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Out sources of atm

  1. 1. Executive Summery ATM means Automated Teller Machine. Most historians agree that Barclay’s in the London was the first to deploy an ATM in 1967. It wasn’t until the mid to late 1980s that ATMs gained wide acceptance. Automated teller machine is those machines, which are used within, or outside the bank premises for cash payment and other transaction related services without intervention of human bring. ATM have progressed from being merely cash dispensers to provide facilities for deposit balance & reporting & inter account transaction The structure of ATM as follow (1) Processor (2) Consumer interface panel (3) card reader (4) Printer (5) dispenser (6) Depositor There are over 1.2 million ATMs installed worldwide. Approximately every 5 minutes a new ATM is installed. The ATM is one of the most important technological inventions of the second half of the twentieth century, helping to crate the 24 X 7 all hours’ access to their own-banked cash near to where they live, work and shop. According to recent data from the Dove Consulting on ATM terminal deployment, financial institutions lose an average of $ 242 per month on each of their off-premise ATMs. In fact, between 2001 and 2003, revenues generated by off –premise ATMs fell by 11%. This report demonstrates the popularity the Full services outsource model has gained among small to mid- size bank deployers. According to the report, 7% of large banks and 13% of other banks use service model while 13% of large credit unions and 18% of other credit union employ this method as well. Despite the challenges ATM management poses to banks and credit unions, ATM networks are proven to help attract new customers and promote self-service banking and convenience. If you should ever be forced by a robber to withdraw money from an ATM machine, you can notify the police by entering Pin # in reverse. 1
  2. 2. Cash machine crime has risen despite leading banks investing millions of pounds in anti-skimming technology. Reserve Bank Of India’s Guideline for issue of ATM- cum-Debit Cards by UCBs. Banks which are authorized to install on-site / off- site ATMs, as per the policy in force, may introduce ATM-cum- Debit cards with the approval of their Board keeping in view the guidelines as given in Annex I. A report on the operations of these cards issued by banks should be forwarded to the RBI, Department of payment and Settlement System (DPSS) with a copy to the Regional office concerned of RBI on a half yearly basis, say at the end of March & September every year, incorporating information as indicated in Annex II. Benefits of Biometric supported ATMs Provide strong authentication. Hidden costs of ATM card management like card personalization, delivery, management, re – issuance, PIN generation, help-desk, and re- issuance can be avoided. Ideal for Indian rural masses. 2
  3. 3. Introduction of ATM The growth of technology has changed the payment System world over during the past two decades. More and more innovations are being introduced in both cash payment system and non-cash payment systems. Cash in the form of notes and coin was the principal method of payment system before the introduction of ‘Banking’ paper instruments such as ‘Cheques’ and ‘cash Transfer’ now have become a part of the payment system with the popularity of banking. Electronic devices are making the job of cash payment as well as non-cash payments easy and efficient. ATM mean Automated teller machine, which is used within or outside the bank premises for cash payments and other transaction, related services without intervention of human being. ATM is installed in different forms as wall unit, window unit or lobby unit depending upon the location and the need of target customers. The introduction of Automated teller Machine and plastic card has given the banking customers the facility of round the clock banking. In this Unit, we will discuss about the various types of teller machines prevalent in the banking industry and how they are instrumental in replacing our traditional payment systems. Some ATMs allow withdrawal funded by clerical staff in retail merchant location. The clerical staff are not considered bank teller. Many ATMs also allow people to deposit cash or cheques, transfer money between their bank accounts, top up their mobile phones’ pre-paid accounts or even buy postage stamps 3
  4. 4. History of ATM The history of the ATM often is open for debate, since the cash dispenser's development occurred long before the machine was put into use. Most historians agree that Barclay's in the London was the first to deploy an ATM in 1967. It wasn't until the mid to late 1980s that ATMs gained wide acceptance. After MasterCard and Visa lifted their surcharge ban in 1996, the off-premises market in the United States exploded. The United States now has the largest ATM market, with somewhere between 420,000 and 450,000 ATMs, in the world. Today, worldwide ATM deployment is estimated to be 1.5 million. Teller machine are those machine, which are used within, or outside the bank premises for cash payment and other transaction related services without intervention of human being. Basically there are two type of teller machine (1) Automatic Teller Machines (ATMs) and (2) Bank Teller Machine (BTMs) 1) Automated Teller Machines (ATMs) Significant advantage can be availed from computerizing day- to- day banking operations originate to the cash counter in the banks. Before considering the aspects of computerizing these operations, we should look at what operations are performed at these counters. 4
  5. 5. Start Stop Stop Stop HOW DO THE ATM WORKS: Chq.wdl Presented for Payment No Return the Cheque./Wdl. Is Customer Has Account With Bank? Return the Yes No Cheque./Wdl. Is Sufficient Bal. Available To pass chq? Return the No Cheque./Wdl. Is Signature O.K.? Debit the A/c. And update the Pass book Count Out Cash 5
  6. 6. Pass the Cash & Passbook to Customer Update branch A/c and Cash Balance Stop Flow chart 1: Manual payment system at Teller counter Step in withdrawing money Let’s see what typically happens when a customer wishes to withdraw money from the bank. Assuming the customer has a savings account with the bank with bearer cheque facility, the customer has two option to withdraw money: with a cheque payable to self or use a withdrawal slip along with the passbook. The following operations have to be performed after presentation of cheque / withdrawal slip by the customer at the counter for withdrawal of cash. 1) To check whether the customer has an account with the bank. 2) To check whether sufficient balance are available in the account to permit withdrawal of the amount requested by the customer. 3) To verify the customer’s signature with the specimen signature stored with the bank. 4) To update the customer account with the bank and also passbook by reducing the closing balance. 5) To count out the cash. 6) To pass the cash to the customer. 7) To update the branch account to show simultaneous decrease in customer deposits and in cash balance. 6
