Pros of Insourcing (Rather than Outsourcing) Your ATMs

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The decision to insource or outsource ATMs is an impactful one on any financial institution, as it requires consideration for your employees’ bandwidth, numerous kinds of costs, and your available technological framework. “Insourcing” means purchasing your own ATM or ITM machines, installing them, and maintaining them. This requires a time investment and level of technical expertise that can be leveraged across your fleet, and in other areas of your business. “Outsourcing” means that your ATM machines are either purchased or leased, and all needs following are handled by external suppliers, including installation, maintenance and processing.

A First Annapolis Consulting in-depth review says, “[…] the decision to keep ATM processing in-house or outsource is not simple. Managers of [banks and] credit unions need to carefully evaluate many complex issues. A structured analysis of ATM processing options will carefully examine the financial, operational, and strategic issues involved with outsourcing to make the proper decision.”

In an earlier blog post, Wittenbach linked the insourcing vs. outsourcing debate to the choice of purchasing a traditional ATM vs. an ITM, or “integrated teller machine” with sophisticated remote teller capabilities. As a trusted partner of the industry-leading ATM and ITM manufacturer Hyosung, we’ll build upon that discussion by highlighting the benefits of insourcing and keeping a hand on the reins of your fleet.

Pros of Insourcing (Rather than Outsourcing) Your ATMs

Reasons to Insource Your ATMs or ITMs

  • Building strength in IT: If you insource your ATM and ITM fleet, it is a great way to bolster the self-reliance of your internal IT team. Since maintaining your ATM machines entails both hardware and software components, they will become intimately familiar with your machines and configuration. This knowledge and capability is especially important if your branch is in the process of digital transformation, as your IT team will need to be the champions of your institution’s technical infrastructure.
  • Efficiency: Uptime is defined as “…a computer industry term for the time during which a computer or IT system is operational. Uptime can also be a metric that represents the percentage of time that hardware, a computer network, or a device is successfully operational.” Uptime is the most important factor in keeping your ATM and ITM machines running and profitable. Remember that traffic to your ATM is not a steady stream throughout the day, but rather it ebbs and flows at peak times.

    Since you cannot predict when a hardware or software malfunction will arise, outsourcing means that you would rely on the support team of a third party company, who will take time to process a service call and travel to your location. This additional time is precious to the functionality of your ATM machines, especially during those peak hours of operation. If your financial institution chooses to insource your ATMs, your team can get right to work on resolving the issue and promptly resuming the transactional flow.

    There is also an efficiency component for cash-in-transit, or armored car services. When your institution manages your own cash forecasting, you’ll know with accuracy when your ATMs and ITMs will need to be replenished, thus optimizing the frequency at which this replenishment occurs.
  • Containing costs: Insourcing your ATM and ITM machines also brings numerous opportunities to contain operational costs. Your branch will save money not only during the installation process, but also on maintenance services and ongoing processing costs. Most often, working with third parties, the above actions aren’t handled by a one-stop shop, but rather by three separate outside vendors. When you instead choose to consolidate and insource, you retain control over these actions and can leverage economies of scale across branches and geographies, depending upon how widespread your ATM network is. Insourcing also implies that your financial institution keeps all ATM fees, instead of handing over part or all of these to an outside vendor. This also means that unnecessary surcharges are not passed along to your branch’s clients.

    A Harvard Business School study focused on insourcing vs. outsourcing IT investments in the banking industry says, “…for banks [and credit unions] that have essentially outsourced the product itself […] the costs can be high. […] In addition, banks with a greater level of operational outsourcing (software, network, and payment system) tend to have higher numbers of transaction errors and greater difficulty in their resolution.

Pros of Insourcing (Rather than Outsourcing) Your ATMs

  • Upgrade at your own speed: Insourcing your ATM fleet means that you can choose the pace at which you update your machines. It becomes your choice when to upgrade costly hardware components of your ATMs, instead of being at the mercy of a third-party vendor’s timeline and pricing markups. Insourcing also affords you the capability to upgrade software at your own pace; you can more precisely time it with other internal innovation at your branch, for the purposes of synchronized employee training and seamless transformation.

Lastly, insourcing means that you can install security patches for your ATMs and ITMs as soon as they are released; you no longer need to wait on a service call to fix any potential security issues that arise. First Annapolis Consulting contends that insourcing supports data security and disaster recovery risks: “Disaster recovery is an important component of any ATM network to insure the continuity of business in the event of catastrophic loss. A single credit union could face a greater risk of security breach due to less immediate security updates.”


Third-party servicers may tout the benefits of outsourcing your ATMs and ITMs in an effort win your financial institution’s business. However, Wittenbach’s seasoned experts—backed by industry research—stand firmly on the notion that your branch can be empowered, independent, and tech-savvy when you choose to maintain control and insource your ATM fleet. Contact us anytime to learn more about insourcing, digital transformation, and other opportunities to help your branch run seamlessly.