Integrated Services Drive Branch Transformation

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1 Integrated Services Drive Branch Transformation By Bernd Kraus, VP Outsourcing and Managed Services at Wincor Nixdorf and Bart Milissen, Director Managed Services Banking The retail banking sector faces vast challenges. Banks interactions with customers are becoming more complex, given the need to manage and retain these relationships across multiple channels, such as the branch, the Self Service devices, online, and mobile. At the same time, market imperatives are forcing banks to constantly optimize their cost efficiency without impacting customer satisfaction. And a constant priority is the demand for legal and regulatory compliance. The way banks interact with customers needs to be redesigned to satisfy those challenges. The use of self-service technology and the way it is managed play a pivotal role. Equally important are the technical and managerial skills required to master the complexity of these systems and their availability requirements while at the same ensuring cost-efficiency. Transformation requirements and main levers As part of this transformation, ATMs, recyclers and all other self-service systems play an essential role in how banks interface with their customers. As touch points accessible around the clock and easy to use, these systems contribute decisively to increasing customer satisfaction. Through software driven functionality, they can be interlinked with other channels such as

2 mobile banking apps and used to offer new innovative services, including cardless cash withdrawal and prepaid card top-up. Beyond customer service benefits, self-service terminals are instrumental in offloading routine tasks from branch employees to increase productivity and focus them on providing consultative services and selling high-value products to consumers. However, extensive use of self-service technology results in significant investments and operational costs as well as special skill requirements for operations management. Nevertheless, with the right approach, self-service technology can be a great source of business value for banks. Optimizing ATM Channel Availability and Costs When it comes to the technical management of ATMs, availability is the be-all, end-all. Machines that aren t running are not only expensive but, perhaps even worse, are undermining a bank s efforts to retain and grow its customer base. We see demand for solutions that secure availability and all other functions fully end to end. In today s environment, availability is the ability of a device to service customers in all aspects. This includes supplying cash as well as keeping all software up to date and operational. Monitoring self-service devices around the clock is essential and a primary requirement for optimizing the ATM channel. The task requires a robust and proactive monitoring capability on multi-vendor and multi-type equipment. This capability, backed with premium event-correlation engines and knowledge databases, can timely spot events and prevent incidents in ATM hardware and software. A 24/7 remote monitoring service, such as the one provided by Wincor Nixdorf through its highly automated eservices Platform, enables not only preventive maintenance activities and software updates, but also transparent, real-time information. ATM operations need to contribute positively to the bottom line around the clock and 365 days a year. Cash handling can account for as much as 40

3 percent of the total cost of operations in large machine estates. Various cashhandling solutions are available to drive efficiencies, such as cash recyclers and cash-forecasting systems, which reduce the number of cash-in transit visits. However, they need to be properly integrated in end-to-end ATM fleet management processes to properly utilize them. Fleet Configuration and Associated Business Models By rightsizing the existing fleet and modernizing their ageing ATM management platforms, banks can establish a solid foundation for their branch transformation and omni-channel operations. Given innovation rates and the requirement to continuously enhance sales channel designs, banks run a risk to be locked in a certain technological state, a static fleet mix and last not least a fixed cost situation. Such a situation can be an obstacle to a continuous evolution of sales channels. This is where a service provider like Wincor Nixdorf can help banks flexibly adjust their ATM fleets. An even more consequent step is to provide the banking industry with dynamic pricing models. Two different schemes are possible: ATM as a service with a monthly fix fee per self-service device; and transaction as a service with a fix fee per transaction on the respective devices, turning fixed costs into variable costs. Under the latter model, banks own no infrastructure and pay purely on a per-transaction basis. Depending on a country s transaction pricing regime, such a model can be developed into a revenue sharing partnership between the bank and its service provider. By increasing availability and enhancing functionality and thus driving the number of transactions, the service provider generates greater interchange fees for the bank and transaction revenue. Dynamic pricing schemes are particularly attractive to cost-conscious banks seeking flexibility, optimization and cost reduction.

4 Channel Innovation Another big challenge facing banks is the development of omni-channel strategies and the implementation of new branch format..while some banks are changing today's classic network of branches in favor of automated branches and new branch formats, others are investing more strongly in online channels and are offering new functions on mobile devices such as smartphones or tablet PCs. It is essential that these various channels - assisted service, self-service, online banking and mobile banking - complement each other. Today's consumers want to freely choose between the individual channels. For instance, they may want to start a transaction in one channel and complete it seamlessly in another with a consistent user interface. In order to make such an omnichannel experience real, an interoperable software platform is required that is able to run transactional processes across a variety of components and interfaces. To keep such a complex IT eco-system up and running requires proper IT skills with end-to-end operational management competence. In this context, self-service devices become a powerful design element to develop innovative modes of interaction for branch customers. A smart combination of fact-to-face services with assisted or non-assisted self-services marries a high degree of automation with staff interaction, where it creates the highest value. This new breed of branches can be equipped with a wide range of state-of-the-art solutions, such as multi-touch screen-driven selfservice kiosks with two-way video and audio technology for interactive consulting; teller-assisted cash handling via cash recycles and automatic teller safes; digital signage to help navigate services, promote products and communicate the brand; wireless comfort zones for personal mobile online banking; and bank advisers with mobile tablet devices running an integrated customer relationship management app, ready to assist customers requiring help and remotely managing all branch devices and transactions.

5 ATM Fleet Management For banks, Wincor Nixdorf offers the entire value chain the latest hardware and software to power their ATM fleets, coupled with advanced services and trained personnel to manage them. We have years of experience in managing complex cash-management solutions and leveraging our self-service expertise for a variety of customers. Wincor Nixdorf delivers software platforms, integrates multi-vendor technologies and optimizes business processes at branches. The service provider takes over end-to-end responsibility to run complex branch networks with all involved technology components and also controls cash handling and all cash-based transactions through our cash-cycle management and payment processing services. By bundling all these services and achieving economies of scale, we re able to increase system availability to the maximum and decrease cost per transaction. In sum, we reduce total cost of ownership and enable innovation. This matches the top priorities of banks seeking to provide ATM service in the most cost-efficient way while delivering an even better customer experience.