  7. 7. From the customer point of view, the above process is cumbersome to the extent that he can obtain cash only during banking hours. Also, since the actual process takes some time to complete the formalities, he may have to wait in a queue. From the bank’s point of view, when the process is done without any computerization, a considerable number of man-hours are required to complete the process. In fact the significant part of the time of banking personnel is spent in the activity of counting of cash, verifying the signature, updating the ledger and passbook etc. These are the reason why electronic payment systems have been adopted. The growth of technology has changed the payment systems world over during past decades. The introduction of Automatic Teller machines has given facility to the bank customers for banking beyond the banking hours. An ATM is a device located on or off the bank’s premises to receive and dispense cash round the clock. Customers can also use ATMs for depositing cash, cheques, obtaining balance, obtaining statement of last few transactions in his account, requesting cheque books, payment of card bills and for transferring funds from one account to another. The customer is issued a plastic card in this mane. This card is magnetically coded, so that the ATM can identify the customer. When the customer wants to use the ATM, he inserts the the card into the slot at the ATM window. Once the card is recognized, the video terminal of the ATM displays the message “Type your identification number”. This is a unique Personal Identification (PIN) which is provided to him at the time of opening the account and is normally known only to him. This number ensure against other withdrawing through stolen cards. The customers type this number on the keyboard at the ATM window. The computer checks this number and establishes the authenticity of the customer. The ATM then displays the message “enter the transaction or the amount to be withdrawn”. When the customer gives the instructions through the keyboard the VDU displays “your transaction is being processed. Please wait”. If cash is to 7
  8. 8. be withdrawn and there is sufficient balance, the cash output slot pushes out the amount and also a printed statement of the transaction, and even the present balance in certain cases. It the customer want to deposit cash or cheques etc, the ATM releases the cover for this purpose. Other transactions are also put through in a similar manner. At the end of the transaction the ATM cover closes and the machine ejects the customer’s card. There are two types of ATMs: 1} Exterior ATMs and 2} Interior ATMs. Exterior ATMs are located in various places like shopping centers, airports, railway stations with or without drive in facility, while the interior ATMs are located within the bank premises. ATMs that are directly interactive with the Bank’s computer are known as on-line ATMs and the others are known as off-line ATMs. On-line ATMs require the support of effective telecommunication facility. In some foreign Bank’s ATMs the conversion of currency is also possible. Interactive and voice recognizer ATMs are also installed to facilitate the customers to interface in multi-language. 8
  9. 9. The structure of ATMs The following modules are the part of any standard ATM. 9
  10. 10. 1. Processor 2. Consumer Interface Panel 3. Card Reader 4. Printers 10
  11. 11. 5. Dispenser 6. Depositor. 1. Processor The processor is the main brain behind an ATM. All the necessary interfaces with the various ATM modules are handled b the processor. It receives commands through the Consumer interface Panel (CIP) and decides on further actionprocessing. If the ATM is in off-line mode, the processor will authorize the transaction based on the balance available on the card, while if it is on-line mode, the authorization will be based on the validation check carried out by ATM by interacting with the central computer. 2. Consumer Interface Panel Consumer interface panel consists of set of devices provided to the user/consumer of ATM service. It consists of (A) key pad, (b) display, (c) recess for card, (d) printing unit and (e) envelopes. The CIP guides the consumer through the transaction and allows the consumer to enter the data. The display unit is a high resolution monitor which displays messages/ pictures. The display is visible only for the consumer and not to the person nearby. Consumer keypad is recessed for privacy and it has 10 numeric keys and a cancel key. 3. Card Reader Motorised card reader is provided on the ATMs. The magnetic track on the cards, as soon as inserted by the consumer, is read by the card reader. The consumer can take back the card after completing the transactions. There is a retained card bin provided inside the ATM, where the retain cards and the cards left behind by the consumer by mistake are deposited. 4. Printers There are two printers provided in the ATMs. One printer is for the consumer and the other one is journal printer. Both are not visible to the consumer. After the transaction is over, the purpose 11
  12. 12. and consumer picks it up. The journal printer provides an audit trail of all completed transactions. The transaction data is also available in electronic media. 5.Dispenser The currency notes are stored in cassettes in the Dispenser. The dispenser picks the currency and delivers the same to the consumer through slot provided in the front panel. The currency dispenser’s uses either friction pick or vacuum pick technology depending upon the technology available with the ATM. 6). Depositor The depositor accepts envelopes with cash or other documents and provides security for deposited material. The deposit is made through a separate slot provided for the purpose and the consumer through the keypad enters the details of deposit. ATM provides the envelopes meant for the deposits with the envelope dispenser. Alternative uses of ATM 12
