Competitive advantage, risk mitigation and management costs are three key criteria which leaders should consider when deciding whether to outsource business activities rather than managing them. So, the three main questions you need to ask yourself before outsourcing a business function are:
Is outsourcing going to give us a competitive advantage?
Is it going to increase our ability to mitigate risk?
Is it going to generate additional value and more value than the incurred cost?
These three questions are valid whatever industry you work in and this blog considers them through the lens of a financial institution (FI) currently offering a self-service channel to their clientele.
Competitive Advantage
Competitive advantage can be multifaceted. It will certainly depend on the placement of your ATM network and how much you cover strategic locations, the critical mass you have reached and the type of functionality you are offering to consumers. It will depend on the equipment you have in place. Is the design attractive? Does it offer a compelling, personalized user experience? Are contactless and cardless transactions supported? Availability is certainly another key to competitiveness. A high-performing network will certainly give you the edge and ensure loyalty from on-us consumers and off-us consumers who enjoy the convenience of your service.
Risk Mitigation
The financial services industry is certainly one of the most exposed to risk in terms of the breadth and constant evolution of possible threats, not to mention the stakes that these risks represent—whether they are financial or brand reputation related. Unattended, 24/7 self-service environments and open-standardized software architecture makes the ATM a prime target for criminals to exploit vulnerabilities and loopholes in security processes, management and monitoring. Hence all the attention required to ensure that all layers of software powering your self-service channel are constantly maintained and updated, and comply with all regulations in force.
Safeguarding against physical attacks with a set of countermeasures including video surveillance and anti-skimming solutions, to list only a few, is crucial too. And what about the risk of business interruptions caused by out-of-service events? We hear from our customers that unavailability of an ATM can lead to lower customer loyalty and even customer attrition.
Cost Management
While FIs are on a mission to continuously improve customer journeys and deepen consumer interaction, they also face times of scarce capital and competing needs for investment in technology refresh or service enhancement. The challenge is to balance the equation with maximized shareholder and stakeholder value. Thanks to a flexible technology stack, you can regularly introduce innovations to consumers, make the most of the engagement capabilities offered by the self-service channel, and maintain all required standards. With the cost of cash representing up to 50% of the annual TCO, you also need to find the right balance between maintaining cash availability while optimizing logistics and idle cash costs. And as running an ATM fleet requires a broad set of skills and expertise, best-in-class practices and a wide range of sophisticated tools and infrastructure, what is best? Outsourcing the management of your self-service channel can certainly help streamline in-house staff resources, reduce investments in expensive management tools and related upkeep costs. You gain from economies of scale and more cost-efficient channel management.
Managed Services: A Game-Changer for Your ATM Fleet
Whether you are a small or large organization, whether you have a regional, national or international footprint, my first piece of advice is for you to read the new DN Managed Services Guide:
Self-Service Channel Management: Remove the Complexity. Unlock the Potential. It is designed to help you identify and unpack the 12 key areas required for successful self-service channel management. Armed with that knowledge, you can make educated and thoughtful decisions about how to maximize your resources with the day-to-day and strategic support of a managed services partnership.
Diebold Nixdorf has the world’s largest installed ATM base, close to 1 million devices, and service has always been in our DNA. As a company, we have offered managed services for self-service equipment for over 20 years and we currently manage more than 200,000 devices across the globe.
In the guide, selected FIs join forces with DN to explain how their self-service channel has become more profitable, innovative and growth-generating while their organization became more nimble, efficient and faster at unlocking value and potential. For instance, German bank Sparkasse Hannover’s 450 ATM fleet features continuously availability above 99% and has benefitted from a TCO reduction by up to 40%. This is only one of the many examples that the guide features.
Get your copy of the guide below and share with your colleagues as collective knowledge is always the first step to success.
