Wincor Nixdorf is betting the ranch on intelligent, recyclable cash cassettes in its bid to win market share from ATM rivals Diebold and NCR. But some industry insiders are questioning the wisdom of this move before industry standards have emerged. Robin Arnfield reports.
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Swapping cassettes between different types of terminals enables banks and retailers to cut their cash-handling costs by automating the recycling of their cash. This involves banknotes deposited by customers or employees being made available for dispensing to other customers, after having been electronically counted and authenticated by a hardware unit.
Wincor Nixdorf has branded its new cash recycling technology as CINEO, which stands for Cash IntelligenceNeo (new). What distinguishes CINEO from other vendors retailer/bank/ATM cash-recycling offerings is an intelligent chip which not only counts the contents of the cassette and records staff access, but also reports back to a server at a central location. Employees log on and off as they handle the sealed cassettes, without needing to count, balance, replenish or empty the contents.
The central server keeps count of exactly how much cash is held at each CINEO-based teller terminal or ATM across a banks network. Cash inventory forecasting and optimisation is provided by Wincor Nixdorfs ProCash Analyser software.
The previous generation of Wincors cash register and ATM cassettes, which do not contain chips, will be phased out within two years.
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By GlobalData"Wincor Nixdorf has taken the state-of-the-art to a new level with the elimination of cash replenishment," says Bob Meara, a senior analyst with US consultancy Celents banking group. "This is a step beyond existing automated cash-handling offerings by other vendors, which require manual intervention."
Deposit automation and cash-recycling have been experiencing a boom worldwide, led by Japan, says Retail Banking Research (RBR). The global number of automated deposit terminals (ADTs) ATMs that enable bank-notes and cheques to be deposited without envelopes and processed automatically will grow by a CAGR of 11% between 2009 and 2020 to 1.4m, forecasts RBR. This is twice the growth rate for ATMs only offering envelope-based deposits.
Cash-recycling is available at two thirds of the 464,000 ADTs installed worldwide as at the end of 2009, RBR says. In Japan, all ATMs offer cash-recycling, the UK-based consultancy says.
According to RBR, Wincor Nixdorf was the leading supplier of ADTs in Western Europe with a 37% share of installations at the end of 2009. Its deposit-automation technology is branded as CCDM (cheque-cash deposit module).
"In the US, we have 12,000 deposit-automation ATMs in operation using our CCDM technology, and other vendors have 28,000 deposit-automation ATMs installed in the US," says Alan Walsh, head of banking at Wincor Nixdorf USA.
Wincor Nixdorf says that it has so far installed 20,000 cash-recycling systems worldwide, and that 80% of all German banks already use this technology. Since CINEO was only launched in 2010, most of these 20,000 systems use Wincor Nixdorfs older generation of cash-recycling technology.
One market where Wincor Nixdorf has seen particularly steep growth is Australia. According to US consultancy Edgar Dunn & Company, Wincor Nixdorfs share of the Australian ATM market rose from 1% at 30 June 2008 to 16% at 30 June 2010.
Banks
Wincor Nixdorf has installed its CINEO technology at several European banks branches, Walsh says.
"In the US, two banks, both among the top 20 US banks, are planning to run pilots of CINEO automated cash-recycling in a handful of branches each," he says. "The pilots are expected to go live in three to four months time."
With cash and cheques being processed automatically by CINEO, human tellers will be freed to provide a greater level of customer service such as one-to-one marketing. To do this, tellers will be equipped with intelligent tills that deliver customer-specific information on bank products, Walsh envisages.
Despite the efficiency gains from introducing automated cash recycling, bank adoption of CINEO faces obstacles, mainly because of the proprietary nature of Wincor Nixdorfs intelligent cassettes, Meara says.
"The key to the success of CINEO would be broad adoption by banks, retailers and cash-in-transit companies," Meara says. "Even with limited adoption within a single bank, all existing hardware would need to be replaced. This would be difficult as banks prefer to hedge their options by using hardware from different suppliers."
Meara says it is more likely that Western Europe will see large numbers of retailers, banks and cash-in-transit companies adopting CINEO rather than the US.
"This is because Wincor Nixdorf has a dominant position in ATMs in Europe, whereas Diebold and NCR are market leaders in the US ATM market," he says.
"It could be that Wincor Nixdorf, Diebold and NCR all agree a standard for intelligent cash cassettes and the mechanics for communication. This would be a win-win for the industry, but arguably would be bad for Wincor Nixdorf, as it would erode the firms point of differentiation."
Meara questions the benefit for early-adopters of implementing CINEO before industry standards have emerged.
"For banks, there is going to be a benefit in being latecomers," he says. "At the moment, enterprise-wide automated cash management is a tall order and will not take the industry by storm," he concludes. ?