  13. 13. ATM Project The Bank’s ATM network includes 5479 ATMs in India, which is the largest ATM network in the country. The Bank continues to expand this network rapidly. Customers can transact free of cost at the ATMs of the State Bank Group. The agreement with VISA and Master Card International for acquiring ATM transactions has resulted in another revenue generation stream. Debit Card Population The card base of State Bank Group has grown from 7.77m in September 04 to 12.43m in March 05 and 16.32m in September 05. Out of total card base State Bank of India has major share of 12.89m cards and remaining 3.43m cards of Associate Banks. State Bank Debit Card with affiliation to Master Card is the largest Maestro debit card issued by any Bank in South Asia. Card Usage With our bilateral sharing arrangement with UTI Bank, HDFC Bank, Indian Bank, Andhra Bank, Punjab National Bank and Corporation Bank, our customers have access to the largest reach and convenience of “Anywhere – Anytime” banking at over 10,200 ATMs.While access to State Bank ATMs is free, nominal charges are applicable on the use of other banks ATMs. Recently, UCO Bank Canara Bank and IndusInd Bank have signed MOU for bilateral sharing arrangements with State Bank ATM Net Work. State Bank ATM cum Debit cards are also acceptable at more than 1,23,000 Points of Sale / Merchant Establishments, which display Maestro logo. The Bank is making rapid progress in migrating customers from teller counters. The average hit rate has increased from 189 in March 2005 to 212 in September 2005. 13
  14. 14. Roll out of ATM Prototype Rollout of ATM Prototype is an initiative launched in this direction, where cards are personalized for all eligible customers and delivered to them during their visit to branch.To help them in acquainting themselves with the ATM usage dedicated support from ATM Dost is provided.ATM Dost is marketing representative of our Bank, selected from the branch staff who acts as friend and guide to customers in delivery of cards and educates them about its usage and advantages.The ATM usage has been increasing continuously and average of 1 mn txns happen every day on our network. During the first half year of current financial year 2005-06, Prototype has been rolled out to new 514 branches in 11 Circles. Another 500 branches will be rolling out prototype by next quarter 2005. International Debit Card The Card population of International Debit Card as on March 05 was 13470. The number has increased to 16451 as on September 2005. 24 x 7 Support through Call Center Effective from 15th August 2005, Call Center operations have been shifted to M-phases and are functional from Bangalore.Call Center is now accessible from anywhere in the country. Facility is extended to Associate Banks customers also.Call Center is being upgraded to Customer Care Center with added services like Hot Listing of cards, request for re-generation of pins and complaint redressal machinery. Before You Use an ATM 14
  15. 15. While ATM's have added some convenience to our lives, a few risks have also popped up. ATM's give criminals another opportunity to get at your money, and you should take steps to reduce your risk. Most of us can stay out of trouble with simple common sense, but you should periodically review some proven tactics. Follow these seven steps, and you'll improve your odds against the scamsters. Look Around Before You Approach Take a quick look at your surroundings. See if anybody or anything looks suspicious. Is anybody watching you or standing too close? Use ATM's That You're Familiar With If you know an area well and have used an ATM before, you can expect similar results. In other words, your chances of getting robbed at a 'familiar' ATM are less than your chances of getting robbed at a 'new' ATM. There are a variety of reasons for this, but the point is that your odds are a lot better with a trusted source. Look Over the Machine Before Inserting Your Card If you see something that looks unfamiliar on the machine, it could be part of an ATM scam. (External readers) and hidden cameras can be used to compromise a bank account. Bottom line: if it looks funny, look for another ATM. Lock Your Doors and Secure Windows at Automobile ATM's We've all heard the stories about carjacking. Think how much more attractive you are as a target with cash-in-hand. When your car is stopped and you're picking up cash, just take the half- second required to lock the doors and keep crooks out. 15
  16. 16. Have Your Card Ready While Approaching the ATM If you're quick, your chances are better. On the other hand, you're exposing yourself unnecessarily if you stand around the ATM digging through your wallet or purse for that special card. Get it out before you leave your car or as you're approaching the ATM and get your transaction started as soon as possible. Use ATM's that are Well Lit and Safe Have you ever had to swipe your ATM (or Credit/Debit) card to get into an ATM booth after hours? One of the reasons is that only somebody with a valid card can get through the door. This makes it less likely that and undesirable’ will approach you just as your cash is coming out. Obviously this is not foolproof -- a crook can steal somebody's card and use it immediately. Get Cash Out of Sight This is pretty obvious, but some people need to be more conscious. After you get your cash, get it out of sight. Whether it's a lot of money or a little, cash can be tempting when it's out in the open. 16
  17. 17. Fraud of ATM Cash machine fraud up, say banks Cash machine crime has risen despite leading banks investing millions of pounds in anti- skimming technology. The banking industry says new figures, to be published next week, will show ATM fraud is on the increase. One in four ATMs have now been fitted with anti-skimming equipment Criminals - many from organised gangs - stole £65m last year, by using skimming devices that read information from the magnetic strip on the back of a card. Deputy Information Commissioner David Smith said banks should be doing more to protect customer information. Mr Smith added: "Banks really do need to concentrate their attention on customer security - it's about protecting information and the problems that customers can face if their information gets into the wrong hands. "It's not just about protecting the bottom line, the profits of the banking industry." Although only one in four machines has been fitted with the new anti-skimming equipment so far, the banking industry said it will have a "dramatic effect on reducing cash machine fraud". The industry also said it had witnessed an increase in cash point crime because the new chip-and-pin system has made it harder for fraudsters to use stolen or cloned cards in shops. Chip-and-pin cards aim to cut fraud by including a smart chip, which can store more information than the usual magnetic strips, and also by having users verify transactions by keying in a pin number rather than signing a receipt. Miniature cameras, which can record pin numbers, are also among the devices 17
