This article appeared in the C-store Self-Service Executive Summary, Summer 2006.
From desktop PCs and notebooks to ATMs and kiosks, software is changing the way users interact and companies do business.
Most of that change is attributed to the widespread use of Microsoft Corp.'s Windows operating system. The International Data Corp. estimates that Windows holds about 90 percent of the client operating system market.
In the ATM world, Windows' emergence has necessitated a shift in thinking, practice and implementation. Put simply, software advances have given birth to functional needs.
"(ATM deployers) have challenges across the board because of software, as far as integrating their CRM and new transactions. And that has given us opportunities for business," said Steve Risto, Americas director of NCR's Aptra Software Center of Expertise. "The biggest differentiator (in the manufacturing space) is whether you'll be able to provide a comprehensive solution, because customers still want a complete solution. Multivendor software is just part of it."
A new perspective
The separation or, more specifically, liberation of software from ATM hardware is giving financial institutions more opportunity, and that creates a space for other players.
"It allows banks to purchase hardware from one vendor and software from a totally different vendor," said Rick DuVall of Omaha, Neb.-based ACI Worldwide Inc. "And it's just my perspective, but I think it's intuitive that the business is going to become much more competitive."
While open platforms are stiffening the competition for manufacturers, they're leveling the playing field for FIs, said Aravinda Korala, chief executive of Edinburgh, Scotland-based multivendor software provider Korala Associates Ltd. (KAL). Software forces FIs to think beyond basic cash-dispense and into the arenas of customer relationship management, personalization and cross-channel integration.
"The big banks can afford to be more visionary about this stuff," he said. "They changed a long time ago."
Now multivendor software is opening doors for smaller FIs, Korala said. And though it's difficult to predict when the majority of U.S. FI ATMs will stand on level ground, change is already evident in Europe, where the migration from OS/2 to Windows is nearly complete, said Martin Macmillan, CEO of ATM software specialist Level Four Software Ltd.
In the United Kingdom, Nationwide Building Society, which operates 2,300 NCR and Wincor ATMs, installed KAL's Kalignite NDC software platform across its network in 2004. Kalignite replaced NCR's Aptra and Wincor's ProCash software.
Korala said that shift allowed the bank to launch common business functionality across all of its channels. And in Tokyo, where Shinsei Bank in January 2006 became the first Japanese FI to support the international XFS standard, Kalignite is used to provide cash-recycling, advertising, software distribution and remote ATM monitoring.
"One of the things in our industry that made us stand out was that we were able to add different functions to the ATM," said Steve Hensley, KAL's vice president of sales and marketing. "I think it's important to know, when we talk about multivendor, that we're talking about a platform that can run with about 26 vendors — NCR, Wincor, etc. Now banks can start to consider depositing checks, etc., at the ATM without completely replacing the existing ATM. You have one platform to manage all devices."
A challenge or opportunity in the States?
Like KAL, however, the United Kingdom's Level Four sees differing perspectives on either side of the pond.
"The market really falls into two camps," Walsh said. "The multichannel camp, which has sophisticated branch networks, really wants to bring the ATM in from the cold. … The other camp is the commodity product camp that is looking to drive down the cost of cash dispensing through third parties."
