Bank plans to add up to 5,000 ATMs in FY15-Business Standard
1st July 2014
State Bank of India on Tuesday said it would add up to 5,000 ATMs in FY15. A Krishna Kumar, deputy managing director at the bank, said the addition to the existing network would help improve the ratio of debit cards to ATMs in the country.
“If we take the debit card population, for every ATM , SBI has about 2,500 cards,” Kumar said. He added that other banks have a ratio of 1,500-1,700 per machine. Due to this, there are long queues at SBI ATMs, and customers go to other banks’ ATMs located nearby to save time, and SBI gets charged for those transactions.
Currently, customers are allowed five free transactions a month at other bank ATMs, but at the backend, the bank pays for every transaction a customer has made at another bank’s ATM.
At the end of FY14, SBI had 43,515 ATMs and it paid an interchange fee of R991 crore to other banks as the number of its customers using other bank ATMs was more than customers of other banks making use of the SBI network.
On charging customers for transacting on other banks’ ATMs, Kumar said that the Indian Banks’ Association (IBA) has written to the Reserve Bank of India seeking clarity on the issue.
“IBA has made a request with the RBI to rationalise the charges, especially in the Metros and urban areas. What we are looking, at least in metro and urban areas, is that there should be no free transactions,” Kumar said.
Meanwhile, on the branch expansion, Kumar said it would add up to 1,000 branches this year. The bank will also focus on scaling up its network of point- of-sales machines, he added.
The ATM – How Banks Can Kill Non-Bank Competition
July 1, 2014 by Jane Genova
The ATM (Automated Teller Machine) has become a central piece of bank strategy. The digital technology to be implemented is and will continue to be just a small part of that. The strategy is to enable banks to compete with non-banks. According to Accenture, that competition can eat one-third of bank revenues by 2020.
Payments represent about one-fourth of bank revenues. Checking and savings are being invaded by the likes of T-Mobile, Google and Wal-Mart. Non-traditional players such as auto insurance companies are providing loans.
One of the most powerful points of leverage banks have to combat the competition is their ubiquitous ATMs around the world. They are the face of banking and if positioned and packaged right they can push back on the cool and novelty of their upstart competitors.
Essentially, the features haven’t changed much since 1969. That’s when Chemical Bank installed the first ATM in New York. Because of such little change, any innovation receives lots of attention. That’s useful for banks. Simultaneously, the ATM can wind up reinforcing the bonds between banking institutions and customers.
The rollout of new tech includes:
Look, Ma, No Card, No PIN, No Buttons
Through the cloud and a smartphone, all the traditional functions can be accessed. In addition, there are other financial transactions possible. A key one is Peer-to-Peer (P2P) transfer of money. The owner of the account can authorize a third-party to get cash through another ATM. There is no writing a check. Diebold installed this kind of ATM at its Federal Credit Union (DFCU).
Single-purpose ATMs
Slow-moving lines have been created by ATMs which allow complex transactions. They include the deposit of multiple checks. The alternate is the ATM for cash only. Some call it the “cash barrel dispenser.” Speed can be increased at some of these ATMs by merely swiping a debit card and providing a thumb print.
Responding to specific customer requirements
Bank of America is among the banks whose ATMs are attached to live tellers at remote call centers. They can provide the withdrawal in ones, fives and tens, not just the standard 20s. Citibank’s ATMs allow busy customers to swing by and open an account.
Tablet ATMs Inside Brick-and-Mortar Branches
Customers can transact routine business fast via the tablet. Then they can sit with banking personnel to discuss a loan or investment.
Motion-sensor ATMs
Customers accustomed to controlling their television or gaming experiences with waves of their hands can now conduct financial transactions the same way.
These are all strategies trying to achieve the same thing. That strategy centers on how technological innovation, can become the platform for attracting, creating and strengthening customer relationships.
A part of that constitutes avoiding the danger of the ATM creating distance between the bank and potential customers. Sure, those will use the gee-whiz all-convenient ATM. There’s the real possibility that some banking customers will never get in touch with a human at the bank to apply for a loan, buy a CD or open a retirement account. At the same time, banks can’t alienate those who don’t have smartphones and want their ATM transaction to keep happening the old-fashioned way. Those could include high net worth Baby Boomers.
On the macro level of a grand strategy, some banks have been making progress in leveraging the ATM as what might be called the “connector.” Chase is among them and seems to be borrowing best practices from Apple retail.
In its branch next to Grand Central Station in Manhattan, Chase provides “ATMs of the future” in a large open space. Customers can do their thing and leave. Or, they can also stop by the kind of sparse version of Apple’s Genius Bar in the facility. Those manning that “desk” are all about service.
So brilliantly has Apple retail developed that service ethos that some customers come to Apple retail to ask a quick question about their iPhone or for a free workshop for a product.
If it turns out that Chase customers do have business to explore they are escorted to another floor. They are the ones who choose to go to the next level in the sales process. Banks who integrate the service value proposition could have a leg up on their more aggressive non-bank competitors.
ATMs, and new ATM technologies are just one outlet for financial institutions to stay and remain important in their customers’ lives.
