Diebold Nixdorf CEO shares insights on banking, self-service

Octavio Marquez

This month, Diebold Nixdorf Inc. named Octavio Marquez, president and CEO, to the additional position of chairman of the board of directors. The board determined that combining the roles of CEO, president and chairman under one leader would strengthen the alignment between ongoing strategic and operational matters, including focus on evaluating strategic opportunities.

During the recent Intersect Las Vegas Fintech Conference in Las Vegas, ATM Marketplace's sister site Kiosk Marketplace interviewed Marquez on what he sees as the challenges and opportunities for self-service technology in both the retail and financial services industries. Marquez mentioned the impact of the labor shortage on retail, the continued importance of cash, software improvements and the emerging importance of video technology.

Following are excerpts from that interview.

Q. What are the most promising retail industry verticals today?

A. We're very strong in fashion, we're very strong in fuel and convenience and we're very strong in groceries, particularly in Europe.

In airports, many of the small stores are using self-checkout, something that was probably not thought of three years ago. We have many of those general merchandise retailers at the airport using self-checkout that all started with cashless devices.

In every vertical, the biggest challenge is access to personnel and cost.

We made a very conscious decision two years ago in our retail business that our focus was going to be on self-checkout. The pandemic happened and kind of accelerated the trends that were already there. A new generation of consumers would be more comfortable interacting with devices than in the traditional checkout.

Q. What are the main challenges of the banking industry today?

A. I think banks will continue to have significant pressure on their cost structures and improving their efficiency ratios. That is clearly one thing that won't go away any time soon. The other thing that is very important is that connecting to your customers and changing the customer experience is paramount. How do I make that customer journey frictionless across the multiple channels that touch the bank?

Moving to an all digital strategy or adding new channels is not replacing the old channels. On one side, you have these constant efficiency cost pressures, but the other side of the house is saying, "How do I make the customer experience better?" What is the right balance between those two things?

Q. What is driving the demand for recyclers today?

A. The first thing to keep in mind is that recycling is not a new technology. We've always had a strong demand in Asia for recyclers. We've had good demand for recyclers in Europe. The U.S. was always lagging behind. There are a couple of things you need to keep in mind.

One, the cost of cash is going up. Anything you can do to minimize that cost is very important. Filling an ATM in the city is probably a $500 to $1,000 event. When you do that several times a month, if you can, through recycling, eliminate 30% of everything, you eliminate one cash run a month. The business case will pay for it in a year or year and a half. The technology creates significant efficiencies.

In the U.S. we have an aging fleet of ATMs. How can I replace this with something that will change the customer experience initially … (while being) much more modular, much more modern-looking than a traditional ATM? They're also thinking, 'How can I protect my investment?' — because this investment needs to last for the next seven to 10 years. If I can buy a machine that is future-proof because it has recycling and it has the capability of being modular … that's resonating very well with bankers.

Q. What innovations will Diebold Nixdorf release in the next year?

A. Think about the global opportunity that exists. Our recycling machines are shrinking in size. Our recyclers can deposit five notes at a time. I think that is something we will start seeing a lot of innovation around. I think we will make that out-of-the-branch experience with batch tubes a more efficient process.

You will also see a lot of innovation around software. Clearly both in retail and banking, security is one of the biggest concerns. You will see us continue investing to make the most secure devices. Those are core technologies that will be key for the future.

Q. How are you dealing with labor challenges?

A. We need to use technology to overcome some of those challenges. We've built very smart edge devices that produce data. My pool of candidates to be an ATM technician has increased exponentially.

Before I had to train somebody to diagnose the card reader and the motor of the recycler and all these things, and then figure out what's wrong with it and repair it. Now through the use of sensors and big data and analytics, I can tell a technician, "Go to that ATM, the problem is this, and it's solved this way." Before, I needed to spend months training a technician to be proficient in servicing a device; now, I give him a small introduction of where everything is, and then whenever he shows up he has on his phone all the instructions. He can just go in and change parts and fix the device at a faster pace.

On the software side, one of the things that we worked very hard on is: we don't want to write new code for customers. We want to make sure we can just customize. You'll see that our new software is very parameter-driven, so whatever you want to do is just changing parameters and not creating code and making it more open to APIs.

So I think that those things will help us overcome all the labor shortages and that will continue into the future.

Q. How concerned are you about the state of the U.S. economy?

A. I think the U.S. economy is the strongest economy in the world. I think we underestimate the power of the U.S. economy. While I'm concerned about the state of the economy globally, I see that we (Diebold Nixdorf) have a resilient model right now and that our solutions will continue to resonate.

Q. What technologies do you see as most promising for the future?

A. There's clearly an increase in the compute power of our devices. Video in the self-checkout for security reasons, for ID purposes. What's the most annoying thing that happens when you self-checkout? When I scan the beer or the wine, the process has to stop because they have to come and check that I'm 21 years old.

We're integrating video and facial recognition to really avoid that friction in the process. In banking, there is video teller that looks very promising.

I think that video is a very promising technology in both our retail and our banking.

Q. What are your growth expectations going forward?

A. We will see growth of 2% to 3% a year. 2022 was a very tricky year for us. We divested our assets in Russia and Ukraine — that were close to $100 million (in value) — as we had to close our operations in both of those countries. Half of our business is the Americas, 40% is Europe and 10% is Asia.

Photo provided by Diebold Nixdorf Inc.