Skip to Content
Login
Close

Quick Links

Category: Articles

Everyone wins when you enhance a banking app

Posted on by Uberbrand

People using their phone while waiting for a train
Times have changed. It’s now normal for consumers to buy their groceries, clothes and travel, read news, socialise and research major purchases via their phones. Even essential government services like Centrelink and Medicare are encouraging their customers to use their digital channels rather than face-to-face contact. Financial institutions must also provide opportunities for customers to complete more of their banking via digital channels.

A recent McKinsey and Company report[i] shows that customers across Asia – including Australia – have made a clear shift to digital banking in line with smartphone usage.

Mobile banking is now the preferred option for standard banking transactions such as checking account balances and paying bills. The report highlighted that deep digital engagement with customers can generate considerable value for banks: digitally active customers are stickier – they purchase 1.6 products per year, compared to 0.5 on average for non-digital customers; and active digital customers also own 1.5 times more banking products than their non-digital peers.

Enabling digital engagement at the front-end, where consumers interact with their bank’s services, is a crucial part of developing digitally active customers. Banking apps that are easy to navigate and rich in features provide a myriad of benefits to customers – and ultimately to financial institutions too.

Driving engagement with card and PIN controls

You can improve the richness of your existing digital channels, like banking apps, by introducing new functionality. This can increase your customers’ ability to self-service, encouraging ongoing, regular use of your banking services and improving their loyalty to your brand.

For a customer managing their banking, the ability to manage their card PIN through their banking app – rather than having to make time to visit the branch – is a perfect example of how a banking app which is rich in functionality can better meet customers’ needs. Indeed, for a customer with a crisis out of hours where they need money and have forgotten their PIN, the ability to take control and solve the problem themselves, using their banking app, can be an instant stress reliever.

Implementing enhanced card controls within a banking app is another great way to engage customers by giving them the tangible benefit of real-time management of their cards. Allowing customers to turn certain transaction types on and off with a swipe of their finger, or activate limit-based transaction blocks, creates both financially savvy and digitally engaged customers.

Enabling or disabling contactless payments, switching online or card not present transactions on and off, activating or de-activating ATM transactions (for domestic or overseas transactions) are all examples of everyday interactions banks can create for customers within their banking app. Some customers are asking for further controls, such as setting blocks on merchant categories and being notified when transactions are approved or declined.

Benefits for financial institutions

There is benefit for banks in moving functionality into online or digital channels.

Empowering customers to self-serve helps to lower cost-to-service metrics and enables customer service staff to focus on other priorities and higher value transactions.

Using a banking app as a delivery channel can help solve pain points for both customers and financial institutions. A good example of this is the emergence of virtual card capabilities, to support instant card issuance. This technology allows a financial institution to digitally issue a card to a customer via their banking app or internet banking platform. The customer receives their digital card almost immediately after the order is processed. They can set their PIN, activate the card and use it online straight away. The card can also be provisioned to a digital wallet such as Apple Pay, Google Pay, Samsung Pay or a wearable like Fitbit Pay or Garmin Pay, and be used straight away, anywhere contactless transactions are accepted. No more waiting for several days for the plastic card to arrive before you can start spending.

Instant card issuance is a win for both institutions and customers. The financial institution earns transaction revenue sooner than with the traditional card and PIN ordering process, and saves money because plastic cards and PINs don’t need to be created or sent to customers. Cardholders benefit as they no longer need to worry about their PIN falling into the wrong hands, or wait for their card to arrive before spending in stores or online.

Your best friend when disaster strikes

Digitally issued cards also go a long way to solving the lost card problem – because there isn’t a card to lose! And a virtual card on the phone, even if it is lost, is protected by the phone’s security.

And finally, if a customer loses their physical card – especially if they are travelling – being able to issue a virtual card instantly means that the customer isn’t stranded. It’s conceivable that they could lose their plastic card at breakfast on their last day, login to the app, cancel the old card and set up a new virtual card on their phone in time to check out of their hotel and go to the airport.

Without instant card issuance, the customer could have been stranded for days, or even a week.

