis
#08 Europe East Asia & Pacific Middle East & North Africa
Central Europe and the Baltics North America Sub-Saharan Africa
Central Asia Latin America & Caribbean World (total)
4
Quote from: http://www.bloomberg.com/view/articles/2013-03-27/how-the-atm-revolutionized-the-banking-business
5
World Bank’s statistical portal (data.worldbank.org/indicator/FB.ATM.TOTL.P5?page=1), ECB, BIS, Accenture analysisGrowth happened in all regions with the number of units installed during the year ATM penetration increased globally to
exception of Europe where the number of 2014. Nonetheless the ATM penetration 43.97 ATM / 100k in 2014, a 52.1%
installed ATMs shrunk by a 6.0% CAGR in China is still low with 55.03 ATM per increase from the 28.90 ATM / 100k in
between 2010 and 2016. The fastest 100,000 people (henceforth referred as 2010. Nonetheless, in Europe, in line with
growing region is the Asia Pacific, with “ATM / 100k”) in 2014, growing rapidly the decrease of installed ATMs, there is a
Central Asia growing at a 37.2% CAGR from the 9.62 ATM / 100k of 2006, but drop in penetration from a peak of 83.42
and East Asia and Pacific growing at a far from reaching yet the higher ATM ATM / 100k in 2010 to 64.78 ATM / 100k
26.2% CAGR over the five-year period. penetration of other countries. North respectively in 2014 as illustrated in
As at the end of 2014, the largest ATM America remains the region with the Fig. 2.
market is China, with 750,770 units, highest penetration, with 222.27 ATM /
which means that China overtook the US 100k at the end of 2014.
as the largest ATM market in absolute
Fig. 2 – ATM penetration by region (ATM / 100,000 people)
North America
240
ATM penetration (ATM per 100,000 people)
220
200 OECD members
180 European Union
Central Europe and the Baltics
80
East Asia & Pacific
60
Europe & Central Asia
40
Middle East & North Africa
20 World
Latin America & Caribbean
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Source: World Bank (http://data.worldbank.org/indicator/FB.ATM.TOTL.P5)
#09ATM Benchmarking Study 2016 and Industry Report
This dynamic in Europe can be due to withdrawals, hinting at a re-balancing
a number of reasons, including the of cash vs. electronic payments usage,
consolidation of the banking industry potentially driven by phenomena like
that is continuing in some parts of the growing adoption of e-commerce
Europe. This could also be due to some and electronic payments. Figs 3 and
extent to the rapid growth of electronic 4 illustrate the European and global
payments at Point of Sale (POS) vs ATM transaction trends at POS and ATM.
Fig. 3 – Value and number of ATM and POS transactions in Europe Fig. 4 – Value and number of ATM and POS transactions globally
11.25%
CAGR
7.43%
3000 CAGR 20.000
16.42%
CAGR
Value of transactions ($Bn)
Value of transactions ($Bn)
2.51% 15.000
CAGR
2000
10.000
1000 5.000
2010 2014 2010 2014
8.26%
Volume of transactions (millions)
CAGR
Volume of transactions (millions)
20.000 60.000
0.79%
CAGR
10.000 7.42% 30.000
CAGR
11.47%
CAGR
0 0
2010 2014 2010 2014
Source: World Bank database (http://data.worldbank.org/indicator/FB.ATM.TOTL.P5), Statista (www.statista.com),
BIS Red Book (http://www.bis.org/list/cpmi/tid_57/index.htm), ECB (https://www.ecb.europa.eu/paym/intro/book/html/index.en.html), Accenture analysis
ATM POS GDP 1.02% GDP 4.38%
Overall, whilst ATMs are central for
access to cash purposes and central to
the banking experience, in some markets
their role has evolved from being a
#10 primary banking customer touchpoint to
a channel complementary to branch,
mobile and internet banking.ATMs are central
for access to cash...
and the banking
experience. In
some markets their
role has evolved...
