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UNLOCKING YOUR ATM “BIG DATA”

Unlocking Your ATM BIG DATA

Understanding the power of real-time transaction analytics

A Whitepaper by Stacy Gorkoff, VP, Strategic Marketing – INETCO®

SUMMARY

Unlocking Your ATM BIG DATA

Unlocking Your ATM BIG DATA

Banks and credit unions are heavily investing in technology initiatives such as mobile infrastructure and more sophisticated, interactive ATMs. These new technologies allow customers to initiate a broader range of cross-channel and self-service transactions that were typically handled by costly branch tellers and customer service representatives, such as applying for mortgages, inquiring about account balances or depositing checks. Expanding services and the growing number of customers choosing self-service channel options are resulting in an explosion of ATM “Big Data”. This mass amount of data is making it hard for banks and credit unions to keep service management risk in check with support costs.

This whitepaper discusses how real-time transaction monitoring and analytics software will help banks and credit unions gain easy access to complete ATM network traffic, quickly process huge amounts of transaction intelligence, and create timely, actionable statistics across a broad range of use cases, including:

  •  Customer service management – Reduce failed customer interactions by 25%
  • Support and systems management – Isolate ATM service issues 65-75% faster
  • Business and cash management – Improve ATM network profitability and cash flow handling

With real-time transaction monitoring and analytics, ATM channel managers, operations support and marketing teams will be able to utilize a centralized deposit of rich transaction information to analyze service delivery trends and produce customized performance analytics that can lead to improved customer satisfaction, lowered support costs and increased ATM profitability.

ATM BIG DATA – A PROBLEM OR AN OPPORTUNITY?

 An ATM network is a rich data environment. It plays host to an “always on” data source –your transactions. There is a massive amount of value in the real-time transaction data that flows through your ATM network.

Each transaction that travels across your ATM network contains information on what the customer is experiencing, how networks and applications are performing and what the business value of each transaction is from a revenue or service perspective.  Meta data reveals details such as the ATM terminal ID, geographic location and transaction status. Application message data contains valuable information such as the transaction type and transaction amount. Network level protocol information enables you to review the response and request times for each “hop” on the transaction’s network path. Switch response codes indicate what type of error may be affecting the completion of a transaction.  And the list of valuable data contained in each individual transaction goes on.

ATM channel managers, operations support and marketing teams all know transaction data holds great value when it comes to improving customer experience, speeding up problem isolation and analyzing profitability based upon card types, ATM locations and value added services. But the cost of retrieving and analyzing this data should not exceed the benefits.

MINING ATM “BIG DATA ANALYTICS IS NOT EASY

While existing ATM management solutions produce statistics based on device performance, withdrawal and deposit transactions from the ATM, many do not capture statistical information on ancillary service transactions, zero revenue transactions or cross-channel initiatives. These include transactions such as mobile e-receipts, interactive teller exchanges, bill payments, balance inquiries, account to account transfers, marketing fulfillment campaigns and value added services such as mobile top-up, prepaid gift cards or transit ticketing.

There are a variety of ways to acquire ATM transaction data, including switch logs, journals, core banking system databases, 3rd party data feeds, your network and agents. Each has advantages and disadvantages.

Growing volumes and diversity of ATM transactions is translating into massive data sets that present new challenges when it comes to security, operational support and business analytics. In a world where services are becoming more decentralized, banks and credit unions often face storage wars, capacity issues and forwarding issues as they attempt to mine an overwhelming amount of data. It often takes many manual labor hours for this information to be gathered and pieced together across multiple tools and department silos. Tracing end-to-end transactions that span complex, virtual and Cloud-based infrastructures is also challenging due to limited visibility.

The resulting incomplete transaction intelligence makes it tough to control management risk. This is why forward- thinking banks and credit unions are now investing in real-time transaction monitoring and analytics software to complement existing ATM management solutions.