At Cuscal, we are collaborating with our clients to help them offer engaging and innovative banking experiences to their customers. Our current suite of products is designed to promote efficiencies in banking operations and create self-service opportunities for cardholders. Our API suite includes enhanced card control APIs, PIN management APIs (including PIN change and PIN set functionality) and a virtual card set to facilitate instant card issuance.

These are dynamic times for financial institutions and we are excited to be assisting our clients to develop solutions that support a more digital way of banking.

By Lauren McCormack, Head of EFT, Acquiring and Digital

[i] Sonia Barquin, Viniyak, HV, Duhita Shrikhande, Asia’s digital banking race: giving customers what they want, McKinsey & Company, Global Banking Practice, April 2018

Cuscal hits female leadership targets

Posted on by Uberbrand

Cuscal's female leadership with MD Craig Kennedy

A gradual increase in the number of senior female appointments in recent years has helped Cuscal to hit its target of 40% of senior leadership roles to be held by women.

In May this year Helen Mediati, Cuscal’s General Counsel and Company Secretary was appointed to Cuscal’s Leadership Team. This followed the appointment of Bianca Bates to the role of Chief Client Officer, earlier the same month. Cuscal’s Managing Director, Craig Kennedy, says it has been a deliberate part of Cuscal’s long-term strategy:

“Cuscal is a payments company which straddles the worlds of technology and banking, both industries which struggle with gender diversity and female leadership.

We knew that having greater gender balance in our leadership would help make us a stronger, fairer, better company, so we have been working towards a goal of greater senior female leadership for a few years now. Three out of seven of my Leadership Team are now women (43%) and this ratio is consistent throughout leadership positions at Cuscal.

We know there’s still some way to go, for example our diversity at Board level isn’t what we would like it to be, but we’re pleased to hit this target and now need to maintain or improve it.”

Cuscal has employed a range of initiatives to improve diversity, female employment and leadership at Cuscal which include:

  • Creating a Women’s Initiative Network three years ago and then a Diversity and Inclusion Council
  • Mandating that recruiters include at least one suitably qualified female applicant for each role
  • Trialling blind resumes in the project and technology division
  • Reviewing our flexibility policies to ensure consistency in application
  • Extending paid paternity leave from one week to four weeks.

As of May 2018, Cuscal’s ratio of male/female employees was:

  • Board: 13% female, 87% male
  • Leadership Team: 43% female, 57% male
  • All employees: 40% female, 60% male

Pictured L to R: Bianca Bates, Craig Kennedy, Helen Mediati, Christie Welsh

Cuscal appoints Bianca Bates as Chief Client Officer

Posted on by Rachael Shupe

Picture of Bianca Bates, the new Chief Client OfficerCuscal has appointed Bianca Bates to the role of Chief Client Officer, as part of Cuscal’s Leadership Team. This role replaces the role of General Manager, Product & Service, which Bianca has been acting in since February 2018.

Commenting on the appointment, Cuscal Managing Director Craig Kennedy said:

The Cuscal Board has confirmed Bianca’s appointment after an extensive search for the right candidate. I’m delighted that Bianca was successful and will continue her career at Cuscal after her success in previous roles over the past four years.

The change in title reflects our commitment to partnering with our clients and delivering a great client experience. Bianca brings significant experience in financial services and our business to this role, including, crucially, a great understanding of the needs of our clients.

Bianca has held a number of senior roles at Cuscal since she joined, including Acting General Manager, Product & Service, General Counsel & Company Secretary, Acting General Manager Shared Services and Head of Client Services. She has over 20 years’ experience in financial services with large and complex US and Australian companies, both public and private. Prior to Cuscal she worked in senior legal and compliance company secretariat roles with Genworth, GE Capital and DLA Phillips Fox.

Aussies want to pay with their phones

Posted on by Uberbrand

A person paying a merchant with their phone

In the highly competitive environment of consumer banking, finding comparative advantage over major players is a rare opportunity. However, recent research by Telsyte shows clearly that the reluctance of major banks to adopt digital wallets such as Apple Pay, Google Pay (formerly Android Pay) and Samsung Pay has created an opportunity for those institutions who have led the way in offering their customers more choice in the way they pay.

