WHY MORE COMMUNITY BANKS ARE CHOOSING TO OUTSOURCE THEIR ATMS Challenges Facing FIS in Today’s Consumer Landscape By Wade Zirkle President, BluePoint ATM Solutions, ICBC Associate Member The biggest challenge that banks are facing in today’s competitive landscape is cost. The pandemic changed the world as we know it, and ATM transaction volume was not immune to these changes. Since COVID, transaction volume at ATMs has declined by about 10-20%. Some markets are different from others, but the decline is showing up everywhere. ATMs have a high fixed cost component, and when transaction volumes decline, per-unit costs increase. Add stubborn inflation to the mix, and the result is a quite significant and highly visible cost challenge. WHY ARE COMMUNITY BANKS CHOOSING TO OUTSOURCE THEIR ATM MANAGEMENT? The principal reason is to reduce costs. ATMs are not a channel that banks can just shut down. In markets where the use of cash has declined, consumers depend on conveniently located ATMs as a cash access and servicing point. From a broader perspective, most banks either have, or are in the process of, transforming their branches into more of a sales center and less of a transaction center. Consequently, migrating cash transactions to an automated channel like ATMs is critical to this migration. Given the importance of the channel but faced with significantly increased cost, the imperative is clear — keep the footprint of cash access points but reduce the cost of owning and operating it. This imperative has taken on a very different characteristic with some banks. Some banks want to turn their ATMs into profit centers, which is getting increasingly difficult to do. Saying you want your ATMs to be INDEPENDENT REPORT | 15
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