A guide from ATMmarketplace.

com

2010 ATM Software

Trends and Analysis

INSIDE: Our annual look at the current trends and future

expectations of ATM software.

Developed and published by: Sponsored by:

Contents

Page 3 About the sponsors

Page 4 Introduction | FIs seek multivendor software for cost efficiency

and channel integration
Cost control and efficiency

Page 7 Chapter 1 | ATM survey analysis: A general overview

Page 14 Chapter 2 | A regional focus: The Americas

Cost control and new functionality present competing
priorities in mature markets

Page 22 Chapter 3 | A regional focus: Europe, the Middle East and Africa
Fast-growing EMEA markets present challenges for FIs

Page 30 Chapter 4 | A regional focus: Asia-Pacific

Asia-Pacific leads in innovation

Page 38 Conclusion | Take back control of the ATM

© 2010 NetWorld Alliance LLC  |  Sponsored by KAL 2

About the sponsors

KAL, the world’s premier independent ATM software company, brings

together ultra-high quality and reliable software, unparalleled exper-
tise and experience combined with quality of support that is second to
none. And the result? ATM, kiosk and bank branch software solutions
that reduce operating costs and set the standard for next-generation
retail banking operation. Unparalleled functionality, flexibility, mis-
sion-critical robustness and the highest levels of security make KAL’s
advanced, multivendor ATM software systems unrivaled, worldwide.

ATM Marketplace, owned and operated by Louisville, Ky.-based

NetWorld Alliance, is the world’s largest online provider of information
about and for the ATM industry. The content, which is updated every
business day and read by business and industry professionals through-
out the world, is free.

Published by NetWorld Alliance LLC

© 2010 NetWorld Alliance
Written by Gary Wollenhaupt, contributor, ATMmarketplace.com.
Dick Good, CEO
Tom Harper, president
Andrew Davis, executive vice president
Joseph Grove, executive editor

© 2010 NetWorld Alliance LLC  |  Sponsored by KAL 3

 FIs seek multivendor software for cost efficiency
Introduction and channel integration

S
ince ATMmarketplace.com began
publishing “ATM Software Trends
and Analysis” in 2007, the view of
multivendor software within the industry
has changed. Aided in large part by the
migration of ATM software platforms to
Microsoft Windows, awareness and accep-
tance of platform-independent ATM soft-
ware has grown, as indicated in the survey
results shown in this guide.
Another indication is the Retail Banking
Research Ltd. “Multivendor Software 2010”
study that found approximately 450,000
ATMs globally run multivendor software,
a nearly 60 percent increase over the past
two years. According to the report, NCR is
the world’s largest supplier of ATM middle-
ware and applications.
A news release issued by NCR Corp. about
the RBR findings states that the majority
of financial institutions in North America
rely on NCR’s APTRA ATM software
suite, when compared with similar soft-
ware suites provided by NCR competitors
Diebold Inc. and Wincor Nixdorf AG.
NCR says RBR also found that NCR holds
the majority of the ATM market share in
Western Europe and Latin America.
The RBR study found that KAL is one of
the top three vendors in the multivendor
ATM software market, with 21 percent
of the ATM multivendor software share.
Outside of the top three companies, the
other companies listed in the research each
account for 7 percent or less of the total
market. KAL says it is the only company By Gary Wollenhaupt
among leading ATM software competi- Contributing writer,
ATMmarketplace.com
tors to focus solely on ATM software.
Regionally, the report found that Western
Europe, Asia-Pacific and North America
accounted for 80 percent of the multivendor
software installations, with Western Europe
having the largest number of ATMs by
region. Additionally, the number of ATMs
running multivendor software in Latin
America has doubled in the past two years.
It’s clear that financial institutions under-
stand the value of a hardware-independent
ATM software application, regardless of
whether it’s provided by an ATM manufac-
turer or an independent software vendor
such as KAL. Now, FIs are looking for
more than technological efficiency from
their ATM software and they want to
leverage their ATM networks for a much
greater competitive advantage.
“We’re seeing a more mature view of it,”
said Joe Gallagher, general manager of finan-
cial software solutions for NCR Corp. “It’s
moved beyond the question of whether
your application runs on other hardware.”
The spread of Windows has aided the
widespread use of XFS, a global software
standard that enables multivendor soft-
ware. Aravinda Korala, chief executive of-
ficer of KAL, compared XFS to the TCP/IP
protocol that makes the Internet possible.
Most current ATMs are XFS compatible.
Even FIs that don’t use multivendor soft-

Financial institutions understand the value of a hardware-independent ATM

software application, regardless of whether it’s provided by an ATM
manufacturer or an independent software vendor.

© 2010 NetWorld Alliance LLC  |  Sponsored by KAL 4

INTRODUCTION FIs seek multivendor software for cost efficiency and channel integration
ware specify that capability in the ATMs
they purchase.
“Even if the FI is not going to use multiven-
dor software immediately, they want their
ATMs to be XFS compliant for the future,”
Korala said.
Certainly, the repercussions of the finan-
cial crisis that swept the industry in 2009
still influence spending and marketing
decisions by FIs. In the United States, as
well as other countries, instability and
even failures among FIs has led to new
corporate entities that have resulted from
merged operations.
“However, the financial crisis doesn’t seem
to have slowed things down or stopped
people from doing the things they want to
do with ATM software,” Korala said. “Cost
reduction for the ATM network is even
more important than it ever was.”
These abrupt changes in the industry may
also negatively impact customer relation-
ships, making the ATM a vital service
delivery channel for FIs.
“The extent to which an FI can improve
the customer experience at the ATM, as
well as other delivery channels, helps build
better relationships,” said Robert Usner,
senior director of global markets strategy
and planning for Diebold. “That’s impor-
tant for most FIs because deposits are
increasingly important.”
Cost control and efficiency
FIs consider multivendor solutions for a
variety of reasons, but the most common
is to reduce cost and improve efficiency
for the ATM network. That’s especially
© 2010 NetWorld Alliance LLC  |  Sponsored by KAL
FIs consider multivendor solutions for a
variety of reasons, but the most common
is to reduce cost and improve efficiency
for the ATM network.
true if an FI operates ATMs from multiple
manufacturers.
If each type of machine operates proprie-
tary software, then software updates,
security upgrades and new features must
be managed for each variant of the soft-
ware. On the other hand, XFS-capable
machines running multivendor software
across all hardware types can be managed
with a single software application.
“In the past, you had different software for
different ATM types, and that was just un-
tenable for a big bank,” Korala said. “There
are so many things FIs need to do; they
want to be able to do it all just once.”
Managing a complex, perhaps international,
ATM network presents myriad challenges
for an FI. From a simple information tech-
nology perspective, the task is daunting
and expensive.
“Just by virtue of different geographies,
invariably there will be different hardware
vendors, but with a multivendor ATM ap-
plication they can reduce operational costs
and keep consistent consumer experience,”
said Gallagher.
Any way to reduce that complexity has a
guaranteed return on investment.
“Having a single application for ATMs
reduces effort internally within a bank from
a development, testing and certification
5
INTRODUCTION FIs seek multivendor software for cost efficiency and channel integration
process,” said Alan Walsh, executive vice
president of banking for Wincor Nixdorf.
“It also makes FIs more independent,
which means they can buy any vendor’s
hardware from a cost-control perspective.”
In just a few years, the multivendor con-
cept has transformed from a technology
solution to one that supports an FI’s overall
strategic approach. FIs look for software
that supports new functions at the ATM
and integrates with other channels such as
online and mobile banking.
A multivendor approach makes it easier to
integrate customer-facing enhancements
throughout a network.
“If an FI wants to do one-to-one marketing,
it becomes easier to embed that in a single
software application across different hard-
ware vendors,” Gallagher said. “They can
tie it into the branch system or online pres-
ence as well.”
For FIs faced with rising costs, increasingly
strict regulatory environments and on-
going security concerns, multivendor
software gives them the opportunity to
take back control of their ATM networks.
Multivendor software allows FIs to manage
the ATM network with fewer technology
resources than using proprietary software
for each ATM type.
© 2010 NetWorld Alliance LLC  |  Sponsored by KAL
A multivendor approach makes it easier to
integrate customer-facing enhancements
throughout a network.
“An FI can do what makes business sense
for them to do and not yield control to
vendors unless they choose to,” said Steve
Hensley, executive vice president of global
sales for KAL. “Banks can take control of
their networks and exercise as much con-
trol as they want.”
With greater control provided via multi-
vendor software, an FI can add transactions,
enhance functions and conduct marketing
campaigns much more efficiently.
“An FI can use the ATM channel as a
competitive edge, as opposed to it being
a commodity,” Hensley said.
For 2010, ATMmarketplace.com has once
again surveyed key individuals to update
the “ATM Software Trends and Analysis”
guide to highlight trends in major global
markets. The purpose of the guide is to
build a comprehensive, global view of
ATM software and the role it plays in the
financial services industry, assisting FIs in
developing their own software strategies.
6
Chapter 1 ATM survey analysis: A general overview

