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Customers ATM and KAL delivering next generation ATM products to Australia

Australian Banking & Finance, September 2010, "Customers launches smart ATMs"

A local ATM fleet operator has teamed up with two offshore partners to challenge the Australian market with a new breed of cash machines that they claim will deal with peak demands for cash in a smarter, faster way.

The total running costs for each ATM on a big network are estimated at $30,000 to $40,000 by Clint Walker, Customers ATM's chief operating officer. This is on top of a purchase price of the same order of magnitude. Walker reckons that these hefty figures, along with the ongoing work by banks to replace and upgrade their legacy systems, have opened up an opportunity to seize market share from rivals that he sees as "entrenched incumbents".

Customers ATM is piggybacking on a successful trial by Citibank in North America of the Nautilus Hyosung technology, running Kalignite (KAL) software, and will be teaming up with the global bank's Australian operations to roll out the Nautilus/KAL ATMs towards the end of this year and early next year.

"In the middle of last year, we set out to find a new software platform for the new Hyosung ATMs that Citibank had been using in North America"

says Walker. Customers approached all the major vendors, and settled on KAL - headquartered in Edinburgh – as the company's product is what Clinton says is 'true multivendor' in its ability to operate across different types of hardware.

KAL's chief executive officer, Aravinda Korala notes that his company's software runs on machines from 35 different manufacturers around the world. "Once we started doing that, it means we only have to implement new software functionality once, rather than multiple times for each of the manufacturers" he says.

Korala says KAL covers a 'super-set' of all the things seen at the various banks they have worked with globally, including recycling cash - that is, to apply cash deposited by some customers to meet withdrawals by others - all via ATMs.

Walker says this was another factor that swayed his company to choose KAL. 

"They have some advanced software available immediately to run on our network, such as mobile phone top-ups, to have multilingual ATMs and the ability to do foreign currency exchanges - the ability to dispense US dollars, or even New Zealand dollars at the airports and other tourist destinations".

Walker suggests that the push by Australian banks to replace their core banking systems and really push for multichannel integration will give his company the opportunity it needs to make inroads. 

"There are the simple things like personalisation of transactions, but then there are more complex tasks, such as simple product origination, like pre-approval of credit cards and the first stages of a mortgage application."

One of the qualities of the system that particularly impresses Clinton is the remote management capability of this network through one system. This means that banks will have the ability to change functionality as needed 'on the fly', according to Walker.

"For instance, the lunchtime rush that's just cash and dash. But equally, during other hours outside the lunchtime rush, they may want to add additional functionality, and this system allows this to be turned on and off so as not to create massive queue."

Also, there will be the opportunity to run localised marketing, to put messages on particular machines, but not across the entire network. Korala added that his software, combined with the right type of ATM, would be capable of automated currency exchanging. 

"Usually, though, the introduction of this type of function comes down to how the banks want to price the transactions" he says.

Other advances are in the decreasingly used area of cheques management and this is remains of great interest to small business operators. The software and hardware can also combine to allow self-service cheque deposits, rather than requiring the customer to wait until the cheque is collected and processed the next day by bank staff.

This is a very small part of the market that banks will find otherwise very hard to migrate customers across to a more automated treatment, suggests Clinton. He adds that intelligent deposits (such as counting and validating the notes deposited, and crediting them to the customer's account) and cash recycling are two of the biggest changes going on in offshore markets today.

Customers' push for more market share comes amid an increasing level of turmoil in the normally staid world of ATM fleet management. For instance, the high profile Bank of Queensland has moved to the rival rediATM, while the ANZ Bank has become the first major to offer foreign currency transaction in Australia.

Article orginally published in September 2010 Issue of Australian Banking & Finance

©Australian Banking & Finance 2010

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