Diebold targets ATM market with outsourcing solution

Courtesy: http://www.mbtmag.com/

US self-service and security provider Diebold is targeting the Chilean market with an ATM outsourcing solution that many banks in several other South American countries are already using, Diebold's South America sales VP and general manager Juan José Sánchez told BNamericas.

For several years, Diebold did not have a strong focus on Chile, but that changed in 2006 when it acquired local security firm Bitelco to tap into the Chilean security market. Now, the next phase of Diebold's expansion in Chile has begun, with a focus on outsourcing, ATMs and other self-service terminals.

The Chilean ATM market has seen strong growth over the last several years. Between 2002 and 2007, the number of ATMs in country jumped 72% to 6,306, according to UK-based research and consulting firm Retail Banking Research (RBR). The growth outlook for ATM players is also positive, as RBR expects Chile to have around 8,500 ATMs by the end of 2013.

Sánchez said he recently visited Chile, where he met with several banks' executives that showed real interest in the outsourcing solution.

"This year we want to shake up the market, and next year start to grow quickly in Chile," said Sánchez.

The executive also said he believes that Chile could become one of Diebold's fastest-growing markets in South America within a few years.

According to Sánchez, ATM outsourcing is attractive for banks because it allows them to focus on their core banking business and also permits them to take an asset off their balance sheet and free up more capital for lending.

The outsourcing solution sees Diebold providing the ATMs and taking over all of the bank's ATM-related services, and usually charges the bank on a per-transaction basis.

In other South American countries, Diebold operates ATMs through the outsourcing model on behalf of many banks in Brazil, Colombia, Ecuador and Venezuela.

In Chile, Diebold already has sold approximately 600 banking correspondent terminals to a local payment service chain. The provider could not divulge the client's name for contractual reasons.

Ohio-based Diebold is one of largest ATM and self-service solutions providers worldwide, with operations in some 90 countries. In 2008, the company posted $39US.5mn in net income.