Compliance challenges can present business opportunities. For Columbus, Ohio-based Huntington Bancshares ($33 billion in assets), transitioning to a high-speed network in preparation for Triple-DES compliance also allowed the bank to improve the functionality of its ATMs.
Huntington Bancshares' ATM fleet is comprised of approximately 700 machines. While the vast fleet helps to market the bank's brand, a slow dial-up network hindered the units' functionality and reliability.
"We were relying on a dial-up environment to support many of our off-site ATM locations. However, traditional landlines often cannot support simple tasks like downloading data to ATMs," explains Lori Murray, Huntington's senior vice president of the ATM channel and cash position management. "We were burdened with updating units through floppy disks."
The challenge was exacerbated by the anticipated adoption of the Triple-DES data encryption standard, which requires additional bandwidth. [For more on ATMs and ATM security, see "Spotlight," page 36.]
"The network's speed was not at the optimal level, and it provided low performance levels on our ATMs," Murray explains. "Huntington is focused on improving how we interact with our customers. The reduction of wait times for ATM transactions is an important component of that," she adds.
Huntington's goal was to transition to a cost-effective Internet Protocol (IP)-based network that would provide "always-on" connectivity and reliability across its ATM network. "We wanted to build an ATM channel that provides a consistent experience, regardless of which machine a customer visits," Murray says.
Huntington began evaluating technology partners in March 2003. Since customer security and convenience are integral to Huntington's ATM operation, the bank required a solution that would provide data integrity and security with superior connectivity. In June 2004, Huntington signed a multiyear agreement with Transaction Network Services (TNS; Reston, Va.).
TNS' TransXpress Secure managed data network service gives Huntington a virtual private network (VPN) that provides a high-speed, secure path via the Internet to deliver data between the ATM and the host processor residing at corporate headquarters. The solution is fully managed by TNS. Citing security reasons, Murray declines to discuss specifics of the implementation.
Huntington began piloting the network in one location in September 2004. By March 2005, 25 more ATMs were added to the pilot. In May, the bank plans to roll out the VPN to the majority of its off-site ATMs, and it estimates that half of its fleet will be operating on the new platform by December.
"This upgrade is an extension of Huntington becoming Triple-DES-compliant," Murray says. "We wanted an application that was faster than regular dial-up and more flexible to upload and download data to our ATMs."
The implementation also helps Huntington achieve a major business goal. "Service is the core of our business," Murray notes. "Huntington's investments in this technology are directly related to how we are working to better serve our customers."
Institution: Huntington Bancshares (Columbus, Ohio).
Assets: $33 billion.
Business Challenge: Increase network bandwidth in preparation for Triple-DES compliance and to improve service.
Solution: Transaction Network Services' (TNS; Reston, Va.) TransXpress Secure managed data network.