I
n 2010, ATMmarketplace.com repeated
its survey of global ATM executives to
learn about companies’ current soft-
ware functionality and future plans. These
respondents, representing some of the
world’s top financial institutions, shared
their thoughts and strategies for ATM soft-
ware. Given the situation in many of the
world’s financial markets, the responses
have been tempered by a difficult climate
and uncertainty about what might lie ahead.
This year’s survey repeated the questions
from 2009 regarding financial institutions’
understanding of multivendor ATM soft-
ware and motivations for software deci-
sions, as well as the ATM functions that
Total survey respondents
For 2010: 243 For 2009: 206
FIs would most like to see in future soft-
ware implementation. See where you stack
up in comparison — is your organization
taking full advantage of the possibilities of
multivendor ATM software?
We thank the industry leaders, literally
from around the globe, who shared their
insights via this survey. Here’s an overview
of their responses, as well as comparisons
with the 2009 survey, where data is avail-
able. Subsequent chapters will delve into
the responses on a regional basis.

1. Respondent breakdown by industry

2010 2009
ATM manufacturer/vendor 27% 34%

Financial institution — global top 100 by assets 15% 8%

Financial institution — other 24% 18%
ISO/IAD 9% 20%
Processor or EFT network 1% 7%
Other 15% 15%

2. Respondent breakdown by region Europe

23%
United States
The largest group represented comes from and Canada
North America, which perhaps is fitting 36%
due to the ubiquity of the ATM in the
United States and Canada. Other larger
markets are well represented and Australia Asia
19%
has a presence, too.
Australia
2%
Latin America Middle East/Africa
8% 12%

© 2010 NetWorld Alliance LLC  |  Sponsored by KAL 7

CHAPTER 1 ATM survey analysis: A general overview

3. Respondent breakdown by job responsibility

2010 2009
Executive/management 32% 39%

Finance or procurement 1% 2%
IT 23% 18%
Operations 9% 21%
Sales/marketing 24% 18%
Other 11% 13%

The survey respondents included a mix of executives from FIs, independent sales organi-
zations and independent ATM deployers, transaction processors, electronic-fund-transfer
networks, ATM manufacturers and ATM vendors.

4. What percentage of your organization’s ATMs or your customers’ ATMs run on

Microsoft Windows today?

2010 2009
100% 36% 33%

50% - 99% 37% 34%

Less than 50% 4% 18%
Don’t know 3% 7%
Not applicable 10% 10%

The number of respondents running at least half of their ATMs on Microsoft Windows
grew from about 67 percent last year to nearly 73 percent for 2010. Although other plat-
forms such as Linux and IBM’s legacy OS/2 survive on the fringe, none of them will be
able to make much headway against the Microsoft product. Those who choose to forsake
Windows face an uphill battle for hardware and software support from the ATM manufac-
turers.

© 2010 NetWorld Alliance LLC  |  Sponsored by KAL 8

CHAPTER 1 ATM survey analysis: A general overview

5. Are there plans to replace your organization’s current ATM software or your
customers’ current ATM software?

2010 2009
Yes, planned and budgeted for this year 17% 19%

Yes, planning for next year or the following year 26% 20%
No, we recently replaced it 11% 9%
No, there are no plans to replace the existing ATM software 27% 33%
Not applicable 19% 18%

About 3 percent more respondents plan to replace their software within the next three
years than planned to do so in last year’s survey. In last year’s responses, 20 percent
planned for the next year or the following year, compared with 26 percent with similar
plans from the 2010 survey. That response reflects both the desire to take advantage of
multivendor software and uncertainty on spending due to the economy.

6. Which statement best identifies your organization’s multivendor ATM strategy, or

the multivendor ATM strategy of your customers?

2010 2009
ATMs from multiple vendors, single software application on all 29.1% 24%

ATMs from multiple vendors, considering multivendor software

33.6% 30%
in the future
ATMs from a single vendor, understand the benefits of multivendor
11.7% 10%
ATM software
ATMs from a single vendor, see no need for multivendor ATM software 8.1% 9%
Not a consideration 14.2% 19%
Not sure what this means 3.2% 8%

The number of respondents running multivendor software on ATMs from multiple

vendors grew from 24 percent to nearly 30 percent, an indication that more institutions
seek the cost-saving and marketing benefits of multivendor applications. The number of
respondents considering multivendor software also grew, reflecting the desire to holisti-
cally operate multivendor networks. These increases are fueled by a growing awareness
of the multivendor concept, as seen in the significant drop in the number of respondents
who did not understand the concept.

© 2010 NetWorld Alliance LLC  |  Sponsored by KAL 9

CHAPTER 1 ATM survey analysis: A general overview

Even institutions with ATMs from a single vendor increasingly understand that they can
use multivendor software to add new functionality and upgrade security across a network
composed of hardware models from one manufacturer that may vary in age. Addition-
ally, having multivendor software reduces the cost of purchasing new ATMs and reduces
the cost of maintaining them since the FI is free to buy from any provider, thereby putting
significant pricing pressure on the vendors.

7. What is the primary driver (or drivers) for changing ATM software?

2010 2009
Increased security (such as EMV, 3DES, remote key, biometrics) 57% 51%

Increased productivity and efficiency 50% N/A

Added functionality (such as new transactions) 49% 49%

Cost reduction of the ATM network 49% 35%
Providing an enhanced user experience
44% 45%
(such as transaction personalization)
Support for new technology 41% 47%
Ease of changing software when needed 26% 28%
Need for better customer relationships 26% N/A
Improved ATM reliability 26% 37%
Improved support 22% 28%
None of the above 7% 13%

Increased security once again tops the list of reasons for FIs to change their ATM soft-
ware. Increasing sophistication on the part of criminals and increasing pressure from
regulators combine to make security a top priority for any entity involved in financial
services. FIs are looking for software that supports the latest in security enhancements,
such as EMV, Triple DES (Data Encryption Standard), remote key loading, biometrics and
other features. Close behind are support for other new technologies and cost reduction in
operating the ATM network. FIs also value the benefits from multivendor software that
allow them to operate more efficiently and offer more to their customer base.

