Industry experts spread across five continents attended an online workshop, hosted by Stanchion Payments Solutions, to discuss opportunities for the use of automation tools in ATM environments to drive revenue growth, ensure relevance, and control operational costs, in the face of ongoing challenges brought about by pandemic restrictions and changes in customer behaviour.
The event, supported by Futurex, NCR and Paragon, highlighted opportunities for ATM operators to add value to their clients by increasing flexibility while containing or reducing costs. Speakers covered a range of forward-thinking solutions, from using automation tools for testing ATM environments and skills augmentation, to the virtualisation of ATM switches and how operators can utilise HSM (hardware security module) security through Futurex’s robust, trusted offerings.
In his introductory overview, ATM Industry Association (ATMIA) executive committee member and Calleo managing director Andrew Dean highlighted the impact the COVID-19 crisis has had on ATM processors, with a significant drop in ATM usage. He said there was an urgent need for adaptability in the industry in response to the acceleration of digitisation in the payments arena. This includes increasing the range of ATM functionality, cloud migration, a reduction in costs through shared infrastructure and resources, and a drive to establish universal industry standards. With many banks consolidating branches and reducing their ATM footprint, Dean outlined ATMIA’s initiative to future-proof ATMs through the establishment of the Consortium for Next Gen ATMs.
The need for agility was echoed by Stanchion UK’s regional managing director, Norman Frankel, who outlined the new revenue drivers and trends that are driving changes in payments behaviour and how these could be optimised in the ATM industry. He emphasised the impact the generational shift has had on network levels, and the demand for a more personalised and instant payment experience, all accessible through mobile devices.
Digital wallets and SoftPOS
Frankel highlighted the recent surge in the use of digital wallets, and pointed out the opportunities this opened for the ATM industry in terms of cash out. Similarly, the trend of merchants using their phones to run their businesses – and the growth in demand for SoftPOS – could also be seen as an opportunity for the industry, again through earnings withdrawals from ATMs, and by using ATMs to advertise SoftPOS services.
In order to stay relevant and agile – particularly in the face of competition from Fintech and Big Tech – banks and financial services organisations need to continually innovate while at the same time reducing time to market for products and services, increasing efficiency and reducing costs. Paragon’s director of global product marketing, Steve Gilde, stressed that automation was key to doing this, particularly in the face of accelerating change. The first step is the virtualisation of the test environment, which is one of the areas that has shown the greatest demand over the past year due to COVID-19 lockdown restraints.
Virtualisation
Gilde outlined the cost-savings associated with the virtualisation of ATMs, along with the additional opportunities virtualisation unlocks, including automation. He noted the benefits of automating the test environment, including greater test coverage, an improvement in the quality of transactions, and reduced time to market for delivering new products and services.
He pointed out that automated testing also delivers a competitive advantage through verifiable and auditable test results, allowing staff to focus on high value tasks, and giving more opportunities for integrating the payment testing environment within the broader organisation. With organisations adapting post-pandemic to greater remote working environments, automated testing is generating significant interest for Paragon tools and services.
Stanchion’s group product director, Deon van Biljon, reiterated that anything that can be automated should be automated. Addressing skills augmentation and outlining Stanchion’s proactive outsourced monitoring of ATM driving switch environments, Van Biljon said that in order to optimise service delivery and control costs, organisations need to have the right people looking at the right problems at the right time. He emphasised that the need for specialists cannot be underestimated, particularly in the face of growing system complexity, and the constant need for monitoring, upgrades and maintenance, which has become a drain on operational teams.
Michael Hartman, director of global banking pre-sales at NCR, echoed many of the same points and addressed how NCR is adapting to help ATM providers with its more adaptable service-based business models and its Authentic payment switch, which enables greater omnichannel and digital management, increased functionality and supports virtualisation.
Security
As the world moves towards increased virtualisation of the payments environment with organisations going more omnichannel and having to handle the processing of a variety of devices, as well as taking on cloud services, the one thing that remains critically important is security. The need to ensure that these environments have strong cryptographic and encryption capabilities, such as those offered by Futurex, who has more than 40 years of experience in the field, and works with clients around the world.
Futurex general manager of EMEA, Roland Allen, focused on Futurex’s security offerings, specifically virtualised HSM solutions and PKI key management. Futurex’s enterprise-grade cloud payment HSM service, Futurex’s VirtuCrypt, is used to support a range of financial services critical to payment processing and acquiring, card and mobile issuance, and point-to-point encryption (P2PE). He pointed out that VirtuCrypt gives organisations the ability to create an end-to-end hardened security environment, supplementing existing on-premises HSMs, and with that in place they have the peace of mind that their core cryptographic infrastructure is secure, scalable, compliant, and highly available.
Focusing on ATM key management, Allen noted that all PIN pads on ATM devices require cryptographic keys for many purposes, and all of those need PIN encryption. Historically these keys were either manually loaded on the ATMs in person under dual control or managed through payment applications. If ATM operators transition to a dedicated cloud solution it removes many of the inefficiencies and costs associated with direct or host-driven ATM key management and eliminates dependence on payment applications to facilitate the process.
The bottom line, Allen pointed out, is that with extremely flexible environments and scalability organizations will have a much more agile solution with a better return on investment and a far better total cost of ownership. VirtuCrypt, he said, gives operators a complete single device ATM and POS remote key loading solution, that is certification compliant, integrates with all major manufacturers, supports all key types, is easily scalable, and utilises easy-to-use APIs that support automation. Its future-friendly design allows for guarding against any form of redundancy. Its key management solution also allows operators who are moving to the cloud to Bring Your Own Key, giving Futurex customers full control over their cryptographic keys, which are useable anywhere in the world.
In his closing remarks, Stanchion CEO, Steve Kirrage, said that many of the challenges the ATM industry is facing, has also created opportunities, as highlighted by the various speakers. For the industry to remain relevant, it must adapt and stay abreast of and anticipate trends, delivering solutions that match the way people – particularly the new generation – want to consume financial services.
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