Germany’s banking sector has long been admired for its efficiency and strong management, but according to Tieto, that reputation conceals a growing problem. Beneath the surface of the country’s diverse commercial banking landscape lies considerable operational complexity, and tightening local and EU regulation is now exposing it and driving costs higher.
Tieto points to the EU’s Digital Operational Resilience Act (DORA) as a clear illustration of the pressure facing German lenders. In force since January 2025, DORA was designed to bring regulations together under a single legal framework, reduce IT risks posed by firms inside the EU and their suppliers beyond it, and introduce third-party oversight for systemically important financial institutions.
Few in the industry dispute these aims. However, Tieto notes that the act has sharpened the focus on digital resilience and third-party risk just as the cost of delivering cash services is climbing. At the same time, demand is falling. Bundesbank figures from July 2026 show that cash usage in Germany, although still high by European standards, has dropped by more than 25% since 2019.
This combination leaves banks needing to reduce cost and complexity without compromising resilience. Outsourcing can lower the cost of running ATM networks, Tieto argues, but spreading that work across multiple vendors does not automatically make operations cheaper or simpler. With regulatory scrutiny intensifying, a bank’s ability to prove systemic resilience and compliance has become just as important as cutting expenses and workload. Banks that overlook the regulatory paperwork involved in outsourcing may find the added costs erode the financial case altogether.
Tieto’s recommendation is consolidation. Rather than juggling several providers, banks should consider streamlining their fragmented arrangements. Based on its experience, Tieto says working with fewer providers, or just one, can lower compliance costs and administrative burden while helping banks gradually upgrade their software platforms, ATM terminals and software. Banks also gain access to a partner’s specialist team and current expertise.
The company adds that a single-partner model simplifies vendor management and can deliver more predictable pricing, while still giving banks flexibility across the broader ATM value chain.
Tieto Banktech supports a broad base of ATM customers across Europe, which it says allows it to take a proactive approach to compliance by anticipating regulatory change rather than reacting to it. Its scale also means compliance costs can be spread across larger fleets of ATM terminals, keeping them structurally lower for partner banks. Through MICOS, its proprietary client interface software, Tieto provides full, real-time visibility of ATM network performance, helping clients cut operational complexity.
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