  18. 18. used by fraudsters to steal cash from ATMS. Over the past two years card issuers have been busy replacing all credit and debit cards in the UK. Sandra Quinn, from the Association of Payment and Clearing Services (APACS) which represents the companies which handle payments, said: "As you cut off one route for fraudsters they exploit another. "So as we made sure that all shops had chip-and-pin equipment, fraudsters weren't able to use counterfeit cards there, so they doubled their efforts at cash machines. 18
  19. 19. ATM Security Information PIN NUMBER REVERSAL If you should ever be forced by a robber to withdraw money from an ATM machine, you can notify the police by entering your Pin # in reverse. For example if your pin number is 1234 then you would put in 4321. The ATM recognizes that your pin number is backwards from the ATM card you placed in the machine. The machine will still give you the money you requested, but unknown to the robber; the police will be immediately dispatched to help you. This information was recently broadcasted on TV and it states that it is seldom used because people don't know it exists. Please pass this along to everyone possible. I will post some more trading tips on 13th August. Keep investing money only in Indian Markets... Physical security: ATM is totally impregnable. Currency is stored in cassettes, which can be opened only with special jigs, which are maintained in custody. These cassettes are placed inside the ATM in special steel safe with a combination lock. The safe also has an alarm, which is set-off when there are attempts to make unauthorized entry or when the safe door is forced. The alarm system is an electronic one, which is wired into the central alarm monitoring system. There is also a back – up alarm system in case of power failure. ATM Security Manual “An informed, security-conscious customer is far less likely to be defrauded”. Foreword This manual is designed to ensure optimal levels of customer safety and convenience at ATMs. 19
  20. 20. It is true that law enforcement agencies around the world need the communities they police to play a part in the upholding of law and order. In being more security-conscious, and taking precautions whenever possible, citizens can help prevent crimes from taking place. This is equally true when it comes to ATM usage. Therefore, we would like to appeal to all regular users of ATMs to read this manual and practice its simple guidelines. The Global ATM Security Alliance was formed to assist law enforcement and fraud prevention agencies and to strengthen the industry’s protections against criminal activity. We are proud to present this ATM Security Manual for Customers for your benefit. It includes “The World’s Top Twenty Tips for ATM Use” collected from Australia, New Zealand, United States of America, United Kingdom, Europe, Canada, India and South Africa. ATM Safety Automatic Teller Machines (ATMs) have revolutionized banking allowing customers to do their banking 24 hours a day. They also, however, have been a great help for thieves looking for quick cash. This workshop focuses on some of the things to be aware of when you use your ATM. Memorize Your PIN: Don't write it down on your card, or on a piece of paper you store in your wallet. If your card or wallet were stolen, the thief would have your PIN. Be Ready for Your Transaction: have your card ready, have your code in your head, and fill out any deposit envelopes before you approach the ATM. Take some envelopes with you and complete them at home or in your locked car at your next transactions. 20
  21. 21. Be Aware of Your Surroundings: Look at the area around the ATM; is it well lit? Is it in a remote area, or are there many cars passing by? Are there any cars or people 'hanging out' in the area? Is your gut instinct telling you this is a safe area? Consider using the ATM during daylight hours, when you can see better and others can see you better. If you must use an ATM at night, consider one inside an open business like a grocery store. Protect Your Code: When using the ATM, block other people's view; don't allow others to see your code, what type of transaction you are making, or how much money you are withdrawing. Lines in the Area: If there is a line behind you in the ATM and someone is too close to you, ask them to step back. If they do not step back, you may want to cancel your transaction and either wait in your car, or use the ATM at another time. Quickly Put Away Your Money: Put your money in your wallet and put your wallet away immediately. Count your money when you are safely inside your car or home. Before you leave the ATM, check your surroundings - is anyone around? Also put away your card and receipt. Avoid Large Cash Withdrawals: If you were robbed or lost your wallet, at least you would only lose a smaller amount of cash. Take All of Your Receipts With You: Don't let a potential thief know how much money you have withdrawn or how much you have in the bank. If You are Driving: Park as close as you can to the ATM, and lock your doors. Keep your keys handy so you can enter your car quickly after completing your transaction. Drive-Up ATMs: Assess the surroundings of the ATM - are people 'hanging around' on foot or in vehicles? If it feels unsafe 21
  22. 22. to you, choose another ATM. Keep your doors locked. Keep all windows up except the one you are using. Keep the car running and keep aware of your surroundings. Check Your Account Report: Notify your bank and the police if you notice any suspicious or unauthorized ATM transactions on your monthly statement. If Your Card is Stolen: Immediately contact the police department where you are, and contact the financial institution responsible for the ATM card. Thieves typically have about a four to eight hour window they can use stolen ATM and credit cards since owners don't report them stolen right away. You may not be liable for any items debited from your account if you report it right away. Bring a Friend: A thief is less likely to attempt to rob you if you have someone with you. If You are Followed: Go to an open business and call the police. Provide a description and direction of travel of the person or vehicle following you. 22