© 2010 NetWorld Alliance LLC  |  Sponsored by KAL 10

CHAPTER 1 ATM survey analysis: A general overview

8. Select the three most desired new features of ATM software.

(Percent who included the below among their top three)

2010 2009
Remote monitoring of the ATM network 49% 45%

Multivendor ATM software 31% 22%

Cash management and forecasting 28% 22%
Envelope-free check deposit 25% 24%
One-to-one marketing/purchase gift cards 24% 26%
Customer preferences 23% 26%
Bulk-note cash deposit 22% 23%
Software distribution 22% 28%
Support for cash recycling 21% 21%
Automated test tools 15% 18%
Support for biometrics 13% 13%
Other 6% 7%

Again this year, remote monitoring tops the list as the most desired feature for ATM
software. A strong second is the multivendor application, gaining ground in desirability as
seen by respondents. Following those come a variety of features that FIs deem key to cost
savings and customer retention, such as envelope-free check deposits, cash management
and forecasting, one-to-one marketing and the ability to set customer preferences. Other
desired features reflect ways to cut costs and add functionality, such as bulk-note cash
deposit, cash recycling, software distribution and automated test tools.

© 2010 NetWorld Alliance LLC  |  Sponsored by KAL 11

CHAPTER 1 ATM survey analysis: A general overview

9. What is the most critical change your organization or your customers’ organization
needs to make to its ATM network in 2010?

2010 2009
Reduce operational costs 31% 38%
Create a better ATM customer experience 18% N/A
Improve the ability to remotely manage the ATM network 16% 19%
Adopt enhanced security technologies 13% 11%
Improve customer functionality 13% 20%
Improve the User Interface 3% 4%
No changes needed 5% 8%

Although the economic pressures on FIs have not subsided, the focus has shifted some-
what to customer-facing enhancements. Retaining existing customer relationships and
building deposits become higher priorities. Security remains a priority of many, as does
creating a better ATM customer experience. Even the small number of respondents who
thought no changes were needed has lowered. FI executives seemingly understand how
vital customer and member relations are when it comes to retention. Customers have
many choices — in many cases the relationship comes down to the experience the cus-
tomer has in transacting business.

10. Given customers have increasingly fewer reasons to visit bank branches, how
important a delivery channel do you see your ATM network as a customer touch-
point that allows you to compete effectively with other banks?

In a new question for 2010, these Becoming

answers reflect the ongoing Very important more important
54.7% 25.9%
importance of ATMs to an FI’s
customer interactions. For many
customers, it may be the most common Becoming
interaction with an institution. less important
2.4%

The responses to this question varied by Not important at all

1.6%
region. For the United States and Canada,
Same as before
48 percent thought the ATM was the most Not applicable 8.1%
important customer touchpoint. In con- 7.3%
trast, 70 percent of the respondents from
Middle East/Africa indicated the ATM percent; Latin America, 53 percent; and
was most important. For Asia, it was 63 Europe, 50 percent.

© 2010 NetWorld Alliance LLC  |  Sponsored by KAL 12

CHAPTER 1 ATM survey analysis: A general overview

11. Rate the following bank service delivery channels in order of importance as a
customer touchpoint.

Most Important 33% While the largest number of

2nd Most Important 43% respondents viewed the ATM
3rd Most Important
as the second-most important
ATM 16%
customer touchpoint, it ranked
4th Most Important 7%
a close second overall after
5th Most Important 2%
the branch as the most impor-
tant. The mobile phone space
0 10 20 30 40 50 60 70
was solidly ranked as the least
important. The branch is still
Most Important 40% clearly the top touchpoint,
2nd Most Important 18% despite advances in customer-
Branch 3rd Most Important 14% facing technologies.
4th Most Important 14%
5th Most Important 14%

0 10 20 30 40 50 60 70

Most Important 3%
2nd Most Important 10%
Call center 3rd Most Important 25%
4th Most Important 36%
5th Most Important 26%

0 10 20 30 40 50 60 70

Most Important 19%

2nd Most Important 23%
Internet 3rd Most Important 34%
4th Most Important 20%
5th Most Important 3%

0 10 20 30 40 50 60 70

Most Important 4%
2nd Most Important 7%
Mobile phone 3rd Most Important 11%
4th Most Important 24%
5th Most Important 55%

0 10 20 30 40 50 60 70

© 2010 NetWorld Alliance LLC  |  Sponsored by KAL 13

Chapter 2 A regional focus: The Americas

Total survey respondents from the Americas:

For 2010: 109 | For 2009: 94
Includes North America, Mexico, Latin America, South America and the Caribbean

12. What percentage of your organization’s ATMs or your customers’ ATMs run Mi-
crosoft Windows today?

2010 2009
100% 24% 20%

50% - 99% 39% 32%

Less than 50% 22% 31%
Don’t know 5% 6%
Not applicable 10% 11%

Microsoft Windows continues to be the dominant player in the Americas. It’s especially
strong in South America, where ATMs are a more recent market development and where
there are fewer older machines with other OSs than there are in North America. Those FIs
using other operating systems face ongoing compatibility problems with the demands of
the most current software and security safeguards.

13. Are there plans to replace your organization’s current ATM software or your

customers’ current ATM software?

2010 2009
Yes, planned and budgeted for this year 16% 15%

Yes, planning for next year or the following year 20% 21%
No, we recently replaced it 6% 11%
No, there are no plans to replace the existing ATM software 30% 30%
Not applicable 19% 23%

Almost a third of the respondents don’t plan to replace existing software, perhaps a reflec-
tion of the newer-vintage machines deployed in South America. Those planning to replace
software this year, next year or the following year are about the same, 36 percent for 2010
and 2009. Due to ongoing financial pressures, FIs still see a strong business case for chang-
ing their software to improve efficiency.

© 2010 NetWorld Alliance LLC  |  Sponsored by KAL 14

CHAPTER 2 A regional focus: The Americas

14. What is the primary driver (or drivers) for changing ATM software?

2010 2009
Increased security (such as EMV, 3DES, remote key, biometrics) 51% 39%
Added functionality (such as new transactions) 44% 46%
Increase in productivity and efficiency 44% N/A
Providing an enhanced user experience
44% 37%
(such as transaction personalization)
Cost reduction of the ATM network 37% 29%
Support for new technology 37% 47%
Ease of changing software when needed 26% 30%
Need for better customer relationships 19% N/A
Improved ATM reliability 18% 31%
Improved support 17% 24%
None of the above 12% 16%

Increased security and increased efficiency tallied as two of the highest priorities for
respondents. Interestingly, support for new technology fell as a primary driver, as cost
reductions gain importance for FIs’ survival. However, customer-facing enhancements,
such as added functionality for new transactions, indicate an awareness of the importance
of the ATM in an FI’s marketing strategy.

15. Which statement best identifies your organization’s multivendor ATM strategy, or
the multivendor ATM strategy of your customers?

2010 2009
ATMs from multiple vendors, single software application on all 24% 19%
ATMs from multiple vendors, considering multivendor software
32% 34%
in the future
ATMs from a single vendor, understand the benefits of multivendor
15% 10%
ATM software
ATMs from a single vendor, see no need for multivendor ATM software 10% 9%
Not a consideration 15% 21%
Not sure what this means 4% 7%

More than half the respondents said they operated ATMs from multiple vendors in their fleet,
but only about a quarter take advantage of the benefits of multivendor software. Awareness
levels of the benefits of multivendor ATM software seem to be rising, as the percentage of
respondents who understand the benefits but don’t use it rose from 10 percent to 15 percent.

