American Bank ATM Dilemma

ProHub Comment

This is a structured profitability case requiring candidates to diagnose declining ATM performance through multi-dimensional analysis: revenue per transaction, customer mix, regional performance, and operating costs across different vendor structures. The case tests graph reading, root cause analysis, and the ability to build a detailed financial model with regional granularity.

Estimated Time 15 minutes
Difficulty Medium
Source ROSS
50 / 100

Our client, American Bank, is a national retail bank operating in the US. ATMs have traditionally been a profitable channel, but the bank has started seeing declining operating profits from its ATMs. The CEO has hired your firm to help her analyze the reasons for this decline and solutions to improve usage.

How would you approach this problem?

Clarifying Information

  1. Profits have been declining over the last 5 years
  2. ATMs contribute to 12% of the bank’s revenues.
  3. ATMs operated in the US only
  4. 12000 ATMs – no change in number of ATMs or operating structure in the last 5 years (2013 – 2018)
  5. The bank operates the ATMs itself or through vendors - three operating structures:
    • Bank owned and operated
    • Bank owned and vendor operated
    • Vendor owned and operated (Bank gets commission on transactions)
  6. Up to 5 competitors observed in vicinity of any ATM
  7. Any person (Own bank customers and other bank customers) can use any American Bank ATM