SOURCE                   ADVANTAGES                       DISADVANTAGES
 

 

Switch logs

 

Contain transaction and timing data for every transaction the switch processes

Lack visibility into the growing number of

transactions the switch doesn’t process (value added services, RDC, incomplete transactions). Imposes overhead on switching infrastructure

ATM journalsContain a record of every transaction ATM attemptsDisparate formats, only available on demand (or once a day), no timing information
Core banking databases 

Definitive record of all consumer transactions

Highly summarized data, may lack ATM details, no timing information, failures and incompletes are missing
3rd Party data feedsTypically well-formatted for easy analysis. Includes financial breakdowns of fee income.Can be expensive. Only delivered periodically (e.g. daily or monthly). Little flexibility in requesting additional information
Your networkDefinitive source of everyLots of data, diverse formats
 

ATM agents

Can provide access to transaction data when you don’t own the network or the switch.Need to distribute, install, and update agent periodically

 

EXTRACTING FULL VALUE OUT OF ATM TRANSACTION DATA

The desire for banks and credit unions to tap into more timely, “actionable” data is driving demand for more flexibility and insight into how defined ATM terminal groups, authorization hosts, ancillary service offerings and card types are performing.

Real-time transaction monitoring and analytics software offers a cost-effective way to access a centralized deposit of rich transaction intelligence. The software either displays transaction data within its user interface, or streams it to a management platform of choice, such as NCR’s APTRA Vision, Gasper, NCR OptiCash, Splunk, HP Operations Manager or IBM Tivoli. This helps financial institutions analyze transactional data directly from their networks and correlate it with other ATM-generated data to harvest deeper insights across the entire ATM network.

Transaction analytics captured by a real-time transaction monitoring and analytics solution can be collected over a set period of time (e.g. one hour). This data can be used to create more profitable ATMs, quickly isolate issues affecting customer interactions and uncover opportunities for cross-selling and customized marketing campaigns. By having the ability to aggregate real-time transactional data by ATM, service type or card base, banks and credit unions can also establish proprietary insights into consumer or card trends, and offer these reports to their clients.

Transaction interval statistics commonly tracked today are based on:

  • Transaction  status – The total number of approved, declined, failed, reversals, force posts and abandoned transactions by ATM terminal ID, service application, card base or switch host
  • Cash totals by transaction  type – Cash positions for withdrawals, deposits, account transfers, failures, approvals, declines, force posts, reversals on any ATM 
  • Key code function – A breakdown of customer transactions by function such as withdrawals, deposits, inquiries, bill payments, transfers and other value added services
  • Data events – Includes transaction events such as ATM card capture and PIN failures
  • Card BIN related information – Information on competitor cards using your ATMs, “on us” versus “off us” transaction comparisons or ancillary service tracking
  • Network information – A breakdown of slow transactions due to TCP/IP issues such as third party or telecom connection time outs, latency of transient connections or application response time issues
  • ATM device statistics – Information on transaction errors occurring at the ATM such as cassette usage, bill dispenser or printer issues
  • Response code errors – Total number of transactions by switch response code error

ENHANCING KEY PERFORMANCE INDICATORS (KPI’S) WITH TRANSACTION ANALYTICS

The right transaction monitoring and analytics software will help banks and credit unions gain easy access to complete ATM network traffic, quickly process huge amounts of transaction intelligence, and create timely, actionable statistics to feed a broad range of KPI’s, including:

Customer service management – How can I better serve my ATM customers?

  • Customer usage by time and function
  • Number of incidents reported by end customers
  • Number of approved transactions by card type (debit, EFT, credit, prepaid, etc.), service type (withdrawal, deposit, mobile top-up, bill payment, etc.) and ATM terminal ID

 Incident and systems management – How can I reduce ATM support costs?

  • Uptime and availability specific to ATM, switch, third party service connections, card types
  • Direct business cost associated with system downtime (service violation compensation and operational support costs)
  • Payment failure rates by root cause (lost communication errors, host or third party connection time outs, message authentication code (MAC) errors, transaction status errors and decline response code errors)
  • Number of first call resolution rates (lost communications or no fault found service calls)

Business and cash management – How can I make my ATM channel more profitable?