© 2010 NetWorld Alliance LLC  |  Sponsored by KAL 15

CHAPTER 2 A regional focus: The Americas

16. Select the three most desired new features of ATM software.
(Percent who included the below among their top three)

2010 2009
Remote monitoring of the ATM network 46% 43%

Envelope-free check deposit 41% 33%

Customer preferences 25% 34%
One-to-one marketing / purchase gift cards 25% 24%
Bulk-note cash deposit 24% 2%
Multivendor ATM software 24% 22%
Software distribution 24% 24%
Cash management and forecasting 21% 21%
Support for cash recycling 21% 12%
Automated test tools 13% 18%
Support for biometrics 7% 7%
Other 6% 7%

Remote management of ATM software again tops the list of most desired new features
for the Americas region. That reflects the efficiency gains that come with remote man-
agement, underscoring the cost-cutting value of robust multivendor software. Interest in
envelope-free check deposit has grown, based on the promise of the Check 21 legislation
in the United States that allows for non-envelope-based check deposits. Other areas of
the region are less reliant on checks, so that feature may be less of a priority. Several other
features hold a roughly similar level of attraction, including support for cash recycling,
bulk-note cash deposit, one-to-one marketing and software distribution.

© 2010 NetWorld Alliance LLC  |  Sponsored by KAL 16

CHAPTER 2 A regional focus: The Americas

17. What is the most critical change your organization or your customers’ organization
needs to make to its ATM network in 2010?

2010 2009
Reduce operational costs 36% 44%

Create a better ATM customer experience 22% N/A

Improve the ability to remotely manage the ATM network 16% 16%
Improve customer functionality 14% 17%
Adopt enhanced security technologies 10% 6%
Improve the user interface 4% 4%
No changes needed 9% 13%

The trend toward efficiency continues here, with operational cost reductions a high prior-
ity for ATM networks. Of course, security continues to be a concern. Better use of the
ATM as a customer touchpoint is seen as a critical change as well.

18. Given customers have increasingly fewer reasons to visit bank branches, how im-
portant a delivery channel do you see your ATM network as a customer touchpoint
that allows you to compete effectively with other banks?

Becoming For respondents in the

Very important more important
50% 30% Americas, the ATM is
considered an increasingly
important critical delivery
channel as self-service
becomes a larger part of
daily life.
Becoming less important
2%
Not applicable Not important at all
12% Same as before 2%
4%

© 2010 NetWorld Alliance LLC  |  Sponsored by KAL 17

CHAPTER 2 A regional focus: The Americas

19. Rate the following bank service delivery channels in order of importance as a
customer touchpoint.

The traditional bank branch

Most Important 29%
still reigns supreme as the
2nd Most Important 42% most important service de-
ATM 3rd Most Important 21% livery channel in the Ameri-
4th Most Important 7% cas, but the ATM is strongly
5th Most Important 1% considered the second-most
important means of customer
0 10 20 30 40 50 60 70 interaction.

Most Important 45%

2nd Most Important 15%
Branch 3rd Most Important 13%
4th Most Important 16%
5th Most Important 11%

0 10 20 30 40 50 60 70

Most Important 0%
2nd Most Important 13%
Call center 3rd Most Important 22%
4th Most Important 39%
5th Most Important 30%

0 10 20 30 40 50 60 70

Most Important 25%

2nd Most Important 21%
Internet 3rd Most Important 38%
4th Most Important 17%
5th Most Important 0%

0 10 20 30 40 50 60 70

Most Important 2%
2nd Most Important 10%
Mobile phone 3rd Most Important 10%
4th Most Important 21%
5th Most Important 58%

0 10 20 30 40 50 60 70

© 2010 NetWorld Alliance LLC  |  Sponsored by KAL 18

CHAPTER 2 A regional focus: The Americas
Cost control and new functionality
present competing priorities in
mature markets
In mature markets, the desire to lower ATM
operating costs competes with the desire
for new functionality. Throughout the
region, FIs seek ATM software that allows
them to pursue both objectives.
For many FIs, lower costs result from the
flexibility that comes with the ability to
separate software from the purchase of
ATM hardware and service. FIs can shop
for the best price and service for each com-
ponent, or sign up with an independent
vendor to service some or all aspects of the
operation.
Some FIs are seeking greater control over
their ATM operations to reduce operating
costs.
“We do not have full control over function-
ality now, but would like to have it in the
future,” said Pam Hasara, vice president and
ATM relationship and product manager for
BankAtlantic (US $6 billion).
The Fort Lauderdale, Fla.-based institution
has struggled with the cost of managing its
fleet of 305 ATMs, which includes 136 on
cruise ships.
“We have put a lot of controls into our
current ATM operation and have reduced
locations because of the cost of equipment
and servicing involved,” Hasara said.
Remote monitoring capability is one soft-
ware feature that FIs rely on for cost savings.
With a multivendor installation, all ATMs
in a network can utilize the same feature
set to save money from more efficient
© 2010 NetWorld Alliance LLC  |  Sponsored by KAL
management. Before remote management,
service calls might be hit or miss. A techni-
cian wouldn’t necessarily know why a unit
was out of service, and what parts might be
needed to return it to service.
“With a state-of-the-art ATM remote
monitoring and management system, an FI
can minimize the number of times some-
one has to go out and physically touch
the machine,” said KAL’s Hensley. “When
a technician is dispatched, an FI can be
sure they have the right components and
materials to fix the problem they’re going
to encounter at the ATM.”
Lower costs result from the flexibility that comes
with the ability to separate software from the
purchase of ATM hardware and service.
ATM software can even take care of itself,
in many cases eliminating the need for a
service call.
“The ATM software can be self-diagnos-
ing, detecting if there are things wrong
with the ATM and sending detailed status
information to the monitoring system,”
Hensley said. “With the right software
tools, FIs can have better control over fix-
ing their ATMs so availability goes up and
costs go down.”
Multivendor software can enable a host of
new features, such as customer relation-
ship marketing and automated deposits,
that FIs value.
Long on the horizon, no-envelope cash
and check deposit transactions at the
ATM may finally be gaining traction as a
sought-after feature that’s supported by
19
CHAPTER 2 A regional focus: The Americas
many multivendor software solutions for
the ATM. In the United States, the move to
automated deposits has been driven by the
Check Clearing for the 21st Century Act,
or Check 21, a law that’s been on the books
since 2004. The act allows check truncation
and processing of electronic check images.
“Envelope-free deposits are gaining popu-
larity and it won’t be long before consumers
embrace this convenient feature as well
as others such as advanced check cashing
functionality,” said KAL’s Korala.
However, in regions where checks make
up a smaller portion of the transaction
volume, check imaging is less of a priority.
“Outside the United States it’s not such a
big deal,” Korala said.
BankAtlantic is one FI weighing the busi-
ness case for adding this function.
“We are reviewing no-envelope deposit
strategies at this time,” Hasara said. “The
cost of upgrading the ATMs to bulk deposit
is a major concern.”
The software and hardware infrastructure
deposits also could be used for other appli-
cations such as bill payments. But in the
United States, there are some barriers.
“In the United States, there’s no standard
for the bills, which makes it difficult for
self-service channels to recognize the bill
and pay it,” said Wincor’s Walsh. In Europe,
on the other hand, billing statements tend
to be standardized, making self-service a
more viable option at this point.
One trend that’s on the horizon is the inte-
gration of ATM and mobile channels. One
concept is to view the mobile platform as
© 2010 NetWorld Alliance LLC  |  Sponsored by KAL
FIs can leverage the power of mobile and ATM
channels through cross-promotion enabled by
software integration.
another form of the card through near-field
communication, or short-range radio waves,
essentially.
Even before NFC becomes widespread, FIs
can leverage the power of mobile and ATM
channels through cross-promotion enabled
by software integration. Take mobile bank-
ing, widely available on smartphones. The
most common way for consumers in the
United States to sign up for mobile banking
is via the online channel.
But FIs don’t fully promote the mobile
channel through their online presence.
However, about 70 percent of FI customers
use an ATM, creating a perfect opportu-
nity to sign up costumers for the mobile
channel.
Security continues to be a high priority for
FIs. Compliance with the PCI Data Securi-
ty Standard as well as developing technolo-
gies such as EMV and remote key loading
are important aspects of ATM software.
Fighting fraudsters remains a concern for
FIs, from both the hardware and software
aspects. BankAtlantic, like FIs everywhere,
faces security challenges.
“Skimming is our biggest issue, but we are
also concerned with software hacking,”
Hasara said.
Markets outside the United States have
adopted chip-and-pin technology, also
known as EMV (Europay, MasterCard
and Visa standard). As its neighbors to the
20
CHAPTER 2 A regional focus: The Americas

