3 Reasons to Outsource ATM Services

Banks and credit unions that service their own ATMs leave employees open to an extremely high-risk situation. Since 2020, "smash and grab” ATM crimes have skyrocketed as reported by the ATM Industry Association. Not only that, but between 2021 and 2022, ATM crime went up an estimated 165%.  

Why Outsourcing Works 

While many financial institutions have made adjustments to discourage robberies like adding GPS tracking to cassettes and safety gates around ATM kiosks, many continue the risky practice of filling and maintaining their own ATMs. Thankfully, there’s a safer option that won’t break the bank. Here are three reasons why outsourcing to a cash management partner can save on time and resources while keeping your staff safe. 

1. Lowers risk to bank employees. 

It’s no secret that drive-up ATMs are most dangerous when the ATM is open, with many robberies occurring using violent force. While this fact reflects attacks against trained armored car carriers, it implies a similar risk for bank employees that self-service their ATMs, with an even higher risk of injury. In fact, 40% of all ATM crime occurs in the evening, when employees are wrapping up the work day. By using a cash management partner to service your bank or credit union’s ATMs you will be hiring trained professionals that are armed and trained in various scenarios to handle potential threats, lowering the risk of harm to your employees and customers. 

2. Saves time and resources. 

Although your team members may be able to service ATMs, it doesn’t mean they should. Not only does it make your employees and ATMs extremely vulnerable to theft, but allocating time and budget to training your employees in ATM replenishment can still lead to under-preparedness and dangerous situations, as well as waste valuable resources. Outsourcing your ATM replenishment allows your employees to have more time to focus on tasks that help the financial institution run more efficiently and promotes revenue growth through securing more customer depository accounts and loans. 

Something else you should consider if you happen to be a part of your institution’s risk department is the potential for miscommunication internally. This was especially important for banks and credit unions during the COVID-19 pandemic with branches across the country shutting down and re-opening at different times. For example, your operations department might decide that ATMs will be serviced by the armored car carrier during temporary closings and self-serviced during openings, but you might be unaware of this. This creates added risk that isn’t considered and impacts your role in the risk department. 

3. Improves overall efficiency and cash operations. 

During COVID-19, many financial institutions that previously self-service ATMs began to outsource their ATM servicing and cash management to armored car carriers when states went into lockdown and branches had to close while their drive-thru and ATMs were still open. Many financial institutions found that outsourcing their ATM servicing lowered the financial institution’s liability while increasing their overall efficiency surrounding their cash operations. 

One of the ways providers helped financial institutions is by applying the Just in Time (JIT) inventory method to ATM management for specific ATMs. The JIT method works to lessen the volume of cash on hand. This method predicts that banks and credit unions can reduce waste and save money by only carrying enough inventory to meet customer demand based on accurate forecasting. Using the JIT method lowers the amount of cash that banks keep in their ATMs, as well as the amount of time armored car carriers spend at ATMs. This method ultimately serves to reduce liability and risk to the financial institution. 

Partner with Industry Experts 

ATM crime remains a relevant issue. Last year, Congress introduced the "Safe Access to Cash Act of 2023", a proposed law aiming to establish criminal offenses concerning ATMs. It introduces penalties for robbery or property offenses related to ATMs, with defined terms such as ATM and specific actions deemed illegal. The bill also suggests enhancements to existing legal provisions to include these new offenses in the legal framework. While new laws aim to make such crimes harder to come by, we all must take the necessary precautions to mitigate ATM offenses where we can, and Loomis is here to help. 

Make sure to look for a cash management partner with comprehensive solutions for replenishment, settlement, pickup, processing, maintenance, and forecasting. In addition, they should offer a wealth of industry best practice knowledge and training to ensure you get the most efficient service, and that your people and assets remain secure.