Aussies will move banks to pay with their phones or wearables
Recent research shows that mobile and wearable payment solutions like Apple Pay, Google Pay and Samsung Pay are increasingly influencing consumers’ choice of financial institutions.

The Telsyte study found that around one in five (22 per cent) iPhone users claim they are more likely to bank with a provider if it supports Apple Pay. This figure increases to 32 per cent for those who are also using an Apple Watch. This research shows a clear opportunity for financial institutions to differentiate from the major banks to acquire new customers – particularly those using Apple devices.

Mobile payments are growing in Australia
Although the number of payments made by mobile devices is still comparatively small, the use of mobile payments is growing quickly year on year. The RBA reported in its 2017 Consumer Report that only 2% of consumers had used a smartphone, watch or band to make a payment. This figure has grown exponentially to 14%, according to Telsyte’s study in 2018. This could be due to increasing understanding amongst consumers that mobile payments are more secure than Tap & Pay cards, which I discussed in my recent article on digital wallet security.

Other key takeaways from Telsyte’s research that have implications for financial institutions that are considering offering mobile payments to their customers include:

  • Smartphone sales were up 11% year on year, 9.2 million units sold in 2017
  • There are 19.3 million smartphones in circulation in Australia
  • Android/Google based smartphones made up 55% market share, Apple with 45%
  • Growing price is being driven by need for greater internal storage (supporting greater capabilities and use)
  • 85% of consumers replace an Apple iPhone with another iPhone, Samsung at 70%
  • For the first time, more smartwatches were sold than smart bands in 2017 (58% v 42%)
  • Apple watches lead the smart wrist wearables market in Australia, with now over 1 million Apple smartwatches in the country. FitBit were the leader in smart band devices

We were an early partner and adopter of mobile payment solutions, offering Apple Pay, Google Pay and Samsung Pay to our clients. At Cuscal we support over 41 financial institutions offering Apple Pay, Google Pay and/or Samsung Pay to their customers.

By Trent Gunthorpe, Head of EFT, Acquiring and Digital

Smartphones – high security digital wallets

Posted on by Uberbrand

Customer paying with a digital wallet on a smartphone

When it comes to purchase convenience and security, Tap & Pay cards are the current leaders. But it is becoming clear that digital wallets are in the running to replace them. It is no longer a matter of “if” but “when”, with today’s announcement that eftpos cardholders can now use Apple Pay, adding to the suite of card schemes available on digital wallets. In addition to the convenience and ease-of-use benefits of digital wallets, it’s their cutting-edge, multi-layer security that makes them the better and safer option for payments.

However, surveys consistently show that customers are concerned about the safety of digital wallets. This concern arises in part from poor communication on how digital wallets are implemented and how they work. Digital wallets were designed to address the security flaws in cards and create a more secure payment method. They are safer than cards, by design, and their security starts with the smartphone.

The multi-layer security of the digital wallet
The security advantage digital wallets have over cards begins with their access to the computing power and features of the smartphone, including specialised security hardware for protecting personal information. This gives the digital wallet app secure storage for payment information where other apps or malware cannot access it.

  1. The first layer of security in a digital wallet comes into play when cards are added to the digital wallet app. Cards can be added using the phone’s camera, typing them in, or transferring them directly from some financial institutions’ apps. The app requires that the person adding the cards is verified as the owner of the cards before they can make payments. This may involve a one-time password sent via SMS to the phone or via email, or even a quick chat with customer service.
  2. The second security layer is the customer and how they control access to their phone. That control can be a PIN or pattern passcode, and, on more recent smartphones, biometric verification using their fingerprint, face or eyes. If the phone is lost, no one can use its digital wallet to make purchases without passing verification. However, for ease of use, some digital wallets do allow the customer to make small purchases without unlocking their phone.
  3. The third layer of security is called tokenisation. To increase transaction security, digital wallets do not store card details or share them when a payment is made. Instead, a token is generated when a card is added. This token is transmitted instead of the card details when a payment is made.

