Nikkin interviews KAL CEO on the spread of integrated ATM software around the world

Nikkin interviews KAL CEO on the move to integrated ATM software around the world

Nikkin – The Japan Financial News, 18th February 2011, Adoption of integrated ATM software spreads around the world

KAL, based in Edinburgh, UK, develops multi-vendor ATM software and ATM management software. The Kalignite Software Suite is compatible with all ATMs around the world irrespective of their vendor. Over 100,000 ATMs globally use the software including those of Citigroup and the China Construction Bank. We spoke to the company's CEO Aravinda Korala about future prospects for ATM software and overseas ATM trends.

Q. What are the merits of using ATM software that is compatible with multiple vendors?

A. The biggest benefit is that the same software can be used on all of a bank's ATMs. Financial institutions generally purchase ATM machines from more than one vendor, and ATM software is different for each vendor and each machine type. When the time comes to update the software, work is required for each different piece of software, and this causes unnecessary additional cost. If a bank integrates its ATM software, low-cost, rapid updates become possible, and this contributes to improved customer service.

Q. What are the current trends in the overseas ATM market?

A. Banks in Europe, North America and China are increasingly integrating their ATM software through the adoption of the Kalignite platform, principally in order to reduce operating costs. For example, China Construction Bank purchases ATMs from 11 different vendors, and previously they had to incur significant software upgrade and operating costs.

Q. In Japan, the increasing prevalence of ATMs at convenience stores and other factors have led to lower ATM fees. There is a growing need for banks to upgrade their systems to allow for the use of IC-chip enabled cards, and operating expenses are now an issue.

A. The solution to this problem is to reduce operating expenses by integrating ATM software. Integrating ATM software allows banks to choose the optimum ATM machine type regardless of vendor. This prevents vendors from protecting their own interests and leads to downward pressure on ATM prices. 

In actual fact, in Europe, North America and China, the downward trend ATM hardware prices are in line with the progress of ATM software integration. Domestic Japanese ATMs need to be rendered compatible with international security standards such as EMV. They also need to permit the use of overseas-issued cards. 

Since banks can receive higher ATM fees for the use of overseas-issued cards than they can for domestic Japanese cards, this leads to an improvement in ATM fee revenue.