Accelerating Branch Transformation with Integrated ATM Life Cycle Management

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1 WHITE PAPER Accelerating Branch Transformation with Integrated ATM Life Cycle Management SPONSORED BY: Banks need to modernize their ATM operations management technology to accelerate the transformation of their self-service channels and deliver the quality of service and reliability customers expect in the new era of omni-channel banking. By Robin Arnfield ATMmarketplace.com The ATM self-service channel continues to be banks primary interface with their customers. As part of their branch transformation initiatives, banks are seeking to migrate routine transactions to their self-service channels. This will enable branch personnel to focus on more complex high-value and advisorytype transactions as well as up-selling and cross-selling opportunities. As banks increase their dependency on self-service channels for servicing their customers, they need to consider how they can transform these channels to deliver an omni-channel experience. In an omni-channel banking environment, customers can initiate transactions on one channel and complete them seamlessly on another with a consistent user interface. However, many banks ATM channels still operate as siloes, which hinders banks ability to deliver a consistent experience across all their customer interaction channels. Modernizing their ageing ATM management platforms can provide banks with a solid foundation for their branch transformation and omni-channel initiatives. ATM life cycle management has always been important, said Ed O Brien, director of U.S.-based Mercator Advisory Group s banking channels advisory service. But in the omnichannel banking environment where ATMs are mission-critical, it s even more important. If an ATM is down, it will harm the customer experience and damage the bank s profitability. Is it time to modernize legacy ATM management solutions? Many banks which have large ATM estates still rely on legacy ATM management tools to run their ATM infrastructure. Multiple disparate tools are used for tasks such as monitoring, transaction management, ticketing, 1

2 dispatching, and electronic journal (EJ) management. These tools are not integrated, are difficult to customize, and have a high TCO (total cost of ownership). ATM Management - Key Challenges Most legacy ATM management tools are geared to provide reactive breakfix support, ticketing and dispatch management functionality. They are not geared to deliver the remote management, run-book automation, predictive analytics and end-to-end transaction visibility which are needed to increase operations efficiency, enhance productivity and deliver a differentiated customer experience. Integrated ATM Life Cycle Management ESQ s OperationsBRIDGE platform has been designed to address the entire ATM life cycle value chain from the initial provisioning of ATMs to deployment into production, on-going life cycle management, and eventual retirement from service. Integrated ATM life cycle management can help banks transform their ATM channels and provide a solid foundation for their branch transformation initiatives, said Harish Bhat, president and chief operating officer of Cupertino, Calif.-based ESQ Business Services. 2

3 ATM Business Process Management Integrated ATM life cycle management can help banks transform their ATM channels and provide a solid foundation for their branch transformation initiatives. Harish Bhat, president and chief operating officer of ESQ Business Services The ability to deploy a single integrated solution for device management, transaction management and cash management gives operations staff realtime visibility, actionable analytics and service metrics so they can stay on top of their network. Remote management capabilities such as remote reboots and remote diagnostics can lower FLM (first line maintenance) costs by percent while providing better service intelligence for SLM (second line maintenance) support engineers. Other benefits of using a single integrated solution include run-book automation, event correlation for faster problem resolution, predictive analytics, and KPI (key performance indicators) monitoring by banks operations staff and line of business managers. Run-book automation enables ATM operations staff to move from reactive firefighting to proactive operations management. Event correlation facilitates root cause analysis so that banks can minimize ATM downtime and respond to issues before they impact customers. Fault analytics data can be mined to detect failure patterns and enable predictive analytics. Line of business managers have the ability to monitor their business KPIs and make informed decisions based on actionable data about their ATMs usage patterns. 3