to be a channel
complementary to
branch, mobile and
internet banking #11ATM Benchmarking Study 2016 and Industry Report
ATM evolution and
branch modernisation
ATMs have evolved significantly from MultiCarta in Russia provides customers There is still room in many markets for a
their invention and early developments of with internet banking access and credit significant expansion of the transactions
nearly 50 years ago. Originally brought in card application facilities through their offered at ATMs in a self-service
to reduce congestion in branches and to ATMs; Leto Bank, another Russian perspective. Cash recycling – both notes
prevent banks from having to extend their organisation, offers customers express and coins – is likely to be one increasingly
opening hours in order to serve a large loans through its ATMs; PrivatBank commonplace service offering, as ATMs
number of customers, the number and in Ukraine allows Western Union replace deposit-taking roles previously
type of services provided at ATMs have international remittances and currency fulfilled by bank tellers. This is particularly
expanded significantly. exchange capabilities; some bank relevant in markets where bank branch
branches in the UK offer ATM cheque and networks are being revisited or where
For example, ATMs in the UK offer cash deposits, statement printing, direct bank branch numbers are declining, such
consumers the ability to top-up prepaid debits and standing orders management, as in Europe where in 2013 5,300 bank
mobile phones and to make charity and credit transfer facilities6. branches were sold or shut based on
donations; in the US, ATMs sell stamps; Reuters’ estimates7.
Fig. 5 – Evolution of ATMs and growth of their functionality
Timeline Functionalities
Initial developments Early 1960’s • Cash withdrawals (no return of card)
• Cash withdrawals
• Account balance check
Basic ATM 1970’s to 2000’s • Printed receipt
• Limited envelope cash deposit
• Mini-statements
• Mobile top-ups
• Ticketing
• Utilities payments
Multi-functional ATM 2000’s to 2010’s • Mobile and prepaid top-ups
• EMV
• Cash recycling
• General advertising
• Money transfers
• Targeted marketing and advertising
• Information services
ATM in omnichannel • Multi-media ATMs
2010’s onwards • Rapid dispensing capabilities
user experience
#12 • International remittances
• Contactless
Source: Accenture analysis
6
ATM Marketplace, “The humble ATM: So much more than a cash machine”, 26th January 2016
7
Reuters – Top European banks close or sell 5,300 branches in 2013, April 11th 2016Even where bank branch networks Branch re-design is extending the
are being expanded, the increase of internet self-service experience into a United Bank for Africa (UBA) operates
functionality and the core self-service physical banking environment, providing across 19 African countries and handles
feature of the ATM proposition is not financial institutions with the ability over 2 million transactions per day across
only enabling ATM operators to seek new to replace clerical activities and focus multiple channels ranging from over 600
types of revenues but also facilitating branch staff to higher-value customer branches, 1700 ATMs, 13,400 POS, internet
branch modernisation in pursuit of cost interaction activities. It is a space and banking, mobile banking and social media.
savings and better performance of the resource optimisation exercise, united Through a real-time transaction monitoring
retail franchise. with a user experience re-think, by giving platform, UBA is able to proactively
to the branch a completely new structure. manage transaction performance, have a
Development of the internet and mobile Enhanced ATMs, multifunction ATMs, view of customer behaviour and monitor
banking has radically changed the way deposit taking ATMs and cash recyclers, third party hosted switches and integrated
retail and corporate customers bank video teller ATMs are the core building applications across all banking channels
today. Despite this, branch banking and blocks around which to conceptually including multi-functional ATMs8.
the ATM are still core to the overall re-think the customer journey and design
banking relationship, even if their role has a branch with welcoming spaces for
transformed to a choice of confidence customer engagement.