  • Total business cost associated with system downtime (loss of business)
  • Failed customer transactions by value of service revenue lost
  • Total cash withdrawal, deposit, and account to account transfer amounts by ATM terminal (on an hourly basis for more precise information on cash level holdings and cash replenishment planning

TRANSACTION ANALYTICS CASE STUDY

This is an example of a bank in the United Arab Emirates who faced the following problems:

  • ATM profitability reports were becoming difficult and time-intensive to prepare
  • The ATM operations and marketing teams lacked visibility into the customer experience
  • These teams were reliant on an incomplete, fragmented view into ATM device, transaction and cash flow performance to make key decisions

The goal was to help their ATM operations and marketing teams manage targeted campaign performance, enhance the profitability of their ATM channel, and ensure important customer interactions are secure and reliable. By investing in real-time transaction monitoring and analytics software, the bank was able to:

  • Produce 30+ customized analytics to enhance profitability of the ATM channel
  • Isolate ATM service issues 65% faster
  • Reduce failed customer interactions
  • Improve customer segmentation and manage targeted campaign performance
  • Conduct near real-time monitoring of cash levels at the individual ATM level

Rich, actionable transaction data is being forwarded into their existing ATM management solution on an hourly basis for a complete, one-stop view into ATM device, cash management and transaction network performance, including:

  • ATM deposit and withdrawal cash totals, broken down by currency type
  • Number of withdrawals on us, broken down by debit, prepaid and E-Dirham
  • Number of withdrawals by others, broken down by UAE switch, Visa and MDS
  • Number of prepaid card reloads, credit card and utility bill payments, broken down by type
  • Number of account to account transfers, cardless transactions, pin changes, balance inquiries, and statement requests broken down by on us, UAE switch, Visa and MDS

WAS THERE EVER A BETTER TIME TO HARNESS THE POWER OF REAL-TIME TRANSACTIONAL DATA?

Transaction data and analytics offer transformational opportunities for today’s financial institutions. Yet a lot of this data loses its value because analyzing and acting on it in real time can be a challenge. Transaction monitoring and analytics software makes it easy and affordable for banks and credit unions to access a centralized deposit of rich transaction intelligence found on ATM networks and in the Cloud, providing significant opportunity to improve customer experience, reduce support costs and make your ATM channel more profitable. Comprehensively manage your ATM business, and successfully deliver the right message to the right customer at the right time, by harnessing the power of real-time transactional data today.

About INETCO®—Every transaction tells a story™

INETCO® Systems Limited provides real-time transaction monitoring and analytics to IT operations teams that are looking for a faster, non-invasive way to identify application and infrastructure bottlenecks and ensure optimal service and business process delivery within their production environments. INETCO’s  solutions are currently deployed in over 50 different countries. Happy INETCO Insight® partners and customers include a variety of global companies spanning the banking, ATM, retail, healthcare, travel, telecommunications and payment processing markets. www.inetco.com

Shawbrook Bank “cautiously optimistic” as it Publishes Half Year Report for 2020

Shawbrook Bank “cautiously optimistic” as it Publishes Half Year Report for 2020 1
  • Financial performance impacted by the pandemic
    • Expected credit loss (ECL) charges of £45.8 million recognised on loans and advances to customers
    • Profit before tax (PBT) was impacted by the adverse effects of COVID-19 and the subsequent provisions set aside, reducing by 89% to £5.9 million
    • Customer deposits rose by 25% to £7.6 billion while capital remained strong with a CET1 ratio of 12.3%
    • A total of 15.9k payment holidays granted across the Group
  • The specialist bank continued to operate effectively through COVID-19
    • 98% of employees moved to remote working within days and no staff furloughed
    • Successfully achieved accreditation under UK Government’s CBILS
    • Continued investment in technology to digitalise the business
  • Shawbrook “cautiously optimistic” as momentum begins to return to certain specialist sectors

Shawbrook Bank has today (Monday 10 August 2020) published its half year financial results for the period ending 30 June 2020.

The specialist bank confirmed it had set aside £45.8 million of provisions to provide for potential future loan impairments caused by COVID-19. The bank reported it had also granted a total of 15.9k payment holidays to support its customers through the pandemic, of which 10.8k remained in force at 30 July 2020.

As a result of such provisions, the bank’s profitability was impacted with a reduction in PBT by 89% to £5.9 million.

Despite the challenging market conditions, the bank retained its active position in the UK savings market, increasing its retail savings deposit base by 25% to £7.6 billion. During the period, Shawbrook also successfully completed a £75 million Tier 2 re-financing to further optimise its capital structure.

Ian Cowie, Shawbrook Bank’s Chief Executive Officer, said that COVID-19 has had a clear impact on the bank’s financial performance, but Shawbrook remained in a position of strength.

He commented: “Prior to COVID-19, the Group had continued to make good financial progress, starting 2020 with a strong balance sheet and prudently positioned capital and liquidity base.

