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ORLANDO, Fla. – ATM outsourcing is not right for every financial institution, and despite its many benefits a financial has to consider factors such as structuring their program, choosing vendors, and deciding whether it wants to outsource all or part of their ATMs before making the shift. In their session on “ATM Outsourcing: What is the True Impact on Profitability,” Bryan Pisciotta, VP, Citibank, NA and James Braddock, VP, UltraNetwork for UMB Financial Corp., shared their financials’ experiences when they decided to outsource their ATM services to third-party providers. In the session moderated by Dove Consulting’s Tony Hayes, managing director, Financial Services Practice, Pisciotta explained that Citibank has both proprietary ATMs – 2,645 full service ATMs that handle 7,200 transactions a month – and outsourced ATMs – 485 cash ATMs that do 1,450 transactions a month. The proprietary ATMs are in 10 states, D.C. and Puerto Rico; the outsourced ATMs are in 20 states, D.C. and Puerto Rico. Pisciotta said Citibank decided to outsource some of its ATMs because it provided single focus accountability and direct management. For UMB Financial Corp., Braddock explained the bank’s decision to outsource its ATMs was prompted by the financial limitations of acquiring more ATMs. The bank owns 490 ATMs in Walgreens and Wal-Mart in six states that handle 900,000 total ATM transactions a month – 1,725 average transactions per ATM a month. One hundred Walgreens ATMs are owned and operated by Welch ATM systems; one Wal-Mart store-ATM is managed by Welch ATM Systems, and 200 Walgreens ATMs are managed by eFunds Inc. According to Braddock, the growth in the use of debit cards took traffic away from UMB’s ATM traffic. Before outsourcing, he said it took about 650 offsite transactions a month for the bank to break even on the costs. With outsourcing, that break-even point has been reduced to 300. Braddock and Pisciotta agreed the two main reasons to outsource ATMs is to expand distribution and do so at a lower cost because third-parties operate ATMs at a lower cost than a traditional in-house department. Braddock, for example, said UMB has seen a 60% increase in its ATM network size. For Citibank, Pisciotta said the bank can operate its outsourced ATMs at half the cost of traditional ATMs. -

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