Royal Bank of Canada (RBC) ’s mission
and convenience. With the increase
is to be the undisputed leader for financial
of functionality and the evolution of While ATMs are a core enabler for
services in Canada and to be the leading
hardware and software, ATMs have branch redesign, they cannot be taken
wealth management provider globally.
become de-facto versatile instruments of in isolation for the purpose of modern
RBC’s client interaction strategy provides
customer engagement that are central banking as the underlying analytics
real-time support at the point of the client
to the branch re-design into a high-tech, enable an omni-channel banking
interaction in a full service face-to-face,
self-service, technology-intensive banking experience by providing a coherent
an assisted, or in on-line self-service
experience that combines efficiency with content and engagement across all of
channels including ATMs. The visibility
the value of a personalised, but time the customer’s touch points, including
over customer behaviour provides with the
efficient, interaction. the ATM.
ability to act on insights from behavioural
patterns. The ability to engage across all
channels, including self-service channels
like multifunction ATMs9.
#13
8
Source: Inetco Insight, case study: UBA. 13th January 2016
9
Source: blogs.teradata.com, “RBC: Doubling Success & Earning the Right to be the Client’s First Choice” 17th September 2015ATM Benchmarking Study 2016 and Industry Report
The relevance of ATMs for the
purpose of financial inclusion
Access to financial services is one of the There are various financial inclusion three years”16 practically officialising
key social and economic challenges of initiatives, each of very different the role of the ATM as a core channel
modern times. Today there are 2 billion nature, whose success and effectiveness for the provision of banking financial
adults worldwide without access to a ultimately relies on the ability of services to the underbanked. As the cost
basic financial services account and, beneficiaries to access funds either of establishing wide branch networks
while this figure is still high, it represents through electronic payment acceptance increases, in particular in rural locations,
significant progress as the number people or through a cash withdrawal. it is proving challenging, leading to a key
worldwide with an account “grew by 700 barrier to universal access to formal bank
million between 2011 and 2014. 62% For example, the government in India accounts. Multi-function ATMs can act
of the world’s adult population has an aims to have every Indian household with as a “mini branch” where customers can
account; up from 51% in 2011”10 based a bank account and an ATM within 15 conduct the vast majority of transactions
on World Bank statistics. While multiple minutes’ walk of every Indian citizen by as they could in a bank branch.
propositions have been developed to 201613. Starting from a low penetration of
increase financial inclusion, ranging 13 ATM / 100k people, this is a significant These are only two of the many case
from mobile money solutions and ambition that the government has set for studies available, suggesting the
basic banking financial services, to the itself and, for that purpose, the Reserve complementary nature of cash access
development of banking agent networks Bank of India “decided to merge both the and electronic payments, but is also
from small retailers, the provision of basic Financial Inclusion Fund and Financial pointing to the ATM as one of the
financial services depends on the ability Inclusion Technology Fund into a single most important channels, which can
to leverage low cost channels in order Fund — Financial Inclusion Fund (FIF)”14 to be leveraged for the provision of basic
to be able to provide affordable basic foster the expansion and reach of banking financial services to the underserved.
account and payments services. services. “Reserve Bank of India panel
has recommended that the 2,000 crore In this context the ability to run a cost
In this context, the ATM is proving Financial Inclusion Fund should be utilised effective and sustainable ATM business
its value and potential for financial to encourage installation of ATMs”15 is critical, not only for the success of the
inclusion. “Banking agent transaction in rural and semi-urban centres. In his financial services industry, but also for
costs can beat branch costs by 50 percent 2016-17 budget speech, finance minister the social good. Based on these premises,
[compared to banking branch transactions Arun Jaitley stated that “To provide better the ATMIA ATM benchmarking acquires
costs]; automatic teller machine (ATM) access to financial services, especially in even more relevance, providing ATM
#14 transaction costs in high-traffic locations rural areas, we will undertake a massive operators with a baseline reference for
can beat branch costs by as much as 90 nationwide rollout of ATMs and micro the improvement of their ATM
percent”11 based on CGAP’s12 analysis. ATMs in post offices over the next portfolios’ performance.