  23. 23. Self-Service Banking and ATMs in the 21st Century "This report is clearly authoritative and comprehensive… an excellent summary of current and future thinking." Ian Bain, Executive Director, Atmia Europe (ATM Industry Europe) This report is concerned with all types of self-service equipment or customer-activated terminals, including the automated teller machine (ATM), automated depository, and kiosk. In practice, equipment other than the ATM is still in the minority, and the population figures for ATMs therefore remain the best proxy for an overall assessment of the installed self- service base. Many external factors (including political, economic and social) will determine the rate of growth and nature of the global estate. Industry consensus predicts the further automation of the counter, the development of the kiosk, and videoconferencing, as the self-service developments that will have the greatest impact in the short term. Research undertaken in the compilation of this report would support that viewpoint. The total global estate of ATMs reached 1.142m by the end of 23
  24. 24. 2001 (the latest date at which consolidated market data is available) and is projected to reach a global total of 1.54m by end 2007. Of these, 345,000 were located in the USA, a number that exceeded the machine populations of every other region. For example, outside Japan, the populous and economically dynamic Asia-Pacific region still had fewer than 200,000 machines in operation. Members of the major payment systems organisations, MasterCard and Visa, have access to around 800,000 ATMs globally. (Sources: Retail Banking Research, MasterCard and Visa) This report looks at the development of the industry and gives you a complete guide to the worldwide market and pays particular attention to developments in the USA, Asia-Pacific, Western and Eastern Europe and Africa. 24
  25. 25. How much ATM is in your future? - Information Technology Tom Gill, CEO of FORE Systems, looks out on a different world from one that existed just 18 months ago. "There was a lot of confusion 18 months ago about frame and cells and how to deploy a backbone infrastructure and IP infrastructure for all of your communications needs," he says. Now, network designers have a much clearer idea of what they want to accomplish and how to do that. Gill says there is a shift in large enterprises from the tactical to the strategic use of the corporate network. It is no longer acceptable to plug in a solution and hope it works in an environment that is close to capacity. Instead, enterprises are looking to create an "information utility.” "An information utility is like your electric utility or your water service," he says. "It's always there, like your phone system. The idea is to create that same feel for information systems. It's ready. It's predictable. It's on demand. It's secure." It's also scalable. The typical large company with multiple locations wants to link up its campuses, boost capacity, run applications over the campus backbone, and boost the edge of the network. Furthermore, the company wants that network to be 25
  26. 26. ready for future applications--particularly those that depend on service guarantees. ATM can do that, Gill says. It can also serve to unify widely scattered offices. "The wide area and remote offices can be consolidated into their campus backbone over one infrastructure. It's cost effective, and it makes a lot of sense." Gill is, understandably, an advocate of the values of ATM--its scalability and quality of service guarantees. But he doesn't expect it to go to the desktop. Beyond the wiring closet, Gill favors Ethernet--and FORE has bought several Ethernet companies, including, most recently, Berkeley Networks. The combination of the two has become the most logical way of simplifying the network, he says. "Certainly we agree that frame and Gigabit Ethernet are going to have a role, or we wouldn't have bet our money on Berkeley Networks," he says. "How it's positioned is important. We're not selling religion here. We're painted as an ATM company, but we've been selling Ethernet for several years as an integrated solution into ATM." FORE customer Robin Hinson agrees. Hinson is manager, systems and networks, for Dr Pepper/Seven Up, Inc., in Plano, Texas. Hinson designed and installed an ATM backbone on the campus early last year. "Building a global IT data center, I did not want to be forklifting stuff," he says. He wanted a scalable infrastructure that would serve the company for the next three to four years. Hinson has more than 1,100 users in the data center and external to the building, and he was able to upgrade the data center ahead of the users. "For a period of time I had two different buildings online that were about 25 miles apart with an ATM connection: I was able to move the data center over six months ahead of the user community." When he had to make the decision about the system architecture, Gigabit Ethernet did not have a lot of standards, and ATM did. What appealed to him about ATM was the variety of applications the network handles and its scalability. "Applications are by far the terrific test," he says. Dr Pepper runs SAPR3, Lotus Notes, Oracle, Novell, and Microsoft NT, and is ready for video and voice. ATM goes to the wiring closet, and 26
  27. 27. then it's Ethernet 10/100 to the desktop. With the FORE switches, Hinson says, "Each user has a dedicated PIN 100 port. Where it's cost-effective is that in the user community there are a lot of moves, adds, changes. I'm ready for it. I get immediate return on investment and future return because I don't have to retrofit." The new network even gives him some time to plan.He would not have, he says, made a different decision.Gill says a flexible and scalable network takes a sizable load off managers like Hinson. "There's a big frustration amongst the network managers in terms of the moves, adds, and changes, as well as complexity and costs associated with legacy networks," he says. "The ability to have some freedom outside of the office where you're not being beeped and chased down and telephoned 24 hours a day because the network is is not reliable is a huge issue. What we try to do is give those IT managers the opportunity to focus on other things that give the organization much more bang for the buck." Gill is looking for more happy customers, he says. In fact, FORE is focusing more on management and integration with applications, coining the term "Intelligent Infrastructure" to describe the combination of hardware and software. "The Intelligent Infrastructure is focused on the complexity issues, ease of use, and cost of ownership," Gill says. "It's a way to simplify the network and allow the software, which is the intelligence, to make many of the decisions and take some of the complexity out. Therefore, it's somewhat self-healing, self- tuning, self-configuring, and very resilient. "Rather than stay in the enterprise backbone, however, Gill is steering FORE towards new markets--the midsized business market on one side and the carrier market on the other. "Many of the large enterprise customers that we do business with today function like service providers," Gill says. "A large utility company with lots of rights of way or a large petroleum company that has high bandwidth needs but also has communications needs throughout many remote field operations, need carrier-class connections." "ATM and IP should be integrated together as part of a managed service, and given the prevalence of IP infrastructure, ATM for many of the service providers represents the best transport mechanism for IP," Gill says. He thinks that is especially true of 27