The token is a unique number that links the card to the customer’s device and digital wallet. This allows a customer to register the same card on multiple devices and with multiple digital wallet providers. It is generated by the payment infrastructure provider used by the digital wallet. The payment infrastructure provider stores the original account information on a heavily secured system called a Token Vault.

When a transaction is made the token is used by the payment processor to retrieve and verify the original card information from the Token Vault and complete the transfer of funds. The merchant never sees the actual card details and the account information never travels outside of secure networks. An additional benefit of tokenization is if the user loses their phone they do not need to cancel their card, but they do need to lock or remove the card from their digital wallet. Digital wallet providers have online services to do this in the event of a lost phone.

Finally, digital wallets are protected by the same 24/7 computer-based fraud monitoring and zero liability protections as Tap & Pay cards.

More than POS payments
Digital wallet providers are actively expanding the functionality of their apps. Digital wallets can be used to make purchases within apps and for online purchases. Some digital wallets can automatically provide your delivery address as part of an online transaction. The digital wallet may also store loyalty cards, event tickets and boarding passes that can be scanned from the screen of the phone.

As more transaction types are handled by digital wallets their use will continue to grow. With that growth will come a demand for financial institutions to offer their customers access to the digital wallet provider of their choice. Banks that won’t or can’t will lose customers.

Transitioning to digital wallets
Customers are already choosing financial institutions that are compatible with their phone and digital wallet provider. This is a clear signal that the technology is proven and spreading from early adopters to the mainstream. At the same time, the back office technology has been tried and tested. Deploying digital wallet services is now easier than ever.

Today or tomorrow, your customers are going digital. Be there for them. Find out more about our digital solutions.

By Trent Gunthorpe, Head of EFT, Acquiring and Digital

Fraud and AI: what you need to know

Posted on by Uberbrand

Artificial Intelligence (AI) is already having a significant impact on the way we do business today. From helpful chat bots guiding us through complex purchase journeys to detecting potentially fraudulent payments, AI has the potential to create seamless customer experiences while simultaneously processing large amounts of information.

Machine learning frees humans from the grunt work of data tracking and pattern analysis – it’s faster, more scalable and learns from past information. No wonder Gartner predicts that more than 40% of data science tasks will be automated by 2020.

So when it comes to balancing customer demand for real-time payments with secure fraud-mitigating authentication, AI is an effective enabling tool for fraud teams to focus their investigation skills in the best place to securely ensure the speed and rigour required for a real-time payment. And that’s why more organisations are exploring the use of AI, especially in the area of fraud.

What role could AI play in fraud prevention and detection?

Through machine learning, the complexity of big data really becomes useful. At Cuscal, we have partnered with Feedzai to provide an advanced risk management platform that will be core to protecting Cuscal clients from the evolving threat of fraud.

“When using Feedzai, banks have significantly improved fraud detection, reduced false positives and overall a better customer experience – outperforming leading non-AI solutions – that’s why banks like Citi and Capital One have backed Feedzai’s technology.” said Richard Harris, SVP Sales International from Feedzai.”

With so many more payment channels available – online, mobile, P2P – there are more points of vulnerability. More than ever, we need a complete view of customer activity across products, an integration of channels to improve the customer experience, and to make more data-backed business decisions.

How will AI strengthen existing fraud protection systems?

With AI’s ability to analyse complex data in real time, fraud teams are better equipped to predict fraud before it occurs and so minimise losses.  AI reduces some of the noise of large amounts of data to focus on the real threats.  As we prepare to launch the New Payments Platform (NPP) in Australia, we can expect to see digital transaction processing converge with analytics providing better insights. Machine learning will enable organisations to look at more data, from more sources, and make better predictions with less uncertainty.

Of course, bots could be working on both sides – and the next generation of AI-enabled fraud systems will also need to be prepared to tackle new and increasingly sophisticated fraud attempts and scams.

Every Australian financial institution connecting to the New Payments Platform (NPP) needs to consider their real-time fraud monitoring and ensure effective controls are in place. AI is likely to underpin best practice – checking every transaction in real time for anomalies and flagging suspicious activity for action by experienced fraud investigation teams.

Learn more about preventing fraud in a real-time world.