4 Streamlining Cash Supply Chain Management Cash can account for percent of the total cost of operations for large ATM estates. If a bank s cash supply chain is not optimized, this can severely impact the profitability of its ATM channel. It is not uncommon for banks to have their high-transaction ATMs out of service due to low cash, while ATMs with low transaction volumes have an excess of cash sitting inside them. An integrated cash management solution enables banks to have real-time visibility into their ATMs cash consumption patterns and to prioritize their cash replenishment schedules. Forecasting and prediction capabilities enable them to forecast cash requirements and optimize vault cash management. ESQ s solution enables banks to correlate cash information from the ATM switch as well as from the device for finer granular cash management. A 5-10 percent reduction in cash requirements for an ATM estate of 10,000-20,000 ATMs can translate to significant cost-savings and improve ATM channel profitability. Maintenance and Cash Make Up 38% of Costs Cost Breakdown by Category 5% 3% 4% 8% 16% Depreciation Cash Replenishment Rent First Line Maintenance 5% 16% Second Line Maintenance Telecommunications 6% Back Office Operations 10% 12% 14% Terminal Driving Cost of Funds Corporate Overhead Other N=39 Data based on a 2012 CEB TowerGroup global survey of 86 banks with large, mid-size and small ATM estates. Source: CEB TowerGroup 4

5 Measure Business KPIs Transaction Throughput (TPS) Transaction Heat Map Interchange Response Time BINS with excessive denials Top Performing ATMs Failed Customer Interactions Service Provider Metrics Cash Low ATMs Blacklisted ATMs ATM Profitability Summary Enhancing the Customer Experience with Granular Transaction Management Why have some ATMs on my network suddenly gone out of service? Is it a problem with the switch, a third-party service provider, or my network? Why are customers complaining about slow response times? The siloed tools currently used for ATM management are inadequate to deliver the end-to-end transaction visibility needed for pinpointing problems and carrying out proactive remediation. They do not provide cross-tier realtime visibility across the entire ATM service delivery value chain including devices, the network, applications and middleware. OperationsBRIDGE has been designed to deliver operations intelligence. Apart from comprehensive monitoring of all tiers, it provides key actionable metrics such as device fault analytics, BIN usage patterns, transaction declines, response code analysis, response times, and other service metrics that can be used for effective customer experience management. As an example, one bank which is migrating deposit transactions from its teller channel to its self-service channel closely monitors failed customer interactions on its self-service devices as a key service metric using ESQ s transaction analytics solution. Another customer is leveraging the straightthrough dispatching capabilities provided by ESQ s integrated help desk solution for faster problem resolution. Delivering Business Outcomes with Integrated Life Cycle Management ESQ has helped several large banks and service providers migrate from legacy platforms to OperationsBRIDGE. Using ESQ s technology, they have a single pane of glass that provides full real-time visibility into their ATM network. Smart event management, run-book automation and straightthrough dispatching have significantly reduced the volume of tickets they send to their service desks. Having a single pane of glass view of their entire ATM estate will enable banks to pinpoint problems, resolve issues faster and deliver a superior customer experience. Harish Bhat, president and chief operating officer of ESQ Business Services 5

6 About the sponsor: Cupertino, Calif.-based ESQ Business Services, Inc. is the world s leading provider of enterprise-class business transaction management solutions that help banks, transaction processors, retailers and service providers proactively monitor and manage their business-critical ATM and other payment infrastructures. ESQ services its global customers through a network of offices in North America, Mexico, London, U.K., Singapore and India. For more information, visit Real-time visibility into their ATMs cash status has enabled these banks to optimize their cash replenishment schedules and minimize dead cash sitting in the ATMs. Operations staff are able to collaborate proactively to pinpoint problems and resolve issues. OperationsBridge has helped these banks transform their ATM operations management and provides a solid foundation for their branch transformation initiatives. ESQ Integrated ATM Management Solution Delivers Bottom Line Benefits Recovery Cme for outages reduced to 10 minutes vs 1 hour on legacy plaeorms Cash uclizacon improved from 65% to 82% ATM availability increased from 72% to 97.5% Delivering business outcomes FLM calls reduced by 20% due to remote management 200 work orders closed per month via remote resolucon Daily reports in real Cme vs 6 hours on legacy plaeorms 6