Financial institutions survive by their ability to facilitate wise and beneficial moves with money. However, doing what’s best financially isn’t always as easy for the institution as you’d expect. Such is the case with ATMs.
The best investment is one that pays for itself over time. However, some banking technology doesn’t always bring in as much money as it costs. When technology presents a low or negative return on investment (ROI), it’s important to analyze what contributes to the cost—and how to reduce it where possible.
ATMs are one such technology. While ATMs often experience high transaction volumes, nearly 80% of those transactions don’t incur a direct charge. Consequently, ATM fees don’t typically cover the costs of supporting an ATM network. But financial institutions can’t just do away with ATMs—most consumers still think of them as essential banking channels, and for some, ATMs have replaced the in-branch experience entirely.
So, how can banks and credit unions continue to provide critical services—especially in high impact locations?
Four Ways to Maximize ATM ROI
There are four strategies that financial institutions can take to get the most out of their ATMs. The best part? They can do it without breaking the bank, so to speak. (Please forgive us.)
1. Think holistically. Calculating the ROI on ATMs isn’t as simple as measuring the initial price tag against the revenue they bring in from fees. ATMs have complex lifecycles, and each part of that lifecycle introduces new costs, new revenues, and new opportunities.
For example, ATM lifecycle management partners will help you extend the life of your fleet in several ways:
o Refurbishing fleets several times reduces the need for new ATMs
o Remarketing used models recoups a good portion of the sticker cost
o Reusing and recycling parts contributes to the refurbishment process
All of the options above lead to significant cost savings. With ATM lifecycle management, financial institutions can effectively sell back used machines and parts to continue funding improvements to their fleets.
2. Think ahead. Aligning annual preventive maintenance with upgrades or new software installations also helps to increase ATM ROI. Handling maintenance, upgrades, and installations at the same time reduces the number of service calls needed at each ATM.
Alignment means less money spent on service and repair trips—and more uptime to provide service and collect fees.
3. Think about the little things. The price tag for an ATM reflects only the cost of the machine. Supply chain logistics are often an afterthought in the final total cost of ownership (TCO), but they present several opportunities for cost savings.
Banks and credit unions should remember to factor in the cost of storage, freight, installation, rigging, cleaning, power consumption, maintenance, and even ATM disposal and recycling.
A good ATM supplier will be able to help financial institutions realize savings in each stage of the ATM lifecycle.
4. Think outside the box. It’s easy to forget that ROI doesn’t measure key intangibles. For example, clean, functional, modern, and expansive ATM fleets are key differentiators that influence consumer banking choices. An institution’s brand presence and experience are thus partially built on and supported by their ATM network.
Additionally, banks and credit unions that optimize ATMs as marketing channels can see even more returns on ROI. Increased functionality combined with compliant, safe, secure, and functioning ATMs builds trust through positive interactions, ultimately leading to more ATM users and transactions.
Understanding the ROI of ATMs and ATM fleets means understanding all of the potential costs, revenue, and benefits. Often, the non-financial benefits are just as important for a brand.
If you’d like to better understand the ROI of your institution’s ATMs, contact Tellerex about your current spend, where you can save money, and where you can make some of that money back.