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What every bank CEO should know about their ATM network

Nikkin – The Japan Financial News speaks to KAL'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. What's the answer?

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.