  28. 28. the ISP that wants to move from data to voice and video. "They can deploy an ATM backbone infrastructure to transport IP, but also to enable, down the road, the services they desire to offer. They're not going to be able to do that with a routed infrastructure." And the carriers have the same problems as do enterprises: legacy infrastructures with multiple services. "They're not all ATM oriented, but ATM represents a terrific way to enable many of the services that they want to offer. What's happening is many of the carriers are actually enjoying business from enterprises, where the enterprise outsources its wide area network to the carrier," he says. "We're one of the only companies--Cisco is one of the few others--to sell to the carriers and the enterprise customers, and we bring carriers enterprise business as a channel for them." Date: Jul 13, 2007 Guidelines for issue of ATM-cum-Debit Cards by UCBs RBI/2007-2008/95 UBD (PCB) Cir No. 6 /09.18.300/2007-08 The Chief Executive Officers of All Primary (Urban) Co-operative Banks Dear Sir/Madam, Guidelines for issue of ATM-cum-Debit Cards by UCBs. 28
  29. 29. Please refer to our circular UBD (PCB).BPD.Cir.No.50/09.69.000/05-06 dated April 28, 2006 permitting the banks fulfilling certain eligibility norms to install ATMs and issue ATM-cum-debit cards. 1. It has been now been decided to issue guidelines for issuance of ATM-cum-Debit Cards. Banks which are authorized to install on- site /off-site ATMs, as per the policy in force, may introduce ATM- cum-Debit cards with the approval of their Board keeping in view the guidelines as given in Annex I. Issuance of offline debit card is however, not permitted. The details of the ATM-cum-debit cards introduced may be advised to the Regional Office concerned of the Reserve Bank of India together with a copy each of the agenda note put up to their Board and the resolution passed thereon. 2. UCBs should not issue ATM-cum- debit cards in tie-up with other non-bank entities. 3. UCBs may review operations of these cards and put up review notes to their Boards at half-yearly intervals, at the end of March and September, every year. A report on the operations of these cards issued by banks should be forwarded to the Reserve Bank of India , Department of Payment and Settlement Systems (DPSS) with a copy to the Regional office concerned of Reserve Bank of India on a half yearly basis, say at the end of March and September every year, incorporating information as indicated in Annex II (N.S.Vishwanathan) Chief General Manager-in-Charge 29
  30. 30. ANNEX I Guidelines for Issuance of ATM-cum- Debit Cards by UCBs- 1. Coverage The guidelines apply to the cards encompassing all or any of the following operations: Electronic payment involving the use of card, in particular at point of sale and such other places where a terminal / device for the use / access of the card is placed. The withdrawing of bank notes, depositing of bank notes and cheques and connected operations in electronic devices such as cash dispensing machines and ATMs. 2. Cash Withdrawals No cash transaction, that is, cash withdrawals or deposits should be offered at the Point of Sale, with the ATM-cum-debit cards under any facility, without prior authorization of RBI under Section 23 of 30
  31. 31. the Banking Regulation Act, 1949. 3. Eligibility of Customers The banks can issue ATM-cum-debit cards to select customers as per their own eligibility criteria subject to compliance with 'Know Your Customer' guidelines. Banks can extend the ATM-cum- debit card facility to those having saving bank account / current account / fixed deposit accounts with built-in liquidity features maintained by individuals, corporate bodies and firms. Debit card facility should not be extended to cash credit / loan account holders. 4. Security and other aspects (a) The bank shall ensure full security of the card. (b) No bank shall despatch a card to a customer unsolicited, except in the case where the card is a replacement for a card already held by the customer. (c) Banks shall keep for a sufficient period of time, internal records to enable operations to be traced and errors to be rectified (taking into account the law of limitation for the time barred cases). (d) The cardholder shall be provided with a written record of the transaction after he has completed it, either immediately in the form of receipt or within a reasonable period of time in another form such as the customary bank statement. (e) The cardholder shall bear the loss sustained up to the time of notification to the bank of any loss, theft or copying of the card but only upon a certain limit or fixed amount or a percentage of the transaction agreed upon in advance between the card holder and the bank, except where the card holder acted fraudulently, knowingly or with extreme negligence. 31
  32. 32. (f) Each bank shall provide means whereby its customers may at any time of the day or night notify the loss, theft or copying of their payment devices. (g) On receipt of notification of the loss, theft or copying of the card, the bank shall take all action open to it to stop any further use of the card. 5. Terms and Conditions for issue The relationship between the bank and the card holder shall be contractual. As such: a) Each bank shall make available to the cardholders in writing, a set of contractual terms and conditions governing the issue and use of such a card. These terms shall maintain a fair balance between the interests of the parties concerned. b) The terms and conditions shall be expressed clearly. c) The terms shall specify the basis of any charges, but not necessarily the amount of charges at any point of time. d) The terms may be altered by the bank, but sufficient notice of the change shall be given to the cardholder to enable him to withdraw if he so chooses. A period shall be specified after which time the cardholder would be deemed to have accepted the terms if he had not withdrawn during the specified period. e) (i) The terms shall put the cardholder under an obligation to take all appropriate steps to keep safe the card and the means (such as PIN or code) which enable it to be used. (ii) The terms shall put the cardholder under an obligation not to record the PIN or code, in any form that would be intelligible or otherwise accessible to any third party if access is gained to such a record, either honestly or dishonestly. 32