“To further optimise the Group’s capital structure, during H1 2020 we initiated a Tier 2 refinancing and, despite the challenging market conditions, successfully completed the £75 million issuance in July.

“We have also maintained our active position in the UK savings market. However, the longer-term economic impacts of the pandemic remain hard to predict and as a result we have recognised expected credit loss charges in the period on loans and advances to customers of £45.8 million and on loan commitments of £1.5 million.

“While this has clearly had an impact on profitability, our capital strength positions us well to support our customers and grow our business in line with appetite as we enter the second half of the year.”

Throughout COVID-19, Shawbrook maintained full operational functionality, with no staff furloughed and 98% of employees transferred to remote working within days of the UK lockdown being announced.

The bank adopted a series of concession opportunities across its product range to help alleviate the financial impacts of COVID-19 on its customers. During this time, Shawbrook also successfully achieved accreditation to the UK Government’s Coronavirus Business Interruption Loan Scheme (CBILS) to provide further funding support to its SME clients.

Mr Cowie added: “Since the outbreak of COVID-19, our focus has remained on supporting our staff, customers and partners while at the same time safeguarding the long-term sustainability of our business.

“When the UK lockdown was announced in March 2020, we acted with speed and agility, moving to an almost entirely remote operation within days. Led by a stable and experienced management team and with the support of new and existing technology, we have continued to operate effectively throughout this period.”

Throughout the first half of the year, the bank also continued to identify investment opportunities to further digitalise its proposition, with a core focus on its SME offering.

Mr. Cowie added: “Notwithstanding the pandemic, we have continued to invest in our business to help drive our strategic ambition to become the UK’s Specialist SME Lender of Choice. As well as the ongoing deployment of targeted digital solutions across the Property, Consumer lending and Savings businesses, our investment in the development of a new growth platform in our Business Finance franchise will serve to further modernise our offering, delivering an enhanced customer journey as well as significant operational efficiencies.”

Looking to the future he continued: “Although significant uncertainties regarding the broader macroeconomic impact and pace of recovery remain, we are cautiously optimistic in our outlook as we start to see signs of momentum returning to certain of our specialist sectors.

“Our management expertise and prudent approach to credit decisioning, combined with investment in our digital propositions, means we are well positioned to adapt and respond to opportunities as they arise throughout the second half of the year.”

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Banking

Better banking—everyday in everyway

Better banking—everyday in everyway 2

By Bruno Pešec president at Pesec Global.

Some of the most innovative companies are also great at continuous and incremental improvement. I want to talk about three key points when it comes to succeeding with implementation of continuous improvement.

First is acknowledging that employee empowerment is at the heart of continuous improvement. The second is striving for total involvement by everybody, everywhere, everyday. Final, third point is that improvement is improvement. Cents turn into dollars.

Let’s expand on each.

Employee empowerment is at the heart of continuous improvement

In “Kaizen: The Key To Japan’s Competitive Success” Masaaki Imai divulges following as the core principles of continuous improvement:

  1. Process orientation. “Before results can be improved, processes must be improved, as opposed to result-orientation where outcomes are all that counts.”
  2. Improving and maintaining standards. “Lasting improvements can only be achieved if innovations are combined with an ongoing effort to maintain and improve standard performance levels.”
  3. People orientation. “Improvement is people-oriented and should involve everyone in the organization from top management to workers at the shop floor. Further more, it is based on a belief in people’s inherent desire for quality and worth, and management has to believe that it is going to “pay” in the long run.”

These principles are interlinked and interdependent. Without empowered people there can be no improvement. Micromanaging and overbearing bureaucracy stifle human creativity and desire to do better.

Due to the nature of my work I have residence in two countries, Croatia and Norway. Consequently, I have bank accounts in both as well. On one occasion I was had to make a bank transfer while in Croatia, and went to my local bank office to do so.

To my surprise they requested my debit card. I explained that I’ve forgotten it, but surely that shouldn’t be a problem as I’m here in person, have my national ID as well as passport, and cash required for transfer. The bank teller explained that he can ask branch manager to approve it, but it takes seven days.

Since the manager was right there, I asked why can’t we do it right now, since we are all here. “Sorry, such are the policy and procedures. I know it doesn’t make sense, but we must follow them.”

Banking is a highly regulated industry; fraud detection and anti-money laundering processes must be impeccable; but above is neither.

