Diebold Inc. on April 26 signed an agreement to manage ATMs owned by Zao Citibank, a subsidiary of Citibank Russia. The management deal follows Zao Citibank’s agreement to lease ATMs from Diebold.

Zao Citibank operates 370 ATMs, mostly in Moscow. The Moscow-based bank also owns two ATMs in Ukraine, where the bank has a commercial but no retail business, Andrei Charniauski, an associate for the Retail Banking Research, a London-based strategic marketing firm, tells PaymentsSource. 

Diebold will provide Citi with ATM-status monitoring, help-desk support, currency management and forecasting, cash handling, software distribution, and other maintenance services. Diebold operates an ATM-monitoring facility in Warsaw, and the North Canton, Ohio-based ATM manufacturer employs workers in Moscow.

Diebold recently began emphasizing integrated, or managed outsourcing, services to counter declining ATM sales. Russian banks are new to the concept of outsourcing their ATM management.

During a conference call with analysts April 27, Thomas W. Swidarski, Diebold’s president and CEO, said integrated services contracts are three to five years, but he did not disclose the length of the Citibank agreement. During the first quarter ended March 31, Diebold booked $20 million in integrated services contracts, mostly with foreign banks, Swidarski said.

“To date, the overwhelming majority of Russian banks have their own service infrastructure as well as domestic collection service,” Aleksey Degtyarev, Diebold self-service director of professional development, told the Russian news outlet C News. “The bank is forced to work with multiple suppliers of equipment, software and communications solutions services.”

However, Diebold’s integrated services offer a single strategic partner to handle all the tasks related to the ATM business. “ATM outsourcing eliminates the need for Zao Citibank to manage its ATMs, which are not strategic to the bank’s operations,” Charniauski says.

Under the agreement with Diebold, Zao Citibank will lease the Opteva 522 cash machine and the full-service Opteva 328 from the ATM maker. Russian consumers may withdraw cash from the ATMs and use them to pay utility and commercial television bills, Diebold says. 

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