10
Source: World Bank, The Global Findex Database (http://www.worldbank.org/en/programs/globalfindex);
11
CGAP Focus Note “Advancing Financial Inclusion though Use of Market Archetypes”, April 2013
12
CGAP (the Consultative Group to Assist the Poor) is a global partnership of 34 leading organisations that seeks to advance financial inclusion
13
NCR Blogs, “ATMs seen as key to India’s financial inclusion revolution”, 17th May 2016Key findings from ATMIA’s
ATM benchmarking 2016
ATMIA, in partnership with selected ATM estates. The value of such insights Others, meanwhile, reflect findings from
consultants, collected statistics from is especially important as ATMs are core the full sample.
43 ATM operators on global basis. to branch modernisation, within an
Interestingly, 65% of these are continued omni-channel banking concept, and a In the same way that the second
participants from the previous two core access to cash channel in financial benchmarking round confirmed the
rounds, a figure similar to the one inclusion initiatives. With cost controls findings from the first benchmarking
registered between the first and the being kept high on the agendas of all study, this round re-confirmed the
second round of benchmarking. Of these, financial institutions, and particularly in findings from the two previous rounds.
18 participants were from Europe, nine times of more precise capital allocation As such, the analysis has gone deeper
from Asia, five from the Middle East and due to tighter compliance requirements, in respect of some of the main topical
Africa and 11 from the Americas. such a capital intensive channel that areas: in particular, for cost performance
is also central to customer interaction and the profitability of the channel, the
The third round of ATM benchmarking benefits from an objective view of increased functionality of the ATM and in
was based on the categories and performance and a way to compare connection with fraud management.
metrics of the second round, with the against industry best-practices.
addition of some targeted additional
data in the Estate Statistics, Transaction Some of the statistics gathered are
Management, ATM Performance included in this report below on a “base
Monitoring and Fraud, Crime and 100 normalised index” basis in order to
Dispute sections. provide an illustration of the general
conclusions from the third ATMIA ATM
As on the previous occasion, the purpose benchmarking round. Some graphs and
of this survey was to provide participants statistics include most of the sample, but
with fresh insights into the performance, not all of the 43 respondents, since some
cost and profitability structure of their submissions were not fully completed.
#15
14
The Times of India, “Rs 2,000 crore fund to push financial inclusion: RBI, 15th October 2015
15
The Hindu BusinessLine, “Use 2,000-cr financial inclusion fund to set up more ATMs, says RBI panel”, 15th December 2015
16
The Times of India, “Rs 2,000 crore fund to push financial inclusion: RBI, 15th October 2015ATM Benchmarking Study 2016 and Industry Report
Cost and profitability dynamics
Unsurprisingly the analysis of the cost organisations from the same region, likely data sample. Fig. 7 provides the graphical
and profitability of the channel has, reflecting processing cost similarities on illustration of the updated statistics from
once again, proved consistent with the a geographical / supplier basis. This is a the third round of benchmarking. In this
findings of the previous studies. The working hypothesis that will need to be case, the correlation between the
cost per transaction, as illustrated in validated by the participation of larger frequency of replenishment and the cost
Fig. 6, highlights no correlation with the groups of ATM operators from the same per replenishment per year is a common
number of transactions or the size of the region in subsequent studies. feature that has been consistently
ATM estate. This said, the analysis and highlighted since the first benchmarking
the comparison of data across the three Cost per replenishment has, for the third exercise of 2012.
benchmarking studies highlights that time, provided the only correlation with
there are similarities of costs for scale to be found in the whole of the
Fig. 6 – Cost per transaction vs. number of transactions Fig. 7 – Cost per replenishment vs. number of replenishments per year
0.12 0.60
Cost of replenishment events per year per ATM
R2= R2=
Cost per transaction
Number of transactions Average number of replenishment events per year per ATM
#16
Source: ATMIA ATM Benchmarking Study 2016 Source: ATMIA ATM Benchmarking Study 2016
N.B Quantifiable metrics have been removed to anonymise resultsThe study has, for the second time, When looking in depth at the economic Fig. 8 – ATM profitability
included the collection of full costing performance of the channel, larger
and full revenue data, with the renewed financial institutions with large debit +92.5%
conclusion that only a small proportion card portfolios and large installed ATM
of ATM operators are running their ATM estates tend to be amongst the worse-
100
business profitably. Amongst these, performing ATM operators, in terms of
“Independent ATM Deployers (IADs)” ATM profitability, out of the full sample
represent the majority, with the few of all participants.
banks represented proving to be more an
exception than the rule. From a banking ATM profitability, as illustrated in Fig. 8,
perspective, the ATM channel is still is proving to have significant variance.
