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A New Era of ATM Ownership: Are Banks Losing Control by Moving to ‘As-A-Service’ Models?
Through technology-enabled "as-a-service" (AAS) models, ATMs are being reimagined from legacy pieces of infrastructure into modern, innovative business model. While banks are realizing efficiencies in this new framework, they must remain wary of the risks associated with losing control over their customer touchpoints.
Traditional ATM ownership has become increasingly difficult. Declining cash volumes, smaller budgets and increased regulation have made it harder for banks to justify the operational overhead of internally managing their ATM networks. Simultaneously, customer expectations for availability and holistic cash services have increased, placing additional strain on banks' ability to maintain this non-revenue service.
At the same time, the costs and complexity of ATM operations have increased. Legacy infrastructure is prone to fault and evolving software and compliance obligations require ongoing investment. These operational challenges have created a compelling push toward outsourcing and have facilitated the rise of technology-enabled ‘Aa-a-service’ (AAS) models.
Recently, there has been a stark trend of banks outsourcing their non-core functions to the wider ecosystem. Nowhere is more evident than in ATM networks. Traditional models whereby banks owned and operated their fleets have declined, with their share halving over the last two decades to just 40% of machines.
AAS model adoption is continuing to grow. The ATMaaS market was valued at $6.3 billion in 2024 and is set to increase to $6.9 billion in 2025. By 2033, the market is forecast to expand by a CAGR of 9.31% reaching a total of $14.0 billion.
The transition to AAS models allows banks to reallocate large capex budgets into trimmed opex expenses. With reduced sunk costs, institutions can operate with improved scale and shift focus away to core digital strategies.
However, while the economic rationale is apparent, there isa concerning strategic trade-off. What started as tactical cost saving exercise has evolved and enabled an underlying power shift between the banks and the new operators of their ATMs. This approach may be more suitable for smaller banks rather than larger institutions, but banks should be cautious not to relinquish strategic oversight and operational influence in the pursuit of efficiency gains.
As mentioned in the previous blog post; by outsourcing the physical and technical aspects of the ATM network, banks may also be outsourcing control. Service providers now coordinate much of the daily execution of the cash cycle. While this creates efficiencies, it shifts influence away from the bank and into the hands of third-party vendors, further empowering the supply chain and increasing stickiness. For example, in an AAS model, banks often become reliant on their service provider for technology upgrades.
The transfer of power affects more than operations. It touches customer experience, strategic flexibility and impacts the wider bank objectives. Banks may see previously no cost "on-us" transactions turn into an added expense. Without clear visibility, performance transparency and vendor alignment, banks risk losing control over how their services are delivered.