north and south of the United States adopt

EMV chip, the security gap may be too
much for American regulators to ignore.
Multivendor software enables enterprise-
wide delivery of software updates and
upgrades to improve compliance and cut
operating costs.

“With different security requirements

in different regions around the world, a
global software provider like KAL has to
be proactive and know the requirements
and regulations in the different regions and
provide comprehensive support for them,”
Hensley said.

© 2010 NetWorld Alliance LLC  |  Sponsored by KAL 21

Chapter 3 A regional focus: Europe, the Middle East and Africa

Total survey respondents from Europe, the Middle East and Africa (EMEA):
For 2010: 87 | For 2009: 42

20. What percentage of your organization’s ATMs or your customers’ ATMs run Mi-
crosoft Windows today?

2010 2009
100% 51% 55%

50% - 99% 32% 14%

Less than 50% 3% 7%
Don’t know 3% 12%
Not applicable 11% 12%

In this region, as well as the others, Microsoft Windows reigns. In the developing coun-
tries of EMEA, first-generation ATM deployments are based on the Microsoft OS, leap-
frogging other options that were previously popular in other regions.

21. Are there plans to replace your organization’s current ATM software or your
customers’ current ATM software?

2010 2009
Yes, planned and budgeted for this year 18% 31%

Yes, planning for next year or the following year 21% 17%
No, we recently replaced it 20% 7%
No, there are no plans to replace the existing ATM software 22% 29%
Not applicable 20% 17%

One-fifth of the 2010 respondents replaced their software, a reflection of the higher num-
ber of respondents with plans for replacements in the 2009 survey. The number of respon-
dents with no plans to replace it fell compared to the previous year.

© 2010 NetWorld Alliance LLC  |  Sponsored by KAL 22

CHAPTER 3 A regional focus: Europe, the Middle East and Africa

22. Which statement best identifies your organization’s multivendor ATM strategy, or
the multivendor ATM strategy of your customers?

2010 2009
ATMs from multiple vendors, running a single software application on all 39% 36%

ATMs from multiple vendors, considering multivendor software in

29% 14%
the future
ATMs from a single vendor, understand the benefits of multivendor ATM
9% 12%
software
ATMs from a single vendor, see no need for multivendor ATM software 10% 10%
Not a consideration 13% 19%
Not sure what this means 5% 10%

About two-thirds of the EMEA respondents operate multivendor software or are consid-
ering it, while another 9 percent understand the benefits. Clearly, the value of multivendor
software is well known in the region.

23. What is the primary driver (or drivers) for changing ATM software?

2010 2009
Increased security (such as EMV, 3DES, remote key, biometrics) 60% 57%

Cost reduction of the ATM network 59% 42%

Added functionality (such as new transactions) 57% 21%
An increase in productivity and efficiency 53% N/A
Support for new technology 45% 31%
Providing an enhanced user experience (such as transaction personalization) 41% 38%
Improved support 38% 52%
Need for better customer relationships 32% N/A
Improved ATM reliability 29% 37%
Ease of changing software when needed 25% 10%
None of the above 1% 0

EMEA respondents’ interest in security, highest among the regions, is no surprise in an

area home to many emerging economies susceptible to criminal activity. Cost reduction
also is a high priority, particularly in the more mature European markets.

© 2010 NetWorld Alliance LLC  |  Sponsored by KAL 23

CHAPTER 3 A regional focus: Europe, the Middle East and Africa

24. Select the three most desired new features of ATM software.
(Percent who included the below among their top three)

2010 2009
Remote monitoring of the ATM network 47% 40%
Multivendor ATM software 36% 19%
Cash management and forecasting 34% 21%
One-to-one marketing / purchase gift cards 25% 21%
Support for cash recycling 25% 33%
Bulk-note cash deposit 23% 29%
Customer preferences 18% N/A
Software distribution 18% 26%
Support for biometrics 18% 12%
Automated test tools 16% 19%
Envelope-free check deposit 9% 10%
Other 6% 7%

Interest in advanced features remains high in EMEA, with respondents desiring things like cash
recycling and automated bulk-note cash deposits, especially important in economies fueled by
cash rather than checks or electronic transfers. In developing nations, the ATM functions as a
mini-branch, handling a myriad of transactions. Even with an emphasis on customer-facing
interactions, remote monitoring remains the most desired new feature in ATM software.

25. What is the most critical change your organization or your customer’s organization
needs to make to its ATM network in 2010?

2010 2009
Reduce operational costs 36% 33%
Adopt enhanced security technologies 17% 14%
Improve the ability to remotely manage the ATM network 16% 19%
Create a better ATM customer experience 14% N/A
Improve customer functionality 10% 29%
Improve the user interface 2% 2%
No changes needed 5% 2%

Cost reduction remains the top priority for FIs in the EMEA region. However, security,
remote management and creating a better customer experience are also highly valued.

© 2010 NetWorld Alliance LLC  |  Sponsored by KAL 24

CHAPTER 3 A regional focus: Europe, the Middle East and Africa

26. Given customers have increasingly fewer reasons to visit bank branches, how im-
portant a delivery channel do you see your ATM network as a customer touchpoint
that allows you to compete effectively with other banks?

FIs in the region will continue Becoming

Very important more important
to rely on ATMs as a customer 20%
56%
touchpoint, in some cases
perhaps the only interaction Becoming
consumers may have with their less important
3%
bank.
Not important at all
2%
Same as before
Not applicable 14%
5%

27. Rate the following bank service delivery channels in order of importance as a
customer touchpoint.

Most Important 32%

2nd Most Important 44%
ATM 3rd Most Important 14%
4th Most Important 8%
5th Most Important 2%

0 10 20 30 40 50 60 70

Most Important 39%

2nd Most Important 21%
Branch 3rd Most Important 16%
4th Most Important 11%
5th Most Important 13%

0 10 20 30 40 50 60 70

© 2010 NetWorld Alliance LLC  |  Sponsored by KAL 25

CHAPTER 3 A regional focus: Europe, the Middle East and Africa

Most Important 3%
2nd Most Important 9%
Call center 3rd Most Important 25%
4th Most Important 34%
5th Most Important 26%

0 10 20 30 40 50 60 70

Most Important 18%

2nd Most Important 24%
Internet 3rd Most Important 32%
4th Most Important 22%
5th Most Important 5%

0 10 20 30 40 50 60 70

Most Important 7%
2nd Most Important 2%
Mobile phone 3rd Most Important 13%
4th Most Important 25%
5th Most Important 53%

0 10 20 30 40 50 60 70

ATMs take on a higher importance in the EMEA as a close second in the most important
category than they do in the Americas. Clearly, the mobile channel remains one that is
more promise than reality for the EMEA, as well as the Americas. Call centers have less
relevance in markets where the customer base has embraced online and mobile phone
interaction.

