In-House ATM Terminal Driving - Justification

Below is a summary of the advantages of driving your own ATMs in-house versus outsourcing:

Reduced Costs – Return on Investment

• Today's open systems technology and reduced hardware costs make in-house ATM driving more cost effective than ever before.
  
• No third party fees associated with the processing of your customer transactions at your ATMs.
  
• With CSFi's solution, additional staff members may not be required to manage an in-house ATM system.  Functions like replenishing and balancing the ATMs still require staff even when outsourcing your ATM driving.
  
• Increased revenue generating opportunities through foreign transactions acquired at their ATMs. Your financial institution is in control of its fee income revenue and not the third party who may be taking a piece of the transaction revenue to begin with. One of our customers using an outsourced provider received 30% of the income revenue and after deploying the CSFi solution received 100% of the fee income revenue.
  
• In addition to transaction fees, outsource companies may also charge for additional services that are included in CSFi's iin-house solution (monthly administrative fees - number of cards, network charges - modems, report generation, etc.).
  
• When paying an outsource provider large sums of money on a monthly basis, how is the financial institution's revenue stream affected when looking at building future ATM capabilities whether it is the deployment of new ATM hardware or the upgrade of the existing ATM hardware to support new functions like deposit automation or EMV smart card processing?
  
• It is not uncommon for these outsource providers to start out by charging even the smallest customers US$10,000 to $20,000 per month. As you grow, so do the recurring monthly fees. When CSFi has installed its solution, it is not unheard of our customers saving upwards of $30,000 per month and the ROI can be less than one year.

Autonomy, Self-Determination, Control and Flexibility, Speed to Market

• There is no price tag that can be put on a financial institution's autonomy and self determination!  After a multi-year contract is signed with an outsource provider, will your financial institution be afforded the flexibility and capability to offer immediate services to your customers or will you be at the mercy of a third party's priorities and their desire to streamline their infrastructure by standardizing their services (types of ATMs supported, ATM terminal programs supported, etc.)?  Will your financial institution be of the size and business importance to the third party that your needs are met in a timely fashion or will you have to wait in line for your business critical functions?
  
• Most outsource companies want their customers to utilize the same technology for ease of maintenance resulting in less customer differentiation and some resistance to deploying new and unique features that either help separate your financial institution from your competitors or that meet a customer-specific need that is indigenous to your financial institution and no other financial institutions served by the outsource provider.
  
• Balancing and reconciliation, card activation and instant issue, marketing promotions and deployment of consumer-targeted ATM programs. ATM program changes can be made quickly. Updates to limits and other business factors can also be made quickly and on your financial institution's schedule.
   

Responsive and Convenient Service

• In-house systems provide convenient, immediate access to information so you can understand and better serve your customers. You have complete control and access to the information and can create internal application programs that meet your critical informational needs. Transaction extracts, user-specific reports, etc. can be developed without going through a third party.
  
• Is your next project going to be at the same priority level as the outsource provider or will you have to wait on them to rollout a critical product or service?
  
• Will your customer service representatives have instantaneous information available to them or will they have to wait for the outsource company to get back to them?
  
• Will ATM outages and network problems be communicated efficiently and are the notification methods flexible?
  
• Do executives have instantaneous management report information available to them? If so, is there a cost to periodically receiving these reports?
  
• Can your customers take advantage of mobile phone top-up, instant card issuance and other convenient services that strengthen the relationship between your financial institution and your customer?

Increased Security

• Cardholder data, encryption keys and other sensitive data requires strict control and security. There have been well-publicized security breaches such as Heartland Payment Systems http://www.2008breach.com/. It is very important to maintain security and control over your own proprietary customer data.  In-house control greatly reduces the risk of a third party security breach.

Innovation, Differentiation and ATMs as a Strategic Point of Contact

• Does your financial institution want to be a leader or a follower?  Financial institutions with in-house control have more control over using the ATM channel as a point of customer contact and service. The ATM channel can be made to reflect and complement your other delivery channels. Products can get out to market at a faster pace based on your schedules and internal infrastructure.
  
• If a financial institution has complete control over its ATM network, it has the advantage of speed and flexibility in deploying advanced functions such as EMV, deposit automation, mobile phone top-up, ATM personal preferences, pre-paid/stored value cards, cardless transactions and other emerging technologies that may not be on the same rollout schedule as the outsource provider who has multiple customers to consider. The outsource provider may provide some or all of these functions but will they be tailored to meet your specific approach and business model? It is likely that the outsource provider will desire the model to be the same for all of its customers lessening again any market differentiation between your financial institution and your competitors.
  
• ATM functions can be tailored to a user's preferences or habits with the ability to set personalized ATM preferences such as fast cash amount, receipt/no receipt, language preference, etc.  This personal service builds a stronger relationship between your financial institution and your customers.