-278.6%
very much run as a lower cost option to While the above mentioned cost /
bank tellers. Exacerbating the negative revenue allocation policies between Profittability of ATM channel
economic performance of the channel are debit card and ATM product lines have Source: ATMIA ATM Benchmarking Study 2016
commonly cost and revenue allocation a part to play in this, there are also a
policies that dictate no reverse- significant number of cost inefficiencies
interchange recognition from the debit that need to be taken into account. The
card product line to the ATM in case of industry is proving once again to have an
on-us transactions. This not only inflates, untapped potential of cost optimisation,
inappropriately, the profitability of the as indicated by the lack of benefit from
debit card business but also drags the economies of scale.
ATM economic performance into losses.
#17ATM Benchmarking Study 2016 and Industry Report
Increased ATM functionality
Since the very first benchmarking round, Fig. 9 provides an illustration of the VAS preferences for VAS have evolved over
the data collected about the increased that are currently available or are planned time. The 2012 benchmarking study
functionality of ATMs (otherwise referred to be made available by participating registered a broad spread of interest
as Value Added Services, or VAS) ATM operators. to roll out an array of additional
provided evidence of the expanding role functionality at the ATM, while by 2014
of the ATM channel for the provision of The fact that a significant part of the an increased selectivity was apparent
services well beyond cash withdrawals sample participated in both the 2014 and concerning which application to make
or the related “card / transaction- 2016 benchmarking study, and provided available across the ATM channel.
supplementary” services (e.g. balance the data for this section, enables a
check or PIN change). meaningful comparison of how the
Fig. 9 – Value Added Services
Services offered or planned to be rolled-out Not willing to add service
100%
100% 0%0% 0%0% 100%
100%
Balance enquiries
Printed receipts
PIN services
Mini statements
Bill payments
Account transfers (cardholder owned accounts)
Cardless withdrawal
Mobile top-ups
Person to person domestic remittances (initiated)
Person to person domestic remittances (collected)
Couponing
Pass book printing
Payment of taxes / fines
Charity donations
Licences renewals
E-Wallet top up
Stamps sales
Person to person cross-border remittances (initiated)
Person to person cross-border remittances (collected)
Third party loyalty rewards
Lottery tickets
Sports event tickets
Entertainment event tickets
Travel tickets (urban e.g. bus)
Planned 5 Years Travel tickets (extra-urban e.g. train)
#18 Planned 1 Year Travel tickets (extra-urban e.g. flight)
Offered now Road tolls payment / prepayment
Source: ATMIA ATM Benchmarking Study 2016#19
ATM Benchmarking Study 2016 and Industry Report
The selectivity is becoming even more selected range of services that are related rounds, the priority given to specific value
evident from the results of the third to shifting further services from teller to added services appears to have gained
benchmarking round. The top VAS in the ATM and increased consumer convenience uniformity across geographies.
first four positions continue to be core (e.g. bill payment).