© 2010 NetWorld Alliance LLC  |  Sponsored by KAL 26

CHAPTER 3 A regional focus: Europe, the Middle East and Africa
Fast-growing EMEA markets
present challenges for FIs
FIs in the emerging nations of Europe, the
Middle East and Africa can take advantage
of the latest features enabled through their
ATM software. Those FIs in the arguably
more mature markets in this region benefit
from the efficiency gains from multivendor
software.
As FIs seek software to support their stra-
tegic efficiency and marketing programs,
there are some regional differences in their
approaches. Desired features and functions
vary with the markets around the world, as
does the approach to software development.
For example, cash recycling and deposit auto-
mation are very important in the Chinese
market, whereas the ability to deposit
checks and cash without an envelope is
important in the United States. The soft-
ware and services an FI will deploy have to
correspond with those capabilities that are
going forward in those markets.
Fueled in part by higher real estate prices
that make branches prohibitively expensive,
European FIs rely on ATMs to provide more
functionality than their North American
counterparts. For instance, consumers in
the Netherlands and other nations routinely
pay bills at the ATM, while in Spain foot-
ball tickets are a big self-service business.
In the U.K., ATMs function essentially
as mini branches, offering bill payments,
statement printing and automated cash
and check deposit.
Even in technologically advanced markets,
cash is still king. A Bank of England study
found that ATM withdrawals account for
about 70 percent of cash acquisition in
© 2010 NetWorld Alliance LLC  |  Sponsored by KAL
Integration of the ATM with other channels remains
vital for FIs that rely on a traditional branch
presence as well as the technology-based
customer interactions.
2009, compared to 25 percent in the 1990s,
although the overall number of cash retail
transactions has dropped. In times of eco-
nomic turmoil, the public still trusts cash,
and its movement is vital to the economy.
Integration of the ATM with other chan-
nels remains vital for FIs that rely on a
traditional branch presence as well as the
technology-based customer interactions.
For instance, RBR reports that 10 percent
of European ATMs accept automated de-
posits, maintaining customer relationships
at a lower cost.
Multivendor software efficiently enables
the flexibility necessary to meet these chal-
lenges.
“With real estate challenges, banks in
Europe have to maintain customer satis-
faction, and the best way to do that is to
offer alternative channels,” said Walsh,
who worked for Wincor Nixdorf in Ireland
before transferring to the United States.
“Financial institutions are trying to reduce
costs and offer consistent customer experi-
ence, and the best way to do that is to have
one application across all channels.”
FIs understand the need to build a seam-
less customer experience.
“We want to integrate the ATM channel
with the other ones in the organization,
such as electronic banking, branch, mo-
bile and so on,” said Miguel Angel Cámara
27
CHAPTER 3 A regional focus: Europe, the Middle East and Africa
López, project manager of self-service for
CECA, the Spanish Confederation of Savings
Banks, which operates 3,500 ATMs. “The
client must feel the organization the same
way, regardless of the channel he or she
chooses.”
To maintain channel integrity and provide
a seamless, yet efficient, customer experi-
ence, the ATM is a prime opportunity. At
la Caixa (EUR 243,517 million) the leading
savings bank in Europe and the third-larg-
est financial entity in Spain, the ATM is a
way to reduce operating costs and improve
the customer experience.
“The ATM is strategic for us in order to re-
duce branch repetitive and time-consuming
transactions and let our employees spend
their time in commercial tasks,” said Pere
Ràfols, ATM and ticketing IT manager for
la Caixa.
Instead of expanding branches and ATM
locations, the Spanish bank expects to cut
costs and retain customers with additional
functions. Its customers enjoy nearly 200
functions at la Caixa’s ATM network of
nearly 8,000 ATMs, which is larger than its
competitors.
“We expect to add more functionality
if necessary to reduce low value-added
transactions in our branches and do them
through our ATMs,” Ràfols said.
Emerging economies of the Middle East
and Africa basically skipped the check
phase of financial instruments, instead
relying on cash and stored-value cards, as
well as mobile banking.
An executive at a bank in Kenya, who
wished to remain anonymous, noted that
© 2010 NetWorld Alliance LLC  |  Sponsored by KAL
“The ATM is strategic for us in order to reduce
branch repetitive and time-consuming
transactions and let our employees spend
their time in commercial tasks.”
— Pere Ràfols, ATM and ticketing IT manager, la Caixa
his institution is adding services to its
ATM fleet. These include utility payments,
check deposits, money transfers and mobile
phone top-ups.
As ATMmarketplace.com reported previ-
ously, Diebold formed a direct sales opera-
tion in Turkey to service customers in the
region.
“The ATM market in Turkey is one of the
fastest-growing in the EMEA region,” said
Danilo Rivalta, vice president and general
manager of Diebold Europe, Middle East
and Africa (EMEA) in late 2009. “This
market has increased by 20 percent during
the last year and is expected to grow at the
same level during the coming year.”
Standard Bank of South Africa, through its
Ugandan subsidiary Stanbic Bank Uganda,
in conjunction with MTN, brought its
mobile payments application to Uganda in
early 2009. Called MTN Mobile Money, the
Uganda service builds on Standard Bank’s
previous launch in South Africa. Users
registering for the product will be able to
send and receive funds using their mobile
handsets. Additional banking functionality
would be added onto the application after
further development and testing.
When launching the service in South Africa,
Irene Charnley, commercial director of the
MTN Group, a Standard Bank subsidiary,
28
CHAPTER 3 A regional focus: Europe, the Middle East and Africa
noted that MTN Banking’s mobile product
leveraged cellular telephone technology
and financial services expertise for the
benefit of clients.
“It is a unique offering that creates 24/7
banking for the mobile generation,” she said.
The South African mobile products are
linked to a cash card that can be upgraded
to a MasterCard. The MasterCard enables
purchasing from merchants who accept
the card, and opens up ATM access to
Saswitch ATMs and the Standard Bank
network. There are no monthly fees and no
minimum balances.
The product enables person-to-person pay-
ments and transfers to other bank accounts
and credit cards and bill payments. Clients
can even pay traffic fines by phone or load
their electricity accounts with prepaid credits.
“This convenient retail environment
revolutionizes financial sector marketing
and distribution channels while massively
simplifying service access,” Charnley said.
ATM usage in the Middle East is expected
to surge in the coming years. A report
from Retail Banking Research Ltd. estimat-
ed that the number of ATMs in the Middle
East will reach 70,000 by 2013.
That growth is fueled in large part by
recent developments of financial instru-
ments that conform to Shari’ah, or Islamic
law. MasterCard Worldwide, along with
EonCap Islamic Bank, launched an Islamic
debit MasterCard. It’s a debit card with
ATM functions that also incorporates the
PayPass system of noncontact payments.
© 2010 NetWorld Alliance LLC  |  Sponsored by KAL
“It’s designed to appeal to both Muslim and
non-Muslim individuals who prefer better
financial control as the card ensures that
purchases are automatically deducted from
the cardholder’s account and approved only
if enough funds exist within the account,”
said Fozia Amanulla, chief executive officer
of Eoncap Islamic Bank. “It’s accepted
worldwide at more than 26 million loca-
tions and can be used at an ATM for
e-banking.”
In Bahrain, Al Salam Bank launched a
Shari’ah-compliant credit card that also
gives holders access to 30 million ATMs
and retail shops worldwide. The smart card
also incorporates a dynamic mechanism
for personal data verification in addition to
ease of use at all points of sale.
That level of security is vital to consumer
confidence around the world, but especially
in emerging markets where there may be less
faith in institutions than in more mature
economies.
“Ensuring a secure environment for ATM
users is all the more important for emerging
markets such as the Middle East, since the
extent of market growth is closely linked to
the level of transaction security offered to
customers,” said Dave Wetzel, vice presi-
dent and managing director for Europe,
the Middle East and Africa of Diebold, at
the Middle East ATMs 2010 conference.
FIs fear physical attacks such as skimming,
as well as sophisticated software hacks.
“We guard against all of them but now our
main focus is software hacking and sensi-
ble data encryption,” said la Caixa’s Ràfols.
29
Chapter 4 A regional focus: Asia-Pacific