Everybody, everywhere, everyday

Bottom up is usually brought up when discussing implementations of continuous improvement. While it is true that those closest to work are most suitable to improve it, they often lack decision making power and budget to do so on a scale.

That’s why “everybody, everywhere, everyday” is a better mental model. No one is absolved of improvements. At any given moment there are at least hundred things you can improve right now, right here.

Think deeply about following:

  • Everybody in the organisation should be aware and have an understanding of organization’s strategy and objectives. There’s shouldn’t be multiple interpretations, and it should be unambiguous. Without clarity improvement efforts are going to be scattered and without impact.
  • No elitism, no absolution. Everybody should be actively committed to daily improvement, regardless of their rank or seniority. Leaders should be especially cognizant of leading by example. After all, how can they demand from others what they themselves are not doing. That’s hypocrisy at its finest.

    Bruno Pešec

    Bruno Pešec

  • To improve is to learn, and to learn is to improve. Unlock even more value from your continuous improvement efforts by capturing the learning and sharing it broadly and deeply within the organisation. Ideas spawn ideas, perpetuating a virtuous cycle. Peer learning is also a powerful intrinsic driver.

Improvement is improvement

Director of one European bank invited me to their customer service centre, and we were to discuss how could they innovate better. After the meeting I asked him to take me on the walk around the office so I can observe the processes. He was more than happy to oblige.

The walls were plastered with wallpapers and dashboard, colourful metrics were displayed one the hanging screens, and there was a special area dedicated to the “Hall of fame.” Much to my delight there was a wall dedicated to the improvement ideas.

It was covered with large sticky notes, each with few sentences about the problem and potential solution. I picked a few at random, and noticed that they have dates written in bottom left corner. All of the dates were months ago.

Perplexed, I asked the nearby call operator to illuminate me. What’s going on? She fired her response like she was just waiting for someone to ask her that question:

“After each call we used to write down some improvement ideas. At the end of the week we collated and submitted them to the improvement department. They were constantly rejecting our proposals for either being too small or not innovative enough. After few weeks we stopped sharing and tried to implement what we can. That resulted in one of us being scolded for taking initiative without approval, so we just stopped altogether.”

Director was blushing, but hasn’t said anything. I thanked the operator for her honesty, and told the director that he should find time to fix this. By ignoring small, incremental improvements, they are effectively atrophying their organisational muscles. And not to mention all the savings that are left behind, lost forever. Cents turn into dollars.

Better banking

I’ve talked about three key points in regards to the role of employee empowerment in the implementation of continuous improvement, and what you can do to use them well. Let me remind you that if you really want to engage in this, the first thing to do is take any of them and start today.

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Banking

UBX appoints new Chief Investment Officer

In line with its strategy to explore and invest in companies and platforms of the future, UBX—the Fintech and Corporate Venture Capital arm of Union Bank of the Philippines (UnionBank) — is announcing the appointment of Matthew Kolling as the company’s Chief Investment Officer (CIO).

Matt Kolling

Matt Kolling

As CIO, Kolling will be managing UBX’s Corporate Venture Capital (CVC) fund. He will also play a key role in raising capital for UBX while assisting the company in key corporate transactions, including the structuring of joint ventures and acquisitions.

Prior to his appointment at UBX, Kolling has been Head of Venture Investments at Aboitiz & Company since 2019, wherein he had been working with UBX on investment portfolio decisions. Before that, he held senior positions in Private Equity, Venture Capital, and Investment Banking at firms such as Providence Equity Partners and Morgan Stanley in New York.

Kolling has more than 20 years of experience in managing investments and deals in the Technology and Telecommunications industries and is active in Venture Capital and startup communities in the Philippines and the Southeast Asian region. He currently chairs the Manila Angel Investors Network, among others.

“We at UBX are excited to welcome Matt as our new CIO. We firmly believe that Matt will be instrumental in driving value creation opportunities, both within the CVC fund and our corporate ventures. We look forward to working with him as we fulfill UBX’s vision of a future where banking services are embedded into everyday experiences that matter,” said UBX president and CEO John Januszczak.

Meanwhile, UnionBank president and CEO Edwin Bautista said, “The addition of world-class talents in our pool reinforces our strategy to future-proof the organization and our business as we prepare for many new opportunities that come with the changing times.”

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