ancillary services to withdrawals and card The range of selected services hints at the
management-related services. Fig. 10 Another observation is related to the fact that there is an increased selectivity
provides an illustration on how VAS ranking distribution of the availability of these of the services available through the
has evolved during the course of the last services amongst participants on a ATM and that this selectivity has become
two rounds of benchmarking. geographical basis. While six years ago more prominent over time, but that
the relevance of available and planned VAS available on the ATM fall mainly
Other VAS that appear to gain VAS was related to the geographical in two groups: current account services
prominence are either current account location of the ATM fleet in question, over (intended as banking services otherwise
services (e.g. account transfers) or a the course of the three benchmarking available on other channels) and
Fig. 10 – Value Added Services relevance comparison between 2016-14
Value Added Service 2016 2014 Status
Balance enquiries 1 1
Printed receipts 2 2
PIN services 3 3
Mini statements 4 4
Bill payments 5 7
Account transfers (cardholder owned accounts) 6 6
Cardless withdrawal 7 13
Mobile top-ups 8 5
Person to person domestic remittances (initiated) 9 14
Person to person domestic remittances (initiated) 10 15
Couponing 11 12
Pass book printing 12 19
Payment of taxes / fines 13 17
Charity donations 14 10
Licences renewals 15 24
Stamps sales 16 27
E-Wallet top up 17 22
Person to person cross-border remittances (initiated) 18 18
#20 Person to person cross-border remittances (collected) 18 18
Source: ATMIA ATM Benchmarking Study 2016 & 2014consumer convenience services (intended coins will become even more important services. These will be focused either to
as fee-bearing services provided on behalf than they are today. ATMs with this enable further cost efficiency through
of third parties that may or may not be functionality could present a revenue the provision of current account-centric
available at teller). opportunity for ATM operators, whilst also services or in the development of fees /
playing a major part in optimising the revenue generating business models
While today statistics about cash cost of cash management. based on the provision of third
recycling have been collected separately party services to consumers as a
under the Estate Statistics section, it will On the basis of this data, the working convenience driver.
be interesting to see if cash recycling hypothesis is that ATMs will evolve
becomes a significant VAS in the coming into more different, for-purpose built
years. As bank branches are being range of value propositions that will be
redefined, ATMs that provide deposit targeted to the provision of a defined,
services and full recycling of notes and and numerically limited, range of
#21ATM Benchmarking Study 2016 and Industry Report
Fraud poses a
significant challenge
to the industry
and increasing
investment and
effort is required to
address it
#22ATM crime and fraud management
As the 2014 report highlighted, fraud throughout estates and an overall
and crime are having an impact on the increased incidence of the related
industry, not only in terms of losses but costs over the total operating costs.
also in terms of increased effort from
ATM operators in respect of investment of Fig. 11 provides an illustration of the
capital and resources aimed at preventing measures reported by participants
fraud. This is resulting in an increase in for the purpose of the third round
fraud prevention measures implemented of benchmarking exercise.
Fig. 11 – Security measures quoted by number of respondents
Number of respondents quoting the measure
0% 100%
Building alarms
Anti-cash trapping physical prevention measures
Anti-skimming jamming measures
Remote monitoring for unusual ATM device behaviour
Anti-ram raid bollards
Anti-skimming detection sensors
Anti-card trapping detection sensors
CCTV coverage
Mirror to detect shoulder surfing
Have PIN pad shields/guards
Anti-ram raid anchorage plinths / anti-theft devices
Measure quoted by number of respondents
ATM fascia and cabinet alarms
Enhanced physical security for cash shutters
Enhanced building and perimeter security
Enhanced ATM locking systems for the cabinet
Transaction encryption measures / MACing
Transaction reversal fraud / dispenser manipulation detection
Remote monitoring for unusual transaction patterns
Other securty features
Alarms in ATM security enclosures
Anti-cash trapping detection sensors
Anti-gas attack measures
Cash protection systems such as IBNS / dye staining
Internal cages / locking bars to protect cassettes
Enhanced ATM locking systems for the security enclosure
Higher specification security enclosures
Anti-deposit trapping detection sensors
Anti-solid explosive attack measures
Sensor surveilance on the pin pad to detect false keyboards
Defensible spaces (painted lines) at ATMs
ATM room smoke protection systems
Security guards at ATM lobbies
#23
Source: ATMIA ATM Benchmarking Study 2016 & 2014ATM Benchmarking Study 2016 and Industry Report
Fig. 12 – Security measures relevance comparison between 2016-14
Fraud prevention measure 2016 2014 Status
Building alarms 1 1
Anti-cash trapping physical prevention measures 2 12
Anti-skimming jamming measures 3 5
Remote monitoring for unusual ATM device behaviour 4 18
Anti-ram raid bollards 5 4
Anti-skimming detection sensors 6 13
Anti-card trapping detection sensors 7 15
CCTV coverage 8 2
Mirror to detect shoulder surfing 9 17
Have PIN pad shields/guards 10 18
Anti-ram raid anchorage plinths / anti-theft devices 11 7
ATM fascia and cabinet alarms 12 11
Enhanced physical security for cash shutters 13 19
Enhanced building and perimeter security 14 16
The fact that a significant part of the Enhanced ATM locking systems for the cabinet 15 6
sample participated in the 2014 and 2016
benchmarking, and that they provided Transaction encryption measures / MACing 16 3
the data for this section, enables a Transaction reversal fraud/dispenser manipulation detection 17 8
meaningful comparison of investment
Remote monitoring for unusual transaction patterns 18 14
in fraud prevention measures that has
been evolving over the course of the Other securty features 19 NEW
last two years.
Alarms in ATM security enclosures 20 9
Comparing the results of the two rounds Anti-cash trapping detection sensors 21 26
of benchmarking, there has been a slight Anti-gas attack measures 22 NEW
increase in the reported number of fraud
Cash protection systems such as IBNS / dye staining 23 21
prevention measures, with a significant
change of frequency with which the Internal cages/locking bars to protect cassettes 24 22
various security measures are being Enhanced ATM locking systems for the security enclosure 25 10
implemented. Compared to the previous
round, during which “Building alarms”, Higher specification security enclosures 26 20
“CCTV coverage” and “Transaction Anti-deposit trapping detection sensors 27 27
encryption measures / MACing” were
the top three fraud prevention measures Anti-solid explosive attack measures 28 28
implemented, on this occasion the Sensor surveilance on the pin pad to detect false keyboards 29 NEW
three most frequently implemented are
Defensible spaces (painted lines) at ATMs 30 29
“Building alarms”, “Anti-cash trapping
physical prevention measures” and “Anti- ATM room smoke protection systems 31 25
#24 skimming jamming measures”. Fig. 12 Security guards at ATM lobbies 32 24
provides an illustration of such changes
between the 2014 and 2016 exercises. Source: ATMIA ATM Benchmarking Study 2016When analysing the data, one of the Further analysis has highlighted a Between the last two rounds, the
working hypothesis was that the change correlation between the number of security data highlighted an increase of fraud
in the estate characteristics (e.g. ATM measures undertaken by an ATM operator investigation costs in the range of
locations) of the sample could have been and the size of its portfolio as illustrated 30% to 53% throughout the sample
the main driver for such a change but, by Fig. 13. While no region appears to of participants, regardless of their size.
based on a few targeted interviews, it be safe from ATM crime, there are also
emerged that there has been a re-focus interesting geographical patterns, with
of investment in fraud prevention ATM operators in Europe, North America
measures because of the evolution of and Latin America implementing a wider
the nature of threat faced by the range of number of security measures,
ATM operators. regardless of the size of their portfolios.
Fig. 13 – Number of security measures by size of ATM estate
R2= 0.52
Number of ATMs in portfolio
Use of Security Measures
Source: ATMIA ATM Benchmarking Study 2016
N.B Quantifiable metrics have been removed to anonymise results
Fraud poses a significant challenge to the to keep ATMs safe in the medium term,
industry and increasing investment and in particular for smaller estates located
effort is required to address it. In general in areas where ATMs can be more
terms, based on these trends, the amount exposed crime.