Total respondents from Asia-Pacific, including Australia:

For 2010: 47 | For 2009: 39

28. What percentage of your organization’s ATMs or your customers’ ATMs run Mi-
crosoft Windows today?

2010 2009
100% 35% 46%

50% - 99% 41% 44%

Less than 50% 15% 0
Don’t know 0% 5%
Not applicable 9% 5%

As elsewhere in the world, Microsoft Windows dominates the operating system market
for ATMs.

29. Are there plans to replace your organization’s current ATM software or your
customers’ current ATM software?

2010 2009
Yes, planned and budgeted for this year 13% 21%

Yes, planning for next year or the following year 28% 18%
No, we recently replaced it 7% 13%
No, there are no plans to replace the existing ATM software 33% 41%
Not applicable 20% 8%

The drive to change software is less in Asia than it is in other regions of the world, al-
though more than a quarter of respondents plan to make a change in 2011 or 2012. How-
ever, a third have no plans to change their software.

© 2010 NetWorld Alliance LLC  |  Sponsored by KAL 30

CHAPTER 4 A regional focus: Asia-Pacific

30. What is the primary driver (or drivers) for changing ATM software?

2010 2009
Increased security (such as EMV, 3DES, remote key, biometrics) 63% 51%

Cost reduction of the ATM network 57% 49%

An increase in productivity and efficiency 52% N/A
Providing an enhanced user experience (such as transaction personalization) 48% 38%
Added functionality (such as new transactions) 48% 51%
Improved ATM reliability 41% 46%
Support for new technology 41% 46%
Ease of changing software when needed 28% 28%
Improved support 28% 33%
Need for better customer relationships 28% N/A
None of the above 4% 13%

Increased security tops the priority list for changing ATM software, followed closely by
cost reduction, which has become a high priority for more respondents. Also, enhancing
the user experience through features such as transaction personalization has taken on a
higher priority as compared to the 2009 survey.

31. Which statement best identifies your organization’s multivendor ATM strategy, or
the multivendor ATM strategy of your customers?

2010 2009
ATMs from multiple vendors, running a single software application on all 24% 36%

ATMs from multiple vendors, considering multivendor software in

44% 26%
the future
ATMs from a single vendor, understand the benefits of multivendor ATM
9% 10%
software
ATMs from a single vendor, see no need for multivendor ATM software 0% 8%
Not a consideration 15% 10%
Not sure what this means 9% 10%

The benefits of multivendor software are well understood among FIs in Asia, even among
those that have not yet made the switch.

© 2010 NetWorld Alliance LLC  |  Sponsored by KAL 31

CHAPTER 4 A regional focus: Asia-Pacific

32. Select the three most desired new features of ATM software.
(Percent who included the below among their top three)

2010 2009
Remote monitoring of the ATM network 60% 51%
Multivendor ATM software 40% 28%
Cash management and forecasting 31% 28%
Customer preferences 27% N/A
Software distribution 22% 38%
Automated test tools 20% 13%
Support for biometrics 20% 18%
One-to-one marketing / purchase gift cards 18% 31%
Support for cash recycling 16% 28%
Bulk-note cash deposit 13% 28%
Envelope-free check deposit 11% 13%
Other 2% 1%

Desire for network efficiency ranks highly in Asia-Pacific as 60 percent of the respondents
identified remote monitoring as the most desired feature. Cash management and forecast-
ing also was a top desire, to aid FIs in being more efficient in managing vault cash. The
desire for multivendor-capable software significantly increased over the previous year.

33. What is the most critical change your organization or your customers’ organization
needs to make to its ATM network in 2010?

2010 2009
Reduce operational costs 33% 23%
Improve the ability to remotely manage the ATM network 17% 23%
Adopt enhanced security technologies 15% 21%
Create a better ATM customer experience 15% N/A
Improve customer functionality 15% 23%
Improve the user interface 4% 5%
No changes needed 0% 5%

Priorities have shifted in the Asia-Pacific market, as the drive to reduce operational costs
takes precedence over improvement of the customer experience.

© 2010 NetWorld Alliance LLC  |  Sponsored by KAL 32

CHAPTER 4 A regional focus: Asia-Pacific

34. Given customers have increasingly fewer reasons to visit bank branches, how im-
portant a delivery channel do you see your ATM network as a customer touchpoint
that allows you to compete effectively with other banks?

Some 82 percent of FIs in Asia- Becoming

Pacific consider the ATM “very Very important more important
51% 31%
important” and “becoming more
important” as a customer touch-
point vital to their competitive Becoming
advantage in the marketplace. less important
2%

Not important at all

2%
Same as before
Not applicable 3%
11%

35. Rate the following bank service delivery channels in order of importance as a
customer touchpoint.

Most Important 46%

2nd Most Important 41%
ATM 3rd Most Important 11%
4th Most Important 0%
5th Most Important 2%

0 10 20 30 40 50 60 70

Most Important 30%

2nd Most Important 20%
Branch 3rd Most Important 11%
4th Most Important 17%
5th Most Important 22%

0 10 20 30 40 50 60 70

© 2010 NetWorld Alliance LLC  |  Sponsored by KAL 33

CHAPTER 4 A regional focus: Asia-Pacific

Most Important 11%

2nd Most Important 4%
Call center 3rd Most Important 40%
4th Most Important 33%
5th Most Important 13%

0 10 20 30 40 50 60 70

Most Important 9%
2nd Most Important 26%
Internet 3rd Most Important 26%
4th Most Important 30%
5th Most Important 9%

0 10 20 30 40 50 60 70

Most Important 4%
2nd Most Important 9%
Mobile phone 3rd Most Important 13%
4th Most Important 20%
5th Most Important 54%

0 10 20 30 40 50 60 70

Traditional branches and ATMs rank highly in the Asia-Pacific market as well as other
regions, a surprise considering the growth of mobile transactions that garner headlines.
Perhaps the region is more traditional than the mobile hype would indicate.