  33. 33. (iii) The terms shall put the cardholder under an obligation to notify the bank immediately after becoming aware: of the loss or theft or copying of the card or the means which enable it to be used; of the recording on the cardholder's account of any unauthorised transaction; of any error or other irregularity in the maintaining of that account by the bank. (iv) The terms shall specify a contact point to which such notification can be made and that such notification can be made at any time of the day or night. (v) The terms shall put the cardholder under an obligation not to countermand an order, which he has given by means of his card. g) The terms shall specify that the bank shall exercise care when issuing PINs or codes and shall be under an obligation not to disclose the cardholder's PIN or code, except to the cardholders. h) The terms shall specify that the bank shall be responsible for direct losses incurred by a cardholder due to a system malfunction directly within the bank's control. However, the bank shall not be held liable for any loss caused by a technical breakdown of the payment system if the breakdown of the system was recognizable for the cardholder by a message on the display of the device or otherwise known. The responsibility of the bank for the non- execution or defective execution of the transaction is limited to the principal sum and the loss of interest subject to the provisions of the law governing the terms 33
  34. 34. ANNEX II Reporting Format for the Issue and Operations of ATM-Cum-Debit Cards- 1. Name of the Bank- 2. Period of Reporting- 3. Type of the card with hardware components-(IC Chip) eg., Magnetic strip, CPU, Memory- 4. Type of the software used- 5. Security standards followed- 6. Service provider (Self or otherwise)- 7. Total number of outlets where the ATM-cum-debit card can be 34
  35. 35. used of which- (a) POS Terminal- (b) Merchant Establishment- (c) ATMs-(d) Others please specify. 8. Total number of cards issued-of which- (a) Against Currant account-(b) against Savings account- (c) against Float Account- 9. Total Number of Transactions during the period- 10. Amount involved in the Total Number of Transactions- 11. Instances of frauds, if any, during the period. (a) No. Of frauds-(b) Amount Involved-(c) Amount of loss to the bank- d) Amount of loss to the card holder- Benefits of Biometric supported ATMs Provides strong authentication Can be used instead of a PIN Hidden costs of ATM card management like card personalisation, delivery, management, re-issuance, PIN generation, help-desk, and re-issuance can be avoided Ideal for Indian rural masses It is accurate Flexible account access allows clients to access their accounts at their convenience Low operational cost of the ATMs will ultimately reduce TCO How it works 35
  36. 36. With ATMs supported by biometric solutions, banks having a presence across the country are leveraging on this technology. The ATMs are networked and connected to a centralised computer (Switch), which controls the ATMs. The use of biometrics identification is possible at an ATM. The information can be stored at a bank branch. ATMs are so prevalent and you have so many people using ATMs that it becomes easy to use biometrics as a replacement for an ATM PIN. The typical ATM has two input devices (a card reader and keypad) and four output devices (display screen, cash dispenser, receipt printer, and speaker). Invisible to the client is a communications mechanism that links the ATM directly to an ATM host network. The ATM functions much like a PC, it comes with an operating system (usually OS/2) and application software for the user interface and communications. While most ATMs use magnetic strip cards and personal identification numbers (PINs) to identify account holders, other systems may use smart cards with fingerprint validation. The ATM forwards information read from the client’s card and the client’s request to a host processor, which routes the request to the concerned financial institution. If the cardholder is requesting cash, the host processor signals for electronic funds transfer (EFT) from the customer’s bank account to the host processor’s account. Once the funds have been transferred, the ATM receives an approval code authorising it to dispense cash. This communication, verification, and authorisation can be delivered in several ways. Leased line, dial-up or wireless data links may be used to connect to a host system, depending on the cost and reliability of the infrastructure. The host systems can reside at a client’s institution or be part of an EFT network. The EFT network supports the fingerprint authentication. Point-of-sale services that use biometric solutions are also possible. Shekar says, “The FSS Biometric ATM Solution consists of a central server which holds a repository of customer fingerprints. It also customizes the Switch to enable authorization of a customer’s biometric data and interfaces with ATMs enabled with biometric devices as per FSS specifications. The central server solution is platform independent, it uses Java and can run 36