of security measures is expected to keep
increasing leading to a question about the #25
sustainability of the investment requiredATM Benchmarking Study 2016 and Industry Report
Conclusion
After nearly 50 years of existence, the The ATM is a channel through which two rounds of benchmarking. While these
ATM channel is still proving to have multiple services are provided to investments are required for the safe-
retained its central role as a core banking consumers, both in an approach that keeping of this core banking channel, the
touchpoint with the consumer. While appears to be pushing a self-service increase of required resources and the
initially this role was held on an exclusive access to an increasing number of increasing variety and complexity of the
basis, at least for all “vanilla” operations current account-related services, but security measures required to operate an
that were moved away from a counter to also in terms of leveraging the channel ATM estate to a reasonably secure level
a self-service channel, nowadays the in a more focused manner, for the will keep increasing the ATM operating
ATM has become one of the core provision of customer convenience costs and may call into question the
channels, complementing internet and services that often provide fee-based- sustainability of smaller estates.
mobile banking. Its role is not only revenues to the ATM operator. This
continuing to be core to the financial dynamic is emerging as a working Overall and despite having been
services industry but is also evolving into hypothesis for the industry on the basis introduced as long as 50 years ago, ATMs
the provision of mission-critical “access of the evolution of the value added are still central to the banking industry in
to funds” functionalities for financial services that are made available through what appears to be a complementary role
inclusion initiatives. the channel industry-wide. The selectivity to the more recently introduced electronic
of functionality that emerged during payments facility. ATMIA and Accenture
Nonetheless, once again on the occasion the study of 2014, in contrast with an believe that the ATM will still retain its
of the third round of ATM benchmarking ”all-out” development approach of 2012, importance for banks and consumers alike
undertaken by ATMIA, the channel is is now appearing as a focus of ATM in the foreseeable future but also that the
proving to have an unexploited potential operators on a well-defined range untapped potential for cost optimisation
for cost optimisation and profitability of services. and revenue generation will lead, in the
enhancement. The fact that ATMs are medium term, to an evolution of ATM
still considered in many cases as By contrast, ATM crime prevention operating models.
ancillaries to debit card portfolios measures appear to be proliferating,
and as a sort of necessary evil for the probably as a reflection of the struggle
reduction of the overall branch banking of the industry against the ongoing and
operations does not do justice to an ever more sophisticated attacks to which
#26 industry that has shaped the modern way the channel is subject. The cost of crime
of banking and that is core to all branch prevention has increased during the two
modernisation efforts. years that have passed in between the#27
About Accenture About ATMIA Contributors
Accenture is a leading global professional The ATM Industry Association (ATMIA), Massimo Proverbio
services company, providing a broad founded in 1997, is a global non-profit Global Managing Director
range of services and solutions in trade association with over 6,000 Accenture Payment Services
strategy, consulting, digital, technology members in 66 countries. ATMIA has massimo.proverbio@accenture.com
and operations. Combining unmatched chapters around the world in the United
experience and specialized skills across States, Canada, Europe, India, Latin Piercarlo Gera
more than 40 industries and all business America, Asia-Pacific, Asia, Africa and the Global Managing Director
functions – underpinned by the world’s Middle East. FS Distribution & Marketing Practice
largest delivery network – Accenture piercarlo.gera@accenture.com
works at the intersection of business and ATMIA has just launched a new
international certified eTraining Francesco Burelli
technology to help clients improve their
programme for ATM Operators (for both Managing Director
performance and create sustainable value
banks and independent ATM deployers. Accenture Payment Services
for their stakeholders. With approximately
In addition, the association runs an ATMIA francesco.burelli@accenture.com
373,000 people serving clients in more
than 120 countries, Accenture drives Consulting and Training practice as well
innovation to improve the way the world as a range of industry committees to deal
works and lives. with Government Relations and regulatory
monitoring, ATM security, best practices
Visit us at www.accenture.com. and ATM deployer issues.
ATMIA provides a one-stop online
resource for member information with
security best practices, industry white
papers, articles, research findings,
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compliance material, Corporate
Governance best practices, Glossary of
ATM Terms, a Gallery of Technology, online
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calendar and more.
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