We caught up with David Dove, President, ATM Managed Services, to get his take on the ATM market and how NoteMachine and BankHive fit in to the future of ATMs for financial institutions.
Hi David, nice to talk to you. Tell us about Brink’s and its history in the ATM market.
Brink’s was founded in 1859, and for the majority of those 164 years, it has been focused on the secure transportation and secure storage of valuables – and that includes cash for banks around the world.
As the company grew, Brink’s expanded into the ATM business. Historically, this involved filling ATM machines located on high streets or in bank branches with cash, and carrying out what is known as first-level maintenance, such as bill jams and restocking paper for receipts.
Can you explain a bit about your role at Brink’s?
I’m responsible for leading and growing Brink’s global ATM managed services business.
A few years ago, the Brink’s business in France won a contract to outsource all the ATMs for Groupe BPCE, a very large group of banks in France with a little more than 10,000 ATMs, both in branch and off-branch locations. This event was the start of a concentrated focus on ATM managed services for Brink’s.
In April 2021, Brink’s acquired PAI (Payment Alliance International), which was at the time the largest privately held ATM business in the U.S. PAI owned or operated 100,000 ATMs. To give a sense of perspective, that is about 20% of the U.S. ATM market. I was CEO of that business at the time of the acquisition, and subsequently asked to build the global ATM business for Brink’s.
At the time Brink’s was migrating the BPCE portfolio, it also managed about 450 ATMs in Ireland that were formerly part of the Allied Irish Bank. Today, Brink’s is fully operational in France with all 10,500 ATMs outsourced and about 200 more in Ireland (now 650).
The US portfolio of ATMs has also grown by 10% in less than two years and the count now stands at 110,000 ATMs.
So, what is the contextual background around NoteMachine and why did Brink’s acquire them?
Brink’s acquired NoteMachine in October 2022, seeing an opportunity to focus on the financial institution community for ATM outsourcing in the UK. Brink’s now has access to NoteMachine’s deep intellectual capital and full-stack infrastructure. NoteMachine has a core processing engine with five large cash depots nationwide and more than 100 engineers available to maintain ATMs, which is key to good service delivery.
We are seeking to not only use NoteMachine’s infrastructure across the UK, but also throughout Europe.
What’s your take on the closing of bank branches?
Bank branch closure has mainly been driven by cost. Branches were historically transactional, as a point of service where people could withdraw and deposit cash and cheques, make transfers between accounts, etc.
Over the past 50 years, most of the transactions have moved out of the branch to ATMs and other digital points of service, and banks now look at branches more as locations where they can acquire new customers, sell additional products and provide more in-depth services to customers.
In combination with this, the competitive landscape has changed – traditional banks are now competing not only with others of the same type, but also digital banks that have no branches at all, and consequently avoid the cost associated with this real estate heavy channel. The recent pandemic provided even more motivation for banks to reduce their investment in branch structures.
Mind you, the requirement for bank branches still exists, but it all comes down to cost. Banks have many other, less expensive ways to reach customers these days.
How have you seen ‘access to cash’ requirements evolve in the last few years?
On a relative basis, the use of cash varies from economy to economy. By and large, especially in developed economies like the UK and US, the percentage of purchases in cash in stores has declined due to the growing use of cards. That said, the presence of cash in most economies has continued to grow, particularly in difficult economic times when people use cash as a budgeting tool… if you have no cash in your wallet, you can’t spend it.
In every market, there is a segment of the population who depends on cash as their preferred store of value and payment type. In markets like the UK and US, this is about 15 to 20% of the population. Of course, the other 80% use cash at varying levels and for different purchases (typically under £20), they just don’t depend on it like this 20% group.
In other markets around the world, the size of the cash economy is much higher. For example, in several Latin American and Asian markets, cash is the dominant store of value and payment type.
How important is BankHive to the growth of NoteMachine?
BankHive hubs, whether operating on behalf of one or several banks, are a very attractive low-cost alternative to traditional bank branches.
The demand for banking hubs will increase as more bank branches close, and that need is not just unique to the UK; this is happening in many other countries around the globe. As a result, BankHive is key to the long-term growth of NoteMachine, and in turn, Brink’s. It’s just getting started. We have two new BankHive hubs going live in February and, after launching in the UK, our intention is to take this proposition to other markets in Europe later this year.
What are the main objectives for BankHive in the next 6-12 months?
It’s vital that we maintain and increase traction in the UK with this solution. The demand is there, and we need to demonstrate the value of BankHive outside of the UK to other markets.
Many thanks for your time, David. Exciting times ahead for NoteMachine and BankHive! We look forward to catching up with you again later in the year, and hearing about the undoubted growth and development of NoteMachine and BankHive.
David Dove is President, ATM Managed Services (AMS) of Brink’s, responsible for growing Brink’s global AMS business. Prior to joining Brink’s in 2021, David was CEO of PAI, Inc., the largest privately held provider of ATM services in the U.S. He is a seasoned executive, with experience including serving as President, North American Business Group, Cardtronics. David holds Aeronautics & Astronautics engineering degrees from North Carolina State University and Massachusetts Institute of Technology, and an M.B.A. from Questrom School of Business, Boston University.