The future of ATM software

FST. It seems there is a renewed interest from banks in their ATM channel. Do you think that is true?
AK. Just a few years ago, there was a feeling that everyone would do all of their banking on the internet, making the ATM irrelevant. However, we now know that the ATM channel is as critically important as it has ever been. Since ATMs are not going away, banks are now closely looking at reducing the costs of running their ATM networks. In addition, they need enhanced functionality. The best way to accomplish both of these goals is to move to standards-compliant software, which makes it less expensive and easier to develop and deploy ATM software.

FST. What are some of the major issues facing ATM owners today?
AK. The cost of the ATM network has always been an issue for banks. ATMs are still too expensive to buy and are far too expensive to operate.

Meeting regulatory mandates is periodically an issue too. An example of this is the need today for EMV compliance (also known as ‘chip and pin’). To meet the EMV requirement, banks have to replace hardware components and update the ATM software, which is expensive to do. They also need to replace outdated and unsupported operating system software and move to Windows XP because it is often dangerous for the bank to continue to use outdated software.

FST. How is having outdated ATM software potentially dangerous for the bank?
AK. Let’s look at one example. ATMs have an operating system inside them, just like a desktop PC. However, many ATMs still use older software such as OS2 or Windows NT – software that is now well out of date. These ATMs cannot receive security patch updates in the way that Windows XP does. This is risky for the bank’s network and may impact the bank’s reputation.

FST. How can banks better manage their ATM costs?
AK. One way to reduce ATM operational costs is by updating the software technology that is used. Today’s ATM software technologies take an axe to the overall costs by changing how things are done. For example, with today’s ATM software you can automatically download software updates and new features from a remote computer. You can also perform remote diagnostic testing and trouble-shoot problems at the ATM. The new technologies minimize the need to have a technician visit the ATM and dramatically reduce the cost of running a large ATM network.

FST. Why is ‘multi-vendor’ technology so very important?

AK. Banks that rely on one ATM vendor to supply them with everything put themselves into a difficult situation. Anything they do with their ATMs is going to cost a premium. It does not have to be that way. By upgrading the ATM software to multi-vendor technology banks are not stuck with a single supplier. They become free to choose the ‘best of breed’ for their ATM needs and greatly increase their buying power.

FST. Has multi-vendor ATM software been widely adopted?
AK. Any doubts that banks may have had about the business case for multi-vendor ATM software have been erased for some time now. Banks around the world – especially those with large, complex ATM networks – have benefited tremendously from having a single application run on all of their ATMs. It provides huge cost reductions and is now a global requirement for banks updating their ATM software.

FST. What should banks do next with their ATM software?
AK. Banks that have not already done so must move to multi-vendor technology. There are so many advantages in doing this that it does not make business sense for a bank to not do so. Moving to multi-vendor software along with Windows XP is the next step.