Open Systems at ATMs: Beyond The One-Armed Bandit

September 4, 2003


New York, NY, USA September 4, 2003

By 2005, Celent anticipates that 65% of US banks’ ATMs will be converted to Windows, up from 12% at the end of 2003. Between 2003 and 2005, banks will spend US$133 million on Windows and multi-vendor software. However, most banks will not deploy advanced functionalities at their revamped ATMs.

In a new report, " ," Celent examines the trend among US banks to convert their ATMs to open systems.

Having retreated from aggressive off-premise deployments, banks are struggling to generate new revenues and to differentiate themselves on customer service. In this context, there are hopes that open technologies will facilitate the development of new services.

In this report, Celent looks at how quickly banks will adopt open systems, defined as technologies that utilize hardware, software, languages, and protocols which are acknowledged by the industry as being sufficiently well-known and accessible; which vendors will benefit from the trend; and whether banks will seek to leverage open system technologies by providing advanced functionalities.

Based on more than 30 interviews with banks, processors, and technology vendors, the report shows that US banks will rapidly convert to Windows and multi-vendor software in the next 2-3 years. Meanwhile, the move to open systems will have little to do with advanced functionalities, but with basic maintenance needs and economics, and vendors’ pressures. 64% of the banks adopting Windows have no plans to turn on advanced functionalities in the next 18 months.

On the vendors’ side, Celent expects NCR and Diebold to capture more than 80% of multi-vendor software sales, with less than 20% going to other vendors such as Wincor-Nixdorf, Fujitsu, and Phoenix Interactive.

Overall, banks’ conservative approach to advanced functionalities will mean the present distribution of revenues between software and hardware will continue to favor hardware at ATM vendors. "The move to open systems is unlikely to trigger massive demand for new software. In coming years, ATM vendors hoping to resist the commoditization and maturation of the US market by growing software revenues are likely to see those hopes dashed," comments

Gwenn Bézard, Celent Senior Analyst and author of the report.

The 26-page report contains 16 figures and 2 tables.

A is available online.

of Celent Communications' Retail Banking research service can download the report electronically by clicking on the icon to the left.  Non-members should contact for more information.


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Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

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Table of Contents


New York, NY, USA September 4 , 2003

Open Systems at ATMs

Return to report Abstract


  Banks' ATMs 6
  Open Technologies 7
  Operational Drivers 10
  Business Drivers 12
  Windows Adoption 13
  Terminal Software Adoption 16
  Vendor Selection 18
  IT Spending 21

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