© 2010 NetWorld Alliance LLC  |  Sponsored by KAL 34

CHAPTER 4 A regional focus: Asia-Pacific
Asia-Pacific leads in innovation
The Asia-Pacific region continues to be a
hotbed of innovation for ATM software, as
consumer demand pressures FIs to keep up.
In mature markets, such as Japan and
South Korea, consumers rely on a seamless
mix of ATM, online and mobile financial
services. In emerging markets, rapidly
advancing technology means that a multi-
vendor solution helps FIs stay current.
For instance, research firm Celent expects
explosive growth in the ATM markets in
China and India to continue, with more
than 350,000 ATMs in both markets
through 2010 and 2011. Both China and
India are predominately cash-based econo-
mies, and customers prefer the convenience
of 24/7 neighborhood banking via ATMs.
“Like India, China is experiencing rapid
growth in ATMs, driven by its largely
cash-based society, the low density of bank
branches at a time when demand for finan-
cial services is accelerating rapidly, and the
need to more aggressively deploy ATMs
beyond the largest metropolitan centers
to midsize and small cities and suburban
regions,” said Wenli Yuan, Celent senior
analyst and co-author of the report “The
Dragon and Tiger of the ATM Markets:
China and India.”
Mobile transactions have been the hot
topic in Asia, with some countries offering
more than 200 types of transaction from
smart phones. Contactless cards also are a
growing trend, as top-ups for transit cards,
tickets and other stored-value transactions.
“Asia is still the leader in this type of activ-
ity, although there are pilot projects all
© 2010 NetWorld Alliance LLC  |  Sponsored by KAL
FIs in other regions could learn from the Asian
banks that have made cash automation and
recycling a common service for consumers.
over the world, and the world is becoming
smaller in terms of differences,” said NCR’s
Gallagher.
FIs in other regions could learn from the
Asian banks that have made cash automa-
tion and recycling a common service for
consumers.
Zijin Fulcrum Technology, a KAL partner
based in Guandong, China, operates 20,000
ATMs and maintains software for nearly
60,000 units. The company is using trans-
action personalization as a marketing
advantage to reach its youthful audience
that relies on ATMs for cash transactions.
“Because cash is very common in China,
ATM users are mostly young people and
transaction personalization has great
attractions for young people,” said Zhong
Cheng, vice president for Zijin.
One-to-one marketing and transaction
personalization move the customer rela-
tionship forward, something that’s often
neglected at the ATM channel. How often
do consumers have to select their prefer-
ences from the same one-size-fits-all menus,
or view irrelevant advertising? The right
software can enable the ATM to feel like a
much more personalized interaction.
“When banks have different touchpoints,
instead of having multiple applications for
that, they should have one application for
all of them,” said Wincor’s Walsh. “FIs are
trying to reduce costs and offer consistent
35
CHAPTER 4 A regional focus: Asia-Pacific
customer experiences, and the best way to
do that is to have one application across all
channels.”
Savvy FIs break down the internal depart-
mental silo walls so those marketing efforts
cross channels to reach consumers with
individualized messages that build rela-
tionships. Ideally, the online channel will
know a customer’s ATM preferences and
vice versa.
“Quite often each of these channels is
completely independent with their own
information technology groups,” said NCR’s
Gallagher. “FIs can try to link these chan-
nels so they can optimize it and build the
system only one time.”
Of course, cost control plays a role for Asian
FIs as it does elsewhere.
“For us the most critical areas are the cost
of software maintenance and consumables,
such as journal rolls,” Cheng said.
Asian FIs such as China Construction Bank
and China Everbright Bank adopted KAL’s
Kalignite multivendor software across their
portfolios of more than 32,000 ATMs and
1,500 ATMs, respectively. China Everbright
Bank rolled out Kalignite over only eight
months. The installation allows CEB more
flexibility in growing its ATM fleet.
“One major advantage for us is a much
greater choice of ATM hardware now that
we have the Kalignite multivendor ATM
platform installed,” said Li Jian, general man-
ager of the CEB’s E-banking department.
Tisco Bank of Thailand relied on KAL’s
software to implement new transactions.
The new Tisco banking kiosks include
© 2010 NetWorld Alliance LLC  |  Sponsored by KAL
Savvy FIs break down the internal departmental
silo walls so marketing efforts cross channels to
reach consumers with individualized messages
that build relationships.
smartcard and ePurse transactions as well
as payment transactions for utility bills,
insurance, mutual funds, loan payments and
more. Tisco’s kiosks running the Kalignite
software communicate with multiple hosts
simultaneously to perform the transactions,
simplifying the back-end integration while
carrying the transactional workload on the
kiosk itself.
The kiosk application also doubles as a
teller station solution inside Tisco’s bank
branches. The flexibility of the Kalignite
kiosk application allowed Tisco to use it
at the bank’s teller stations to perform the
same set of transactions for teller-assisted
customer transactions with a modified
transaction flow.
With just more than 38,000 ATMs in India,
a country with a population of more than
1.2 billion, there is a huge demand for
ATM banking services across India. HCL
Infosystems, a banking technology integra-
tion firm, partnered with Nautilus Hyo-
sung to provide complete ATM solutions
for Indian banks, especially those serving
rural areas.
Nautilus Hyosung uses its hardware and
software expertise to customize offer-
ings for the Indian market. Nautilus, in
conjunction with HCL, designed units to
deploy ATMs in rural locations with rela-
tively low transaction volumes.
To enhance security, specialized software
36
CHAPTER 4 A regional focus: Asia-Pacific
such as NCR’s Solidcore for Aptra guards
against various attacks. NCR’s product
protects ATMs from inside-out skimming,
which involves insertion of malicious code
onto the ATM, usually by someone with
insider access. More than 100 customers
worldwide use this option for their single
and multivendor ATM networks. This
system allows only accepted software code
to operate, and the authorized code cannot
be modified, halting replication of mali-
cious code.
EMV, the chip-and-pin security scheme
pioneered in Europe, is making its way to
Asia-Pacific as well. Developed markets
in Taiwan, Japan, Korea and Malaysia are
among the first adopters of EMV technol-
ogy. Early adopters have used the security
as a brand differentiator in their market-
ing. Such early adopters have benefited
from the security and brand differentiation
as offering more secure cards with EMV
technology.
© 2010 NetWorld Alliance LLC  |  Sponsored by KAL
Security has stepped into the future with
biometric recognition. KAL has incor-
porated finger-vein recognition into its
multivendor ATM software. KAL uses Hi-
tachi Omron Technology Services finger-
vein recognition (FVR), which is being
widely adopted in Japan.
“FVR provides a high degree of security for
both the bank and the end user,” said KAL’s
Korala. “One of the best ways of using
FVR in ATM projects is to make its usage
optional to consumers and then provide
an incentive through higher withdrawal
limits for FVR authenticated transactions.
Banks can retrofit existing ATMs with an
FVR reader and consequently do not need
to wait for the ATM replacement cycle to
purchase FVR-enabled ATMs.”
37
Conclusion Take back control of the ATM
A Multivendor ATM software allows FIs to take
s financial institutions face grow-
ing complexity in the business,
matched only by the unrelenting
pressure for profitability, further integra-
tion of financial channels seems to be the
next wave of software development.
Multivendor software allows FIs to take
control of their ATM fleet. That covers
the gamut, from remote monitoring of
the ATM to managing security updates to
adding new functionality. An FI can handle
any or all aspects, or outsource certain
segments to trusted vendors. The bank can
do as much or as little as makes business
sense.
A customized multivendor solution allows
an FI to manage the ATM channel as a
competitive edge, as opposed to a com-
modity using off-the-shelf software. The
software tools are tied to the FI’s philoso-
© 2010 NetWorld Alliance LLC  |  Sponsored by KAL
control of their ATMs and make them a
competitive advantage for the bank.
phy and competitive positioning of the
ATM within their delivery channels. With
many FIs faced with mixed portfolios, us-
ing a single application simplifies manage-
ment from the ATM end of the chain as
well as the host end.
Implementing a change one time that mi-
grates across the network makes managing
the process less complex and less costly.
Simplifying the process allows FIs to con-
centrate on the value-added aspects such
as marketing and security that enhance the
relationship with the customer.
38