Fraud prevention: then and now

Fraud & AI Infographic

Learn more about preventing fraud in a real-time world.

By Michelle Trundle, Senior Manager, Fraud

4 ways financial institutions are preparing for the NPP

Posted on by Uberbrand

People sitting in a row using digital devices

What happens when payments are as easy and immediate as sending a text message? While the digital opportunities of Australia’s new super-fast payments system are exciting, its speed may also increase the potential risk of fraudulent transactions. The NPP (New Payments Platform) isn’t more vulnerable to security breaches, but banks will no longer have the luxury of time to detect and respond to fraudulent or suspicious transactions.

And that’s why Australian financial institutions are already preparing for NPP – by shifting their risk focus to planning and prevention.

The NPP is a platform that enables real-time clearing and settlement for simple or complex payment solutions, between two people or between many. When it launches next year, almost all Australian bank account holders will be able to make and receive payments in seconds.

The promise of bank transfers clearing almost instantly – even on bank holidays and weekends – is alluring for consumers, business and government. But when payments happen faster, there won’t be time for our tried and tested detection processes. Based on the UK’s experience with its Faster Payment Service, the most common risk is likely to be social engineering scams, where fraudsters convince a customer to make a payment by posing as a trusted brand. Account compromises and mule accounts (for money laundering) are other possible fraud issues.

Any financial institution connecting to the NPP will need to have real-time fraud detection and response controls in place.

As one of the primary architects of the NPP, Cuscal is working with more than 30 financial institutions to securely connect to this game-changing banking infrastructure. Here are four ways we’re working with our clients to get ready.

1. Preparing for PayID verification. 

Forget BSBs and account numbers – with the NPP, bank accounts can be linked to the customer’s email address or mobile phone number. Easier to remember, these PayIDs are directly associated with the actual account name so there’s less risk of paying the wrong person. While this will help ensure payments go to the right place – it will also impact current payment verification protocols.

Financial institutions are responsible for registering customer information in PayID, and may be liable for any loss that results from incorrect or fraudulent data input. That’s why the account name associated with the PayID is an important control checkpoint and one banks need to pay particular attention to.

2. Setting strong controls for detail changes. 

Every PayID can be changed – for example, if a customer gets a new phone number – so banks are setting up new control processes to ensure customer detail updates are verified. Participating financial institutions can also set their own customer transaction limits.

Reassuringly, the NPP solely focuses on actively authorised payments: every payment must be approved by the account holder so there is no assumption of authority (as there is with direct debits or can be with credit card payments). This protection complements the strong authentication procedures that banks have in place when updating account details, as knowing the account number is not enough for a fraudster to access someone else’s account.

3. Sharing knowledge. 

Typical customer payment patterns are critical for fraud prevention, and Australian banks already have good visibility of this data. By working with Australian financial crime investigation and enforcement agencies, institutions are able to quickly identify scams and other fraudulent activity.

Financial institutions can supplement this shared knowledge with additional layers of real-time fraud monitoring. At Cuscal this includes a specialist fraud monitoring team, AI-enabled pattern recognition and data analysis and integration with the NPP’s inbuilt fraud detection capabilities.

4. Educating customers. 

Changing habits is always hard – so to establish trust in the security of this payment platform, financial institutions are investing in ongoing education programs. As well as helping Australian consumers and businesses select and manage their PayIDs, they are building awareness of current scams, how to report fraudulent transactions, and how to protect their identity.

Our digital economy never sleeps – but neither will fraudsters. To ensure the NPP doesn’t open the door to a new scam opportunity, Australia’s financial institutions are already preparing for this latest wave of payment innovation.

Learn more about preventing fraud in a real-time world.

By Nathan Churchward, Senior Manager, Payments

New rediATM Finder app launched today

Posted on by Rachael Shupe

Man smiling using the rediATM Finder app

We are launching a new rediATM Finder app for both Android and iPhone devices today. This app has a new look and feel, is easier to use and has improved filtering and search functionality.

New change PIN ATM finder
A highly desirable new feature of the app is it now allows users to find a rediATM, where they can change their PIN. The app user just needs to belong to a financial institution which is a part of the rediATM network.

