Latin Finance - July 2008 - (Page 39)

investment banking depository accounts (i.e. savings and checking). This is partially the result of legislative pressures capping fees and commissions. It is also a consequence of moving downstream into lower income segments where deposits are smaller, often migratory, and the ability to up-sell and crosssell is hampered. Traditional usage models for debit cards focus on interchange fees at POS (point of sale) and fees for cash access and account information at ATMs. Income from ATMs can be considerable; some Colombian banks report up to five dollars a month per card related to ATM fees. Legislative caps are already in the works to cap charges for this type of service and banks will need to find ways of charging financial partners for usage rather than end users. For this to happen, ATMs must offer value-added services that cater to both customers’ and service providers’ demands. This is already pioneered by ATM network Redlink in Argentina, and customers can pay utility bills and re-charge phone cards. Spain’s La Caixa (not to be confused with the Brazilian bank) is exploring remittance payout models with its correspondent banks in Ecuador and Colombia. attack given their age. New ATMs will include biometric safety features. These types of ATMs are already present in Colombia and are part of Diebold’s shipment to Caixa Econômica Federal in Brazil. This plays well with consumers because 53 percent note safety as a reason for not using ATMs more. In some cases the adaptations for ATMs will be much simpler. Mexico City registered 140 ATMs stolen, lock, stock and barrel in 2007. The solution will be to include reinforced steel bases that can be bolted to the floor. Conclusion Albeit changing, the primary role of the ATM in the short term will continue to be cash dispensing. Additional offerings will eventually be provided more seamlessly and with shortened development times given the increasing adoption of open access networks and Windows XP operating systems. Banks in Latin America are beginning to leverage the marketing and customer service aspects of the ATM, converting it into a relationship device and a platform for cross-selling. Effectively integrating ATMs with other products and channels will allow financial institutions to solidify their customer relationships and enhance their brand. Increased security, enhanced product offerings, personalized marketing, and an adoption of open access networks will drive growth and innovation in ATMs across the Latin American region. I Increased Capabilities The new capabilities of ATMs will also add depth to personalized customer service and allow banks to provide individualized relevant promotions as they insert their card into the ATM. In terms of customer service, banks can personalize ATM screens based on the type of account the cardholder has, thereby facilitating the service options for different customers. If desired, the customer can also indicate what features they would like to have. A Kroll-InfoAmericas study in late 2006 revealed the latter to be particularly appealing to small merchants and companies. They regarded this ability to program ATMs for their individualized needs as a means to reducing the reliance on tellers without having to resort to on-line banking. The principal enabler for these service concepts is a move toward the IFX (Interactive Financial Exchange) as the standard for electronic communications in banking channels for both banks and suppliers. Celent consultancy estimates that the penetration of the IFX standard will reach 60 per cent of financial institutions by 2009. Further enabling these developments is the adoption of Microsoft Windows XP as the operating system with which to centrally administer programming and changes to individual ATMs. It remains uncertain whether banks will fully embrace proprietary software for administering ATMs or if they will opt for open source such as Java that would allow to switch from Windows to Linux. Either way, 83 percent of banks in the region are interested in strengthening their ATM networks with these customer service attributes. Barring all of the technological advances, there is a growing concern with crime and abuse of ATMs. The older generations of ATMs in Latin America are susceptible to card cloning, penetration of the vault and tampering with the cash dispenser. The Mexican Banking Association estimates that nearly one-third of the ATMs in the market are vulnerable to 2008 LATINFINANCE 39 guide http://www.temenos.com http://www.temenos.com

Table of Contents Feed for the Digital Edition of Latin Finance - July 2008

Latin Finance - July 2008 Contents Investment Banking Outlook Compensation Survey Colombia Investment Banking Borrowers vs. Investors Banorte Profile Braskem Financing Strategy Brazil Hydro Finance Peru Port Privatization Panama Money Flows Argentina Local Markets Guide to Banking Technology Who Said That?

Latin Finance - July 2008

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