SIX Payment Services (SIX), together with a number of partners, has been commissioned by the Swiss banks to develop a new multi-vendor software programme for the ATMs of the future. Following a successful pilot phase earlier this year, from 2018 onwards it is expected to be used in all ATMs across Switzerland.

Financial centres around the world are currently facing a dilemma that will not be easy to resolve: the much-talked-about digitalisation is now well established. New technologies and market participants are coming into the financial arena and working hard, often successfully, to take a piece of the pie. As a result, old business models are being replaced, with the value chain for established banks and financial services providers permanently changed. This presents two risks: the first, falling behind the competition and failing to be fast and modern enough to remain relevant; the second, taking on a pioneering role in terms of offers and technologies, but operating inefficiently.

Faced with these challenges, we have been strategically examining the possibility and feasibility of consolidating back-office functions into a central Swiss bank back office. The advantages and disadvantages of a central, consolidated back office could be discussed forever and there are many ways of bundling services. A trend towards increased outsourcing of services beyond a firm’s core business to experts continues unabated, with many banks choosing to outsource a part of their value chain.

This is where project ATMfutura comes in. Today, there are 26 individual solutions in use in the Swiss market, from four different manufacturers. Implementing a standard increases reliability and saves costs in a business area in which banks are unable to differentiate themselves. The focus for ATMfutura is on the elimination of inefficient parallel structures and standardisation.

SIX has taken the lead for the Swiss banking community and is working with all banks to consolidate the different ATM software systems into one system which runs on all current devices. Following a successful pilot, major Swiss bank UBS will soon join Credit Suisse in introducing the common software standard to its devices. Other banks are set to follow, creating the necessary conditions for the central management of ATMs in Switzerland.

The multivendor software is the first step in the ATMfutura project. The software runs on all Swiss ATMs, irrespective of their origin or manufacture, eliminating the need for banks to replace their ATMs. Looking forward, ATMfutura will also relieve the banks of the burden of monitoring and managing their ATM networks and fulfill the necessary conditions for taking over other elements in the value chain. This may include evaluating locations, installation, equipping or disposing of the ATMs. This package of standardisation volume bundling and process optimisation will save the banks money, whilst ensuring they keep up to date with the latest developments in ATM software.

With the switch to ATMfutura, new interbank solutions will be available across Switzerland. The standardisation of software means all users will experience the same interface and the same user guidance on all ATMs in Switzerland in the future - substantially simplifying their operations. New functions will be possible and enabled across the entire ATM network too. These include free selection of accounts when making cash withdrawals; the talking ATM, for the visually impaired; and offering a choice of bank note denominations to be dispensed.

Cash withdrawals and deposits at ATMs can also be carried out using a QR code, using a smartphone, for example. This function offers both customers and banks numerous benefits:
• The average duration of each ATM transaction is considerably reduced. Consequently, the amount of customers who can be serviced in a set time will increase, resulting in smaller queues at highly frequented locations.
• The generated QR code significantly increases the level of convenience for bank customers, as cash withdrawals can be prepared ahead of time through the mobile banking app and made quickly and easily at ATMs.
• The generated QR code can be forwarded to any smartphone, allowing the recipient to withdraw cash from any ATM.

We are also examining modular business process outsourcing solutions whereby services from various partners are bundled into an efficient package along the entire value chain. Possible services include support when evaluating locations and installation of devices, through to the full operation of hardware and software including general maintenance and cash re-stocking. In this way, banks are benefitting from significant cost savings, thanks to standardisation, volume bundling and process optimisation.

There is already huge demand for these central offerings and we expect this trend to continue with applications suitable to international financial centres. The low interest rate environment, low margins and increasing regulation is an opportunity, not just for the success of this project, but for the entire banking industry.