The rediATM network is made up of more than 90 financial institutions, of all sizes, including NAB, BOQ, CUA, People’s Choice Credit Union and Suncorp.

rediATM Finder app
The rediATM Finder app is available for free in the App Store and Google Play.

Current users of the rediATM Finder app, will just need to update to the new version of the app.

Disclaimer: 1. There is no fee for the rediATM Finder app, but an Internet connection is required to download the application. 2. Data charges may apply to both the downloading of the application and the use of the application on your mobile device. Check with your relevant service provider for more details.

Payments insights from Money 20/20 in Europe

Posted on by Uberbrand

map of Europe with flags

I recently returned from a study tour to the world’s largest fintech event, the Money 20/20 conference in Copenhagen. We also met with major banks in Poland, which has one of the fastest growing economies in Europe and a payments industry with similar challenges to those in Australia. I was joined on the trip by my colleagues Bianca Bates, Head of Client Services and Rob Bell, General Manager, Product & Service.

Here are my reflections on how financial institutions are responding to the changing payments sector in Europe.

The dual threats to European payments: global tech giants & fintechs
Traditional banks are facing significant challenges in Europe. On the one side, global tech giants such as Alibaba, Amazon, Apple, Google and Facebook are capitalising on their significant scale and consumer trust to grow their share of the finance value chain, particularly the relationship with the customer. On the other side, small fintechs are able to innovate much more quickly than banks.

The threat posed by global tech giants and small fintechs is growing with Payments Service Directive 2 (PSD2) coming into force in 2018. PSD2 mandates for financial institutions to make cardholder data accessible to third-parties. It will mean that the end-user will own their transaction data and be able to choose who sees and uses the information. This open data directive will promote competition and innovation in the payments sector, meaning it will be much easier for tech giants and fintechs to take market share from traditional banks.

The threats to large financial institutions presented by PSD2 in Europe could soon be seen in Australia, with the Australian Productivity Commission’s recent report on data availability and use favouring open data, and the resulting transformation of our financial system and economy. This makes the insights on how European banks are responding to the directive particularly pertinent to Australian banks.
European financial institutions are responding to these threats in four main ways:

1. Collaborate to fend off competition
We saw examples of strong collaboration in both Poland and Denmark in response to these emerging competitors.

Danish banks, through aggregator company Nets, launched a very successful real time payments system, RealTime24/7, in the domestic market in 2014. This is the equivalent of the New Payments Platform (NPP), launching in Australia later this year.

The faster payments platform implementation in Denmark saw strong collaboration across the industry – they did not compete on their front end applications or by customising the solution for each bank. All Danish banks share the real time payments app, MobilePay, which uses its faster payments platform. The system has 4 million users (out of a population of 5.5 million), and 7 out of 8 transactions are originated by the app, largely replacing cash transactions.

Danish banks have also enabled Bluetooth at POS terminals so customers can use their mobile to pay via the faster payments platform.

Collaborating to make the most of the faster payments platform and making its use easy for consumers has helped financial institutions in Denmark to retain market share.

2. Invest in innovation hubs outside of financial institutions
Many banks have responded to the threat posed by fintech innovation by creating their own ‘incubators’, but generally they are still unable to move as quickly as nimbler, smaller fintech companies. Many speakers at Money 20/20 believe that partnering with smaller fintechs, or buying them, is a more successful strategy for innovation than trying to replicate them within a financial institution.

We saw a different approach in Poland, where a group of Visa clients from across Europe established an innovation hub with €20m budget in order to drive innovation across the payments ecosystem.

3. Innovate fast to compete directly with tech giants
PKO Bank Polski, the market-leading bank in Poland, developed an app to allow POS and P2P payments. The app lets customers generate a code for paying at POS terminals, or withdrawing cash at ATMs (similar to cardless cash in Australia). They sold the app into a joint venture with some of their competitors to get 60-70% of the market share. This is an example of a financial institution seizing an opportunity for technology to disrupt the payments market before the entrance of international competitors.

4. Focus on customer experience
A major theme emerging from our meetings and the Money 20/20 conference was the importance of the customer journey experience. This is an area that the global tech giants excel at, and something that financial institutions are increasingly concentrating on.