  37. 37. on Unix and Oracle/ Microsoft SQL Server; customisation to BASE24 Switch (of which FSS is the distributor) is done using TAL. Biometric application and devices from Secugen are used for customer interface and application development.” Axis Technology on the other hand, has developed an innovative new product called the Biometric Retrofit Kit for ATMs. This kit converts a regular ATM to one that authenticates users based on biometrics—fingerprint or iris. This is an affordably priced kit tat has generated interest among financial institutions. Recent Initiatives Deploying ATMs for rural masses depends largely on banks stepping forward to take the requisite initiatives. The recent directive from the government on financial inclusion (“banking for the common man”) is a key driver for the growth of such solutions in India. Banks are quite aware of the untapped potential in the rural sector. The telecom industry is witnessing a blistering growth pace, and so is the Internet. The National Rural Employment Guarantee Program that guarantees employment and payment in the rural sector requires robust solutions. Using thumbprint and voice guidance in ATMs reduces literacy requirements to a considerable extent. However, the technology is not restricted to rural masses. FSS is in discussions with Andhra Bank for deploying the BAIS. Several other public sector and private sector banks have shown interest too. Says Shekar, “FSS would like to work with ATM and POS vendors to provide innovative and cost effective solutions to banks and customers.” FSS is striving to modularise and ‘ruggedise’ the solution to perform online functions across a wide variety of delivery channels and payment systems. Apart from these banks, some other banks such as ICICI Bank are planning to introduce biometric authenticated ATMs in rural India. CMC has been working with Institute for Development and Research in Banking Technology (IDRBT) on a pilot project in rural banking. Biometric (Fingerprints) smart cards, which consist of fingerprint data and financial data, will be issued to the rural banking customers for carrying out financial transactions. Elaborates Mehtre, “For building and developing various applications, CMC has a biometric technology group at its 37
  38. 38. Research and Development Center in Hyderabad. The team evaluates the latest technologies emerging in the biometrics area. This helps CMC’s solutions to be competitive and cost effective. CMC has been working with Bank of India for introducing biometric ATMs. CMC has demonstrated its Biometrics ATM solution on the eve of inauguration of mobile ATMs for the bank.” ATM Growth set to explode in India 10 years ago, an ATM was a novelty in Indian bank branches. But with the entry of aggressive private sector banks, ATMs have mushroomed in the urban Indian landscape. Srikanth RP and Rajneesh De analyse the ATM explosion in India and say that newer uses for ATMs will see growth shoot up even further Banking in India has come a long way thanks to a combination of factors like increasing consumer awareness, technological advancement, as well as the growing financial muscle of our populace. Even the acclaimed Rip Van Winkles of the Indian financial industry the PSU banks are moving up another gear in embracing technological innovation. One such innovation is the Automated Teller Machine (ATM), today’s most preferred mode 38
  39. 39. of delivery channel in all FIs. Banks like ICICI Bank, UTI Bank and HDFC Bank all deploy ATMs aggressively and have seen their customer base swell. Subsequently, even PSU banks have followed suit with an increasing number of ATMs. Global perspective But how does India stand against the rest of the world in ATM installations? World ATM installations are set to rise by 45 percent over the next few years till 2004, according to a new report by Retail Banking Research. Currently there are over 800,000 machines operating worldwide and this figure will rise to over 1,150,000 by 2004. Of the global figure, the largest market was Asia-Pacific, which accounted for 253,000 installations, nearly a 32 percent global share. Of these machines, the majorities—142,500—were in Japan. North America has become the second largest region with 221,000 machines. Western Europe has fallen to third position with 219,000 ATMs. Both regions each hold over 27 percent of the world total. During the past two years Latin America has significantly increased its share in the world market and now has 82,500 installations, over 10 percent of the global total. Their are a further 14,500 machines in the Middle East and Africa. Finally, the emerging markets of Eastern Europe account for 11,500 terminals. Looking forward, the USA will still lead the rankings in ATM installations in 2004. However China seems likely to rise into fourth position by 2004. In terms of growth in installations the picture is very different. India, Bulgaria, Egypt and Bolivia will show dramatic increases in their installed base. However developments in recent years in some countries, such as Russia and Indonesia, mean that future growth is well below what was forecast earlier in the decade. PSU banks-In the driver’s seat Market analysts believe that the growth in the installed base of ATMs, which was primarily driven by private sector banks, will 39
  40. 40. be driven by Indian PSU banks in the next year. The number of ATMs is predicted to reach 30,000 units within seven years, from the current installed base of around 4,500. The retail- banking scene is getting hotter by the day with banks going all out to increase access points. This is great news for ATM Majors like NCR India and HMA Diebold, which are fighting aggressively to increase market shares. At stake is a pie of Rs 250-270 crore, which is expected to grow exponentially at a growth rate of over 100 percent. Ironically, the introduction of ATMs in India was not warmly welcomed by the various labour unions. But now, you can witness ATMs everywhere—right from Gobichettipalayam, a southern most town of Tamil Nadu to Hazaribagh in Jharkhand. Says Srinivas Rao, business head with the Self-Service Solution at NCR India, “With PSU banks going all out to tap the retail market through ATMs, the market is ready to explode. We are extremely bullish on the Indian market and are witnessing growth rates of over 100 percent.” Agrees Harish Murthi, managing director, Diebold HMA; “There has been tremendous growth in the last few years. In the years 2000 and 2001, the market has grown by a whopping 100 percent over the previous year. We expect it to grow at a rate of 80 percent annually in the next couple of years.” That India is a boom country for ATMs is corroborated by a report from the ‘Global ATM Directory’ 2000 edition which states that the Indian market for ATMs is expected to grow at an estimated growth rate of 486 percent, while China’s growth has been pegged at just over 200 percent. Rao cites the case of China where the installed ATM base currently stands at 26,000, up from 1,600 eight years ago. ATM vendors are comparing India as the next China, and are expecting similar growth in India. Explains Rao, “Every technology takes time to get accepted. It is no different with ATMs. For example, in China during the years 1982-1993, there were only 2,000 40
  41. 41. ATMs. But during the years, 1993-2000, it boomed to over 48,000 ATMs. India too is witnessing a similar trend.” Adds Murthi, “Unlike China, the reach of the banks is wider in India. Even in the most remote village of India, a public sector bank can be found. However, population-wise the reach of banks is limