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May 26, 2008 • Issue 08:05:02

Wincor Nixdorf uses ATM muscle

By Tracy Kitten

It's coming out with force, both in terms of manpower and funding. And Germany-based Wincor Nixdorf International expects 2008 to be the year its automated teller machine (ATM) impact is felt in the United States, namely because of the banking sector's expected push toward deposit automation.

"It's a trend we see starting at the top," said Alan Walsh, Vice President of Banking for Wincor Nixdorf USA. "Now the top five banks have their backend systems in place for deposit automation.

They are ready to do massive rollouts, and from there, smaller banks will follow. This is not something that we are just talking about. We have a clear business case for Check 21, and the banks will have to do it sooner or later." Though the adoption of Check 21 technology will likely span at least two years, adoption is gaining speed.

At least that's the way Walsh and others at Wincor Nixdorf see it. And it's a message the company is ready to shout from the mountaintops.

The company hosted its first U.S. headquarters-based executive forum last month in Austin, Texas, drawing customers and business partners from the banking and ISO sectors.

About 100 or so attendees showed up for the event, which Wincor Nixdorf used as a channel for sharing information about its evolving company and its plans for U.S. growth.

Among the company's leadership present were executives from Wincor's base in Germany, as well as the company's President of the Americas, Javier Lopez-Bartolome, and Alan Walsh, Wincor's Vice President of Banking in the States.

Not present, however, was exiting U.S. President and Chief Executive, Brad Waugh, who took the U.S. helm for Wincor Nixdorf nearly two years ago.

Although somewhat vague about the reason for Waugh's departure, Wincor Nixdorf, in an issued release, stated Waugh plans to return to the private sector after successfully leading Wincor Nixdorf's U.S. base through growth and customer expansion.

Lopez-Bartolome will oversee U.S. operations until a successor for Waugh, who is over the next several months being "transitioned" from the company, is named or hired.

"During the last two years Wincor Nixdorf USA has achieved impressive growth, gained a significant market-share improvement, and is strategically position-ed for long-term growth and success," Wincor stated in its release.

"One particularly noteworthy milestone was the successful relocation of our American headquarters to larger office and warehouse facilities in Austin, Texas," Wincor stated. "This relocation was necessary to accommodate our growth and better reflect our company's position of leadership."

With that said, the company did not highlight Waugh's absence during its April forum. In fact, no mention of Waugh was made. Instead, a strong focus was paid to emerging industry trends and the strides Wincor Nixdorf is making to keep up with those trends.

Lopez-Bartolome said the company's growth over the course of the last three years has been significant, leaping from $2.1 million to $3.4 million from fiscal year 2003/2004 to fiscal 2006/2007. The company now has 9,000 employees, 100 of which work from the base in Austin.

Sales in the Americas continue to grow, reflected by the 46 percent net-sales increase Wincor Nixdorf reported for the region for the first half of fiscal year 2007/2008.

The Americas accounted for 9 percent of total net sales for the banking group. Net sales for the second quarter of the year alone were up 39 percent.

Banking remains a big focus, with sales in that business segment up 70 percent over the last three years - 30 percent in the United States alone - thanks in part to large ATM customers Wells Fargo & Co. and JPMorgan Chase & Co., Bartolome said.

Wincor Nixdorf now has deals with both banks for bulk-check-deposit ATM deployments. Over the last two years, the company said it has gone from working with only one of the United States' top 20 financial institutions to having contracts or pilot projects with nine of the top 20.

Now the company is looking to flex its service muscle - a once underdeveloped and atrophied part of Wincor Nixdorf's U.S. operations. It's a move company executives expect to catch the attention of U.S. competitors Diebold Inc. and NCR Corp., if it hasn't grasped their attention already.

"Our service division also has much to be proud of this year, having successfully built from scratch a service organization that now comprises nearly 30 states and is setting new standards for both the banking and retail industries. Our service organization's commitment to growth through innovation is perhaps best exemplified by a newly established partnership with FedEx and its nationwide network of Kinko's locations," according to Wincor's statement.

"With this network in place, once a service need is identified, a Wincor Nixdorf service technician simply contacts the closest FedEx Kinko's location, and the needed part can either be picked up or sent via messenger, greatly minimizing service down time and reducing the amount of time spent on needed repairs." Other areas of attention in the future will likely include multichannel integration and enterprise-software management, Walsh said.

In the short-term, however, Wincor Nixdorf is focused on getting its larger message out. And since just less than half of all U.S. ATMs are capable of using most of the advanced technology Wincor is pushing - with an estimated 30 percent to 40 percent of all U.S. ATMs still running IBM's retired OS/2 computer operating system - the company wants to earn trust first, business second.

"To fully realize the advantages of multichannel integration, to have the ability to experience it, you have to operate in a Windows environment," Walsh said. "We think Check 21 will push more banks to Windows in the U.S., because the business case is real. And then personalization and a whole host of other things will be possible.

"But it will take some time. But banks are starting to realize that these things can give them a competitive edge, and they're finally viewing the ATM as a profit center." end of article

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