We heard that removing friction from the customer experience was critical for engagement. The slightest friction in a transaction can result in it being abandoned. Tech giants like Apple and Alibaba are very good at reducing friction for consumers, and banks are playing catch up to stay competitive.

Overall it was a valuable trip to learn about the challenges facing European financial institutions and the varying success of strategies to respond to those challenges, with many learnings for the Australian payments industry.

By Lauren McCormack, Senior Manager, EFT & rediATMs

Managing ATM fleets in a cashless Australia

Posted on by Uberbrand

Three ATMs in a brick wall

The recent announcement that Suncorp will be joining our rediATM network is the latest example of a financial institution adjusting to the gradual decline of cash and ATMs. Cash usage is down 22% over the past five years and ATM transactions are at a 15-year low. Against this backdrop, financial institutions are looking closely at how to manage their ATM fleets.

But while ATM usage is declining, they’re not gone yet. ATMs remain a convenient and secure way for customers to access their money, and are a more economical option than bank branches for financial institutions to maintain a physical presence. Contactless and digital payments are on the rise, but many people still like the feel of cold hard cash in their hands. So the question is: how do you balance the decline in ATM use with the existing needs of customers?

In these times, consolidation and sharing of ATM facilities is the best move for most financial institutions. It’s a good way to reduce expenditure in a declining market without exiting altogether. In the ATM industry we saw Cardtronics acquire DCPayments in October last year, adding 25,000 ATMs to its global portfolio of 225,000. Combined with the recent Suncorp announcement, there’s little doubt that more consolidation is on the horizon.

The cost of remaining relevant
Along with the constant maintenance expenses that come with owning an ATM fleet, there are some hefty and unavoidable new costs approaching in Australia.

For instance, the arrival of the next generation banknotes and their enhanced security features will necessitate a hardware upgrade. The new $10 note to be introduced later this year will mean changes for accepting deposits, while the new $50 note, coming next year, will mean dispensing hardware across the country also needs to be upgraded.

At the same time, ATM owners need to evolve their offering to remain relevant and increase the range of functions they provide. In the coming year, we will upgrade our rediATMs with new technologies that will make them more useful to customers and more valuable to financial institutions. Here are just a few of the innovations planned for the near future:

  • Paperless receipts – receive your receipts via sms or email
  • Contactless ATMs – rediATM will soon release contactless functionality
  • Cardless cash – customers can get a code from their mobile banking app to use at selected rediATMs.

These changes, and others to come, will continue to turn ATMs into secure self-service portals that will reduce branch costs for financial institutions while providing 24/7 service to customers. Sharing your ATM network will allow you to offer innovation and balance the cost of providing points of presence across Australia.

Innovation and maintenance comes at a cost, and that investment is being made in a climate of declining ATM use. So is it worth the investment?

Why shared ATM networks are the way to go
Reducing costs is a major driving factor for joining a shared ATM network – but these agreements also benefit financial institutions in several other ways. For example:

  • Providing increased ATM locations to your customers without deploying additional machines
  • Setting an agreed strategic direction through established governance practice for the network, such as the rediATM Advisory Council
  • Benefiting from collective knowledge and experience to guide the development of the ATM fleet and navigate the cashless world
  • Ensuring your customers can access cash when and where they need it, anywhere in Australia.

Shared ATM networks are not only popular in Australia as a way to reduce costs while continuing to provide a popular service to customers. Bankdata in Denmark manages a national ATM fleet for 11 Danish banks, providing a service that not only reduces maintenance costs for financial institutions, but also maintains brand integrity via digital messaging on the machines once the customer has inserted their card. It’s another example of how a shared scheme can be the best option for financial institutions to provide this still essential service to their customers.

The trend of consolidation for ATM fleets is only just beginning. With upcoming investment necessary to maintain ATM fleets, it’s the right time for financial institutions to consider their options. Joining a shared ATM network like rediATM is the cost-effective way to reduce expenditure while maintaining essential services and points of presence for customers.

By Lauren McCormack, Senior Manager, EFT & rediATMs