ExpressNet outsources ATM operation to BancNet

Automated teller machine (ATM) operator ExpressNet will outsource its automated teller machine (ATM) operations to rival BancNet starting the last quarter of 2008.

The pioneeringExpressNet is run by the Bank of the Philippine Islands (BPI) while BancNet is one of only two ATM networks in the country owned by a consortium of banks.

ExpressNet chairman Aurelio R. Montinola III said the move is in line with BPI’s outsourcing of operations or services, thus allowing the bank to concentrate on its core banking activities. “We had to review ATM operations domestically and overseas before coming to that decision.”

He said the outscourcing scheme will merely involve a technical change since the three networks — express Net, BancNet and Megalink — are already interconnected.

“In fact, the Filipino banking public will benefit from two ATM switches for three networks, simplifying backroom operations and other activities related to running an ATM switch,” Montinola, who is also BPI president, said.

ExpressNet has been running for 18 years, initially servicing BPI and BPI Family Savings Bank, but later expanding with the Land Bank of the Philippines, Hongkong and Shanghai Banking Corp. (HSBC), HSBC Savings Bank and Banco de Oro Unibank Inc.

Outsourcing is a principal option for banks and non-banking financial institutions to allow it to focus on core banking activities. Banking has become so complex that it has become necessary to outsource related activities, such as ATM networks and business process outsourcing (BPO).

In the business of ATM networking, operators are now serving not only banks but also non-banks to allow easier access to cash. Banks have onsite (within the bank premise) and offsite ATMs (more often located in shopping malls). Thrift and rural banks have likewise joined the ATM bandwagon.

The trend evolving today are ATMs located in the workplaces, schools, malls, convenience stores, restaurants and bars, gasoline stations, air and seaports, and hospitals.

Two non-bank institutions are already offering ATM services. ENCASH Network Services (ENS), a member of the Megalink network, and Nationlink Network, allied with BancNet. Both thrift and rural banks,’ non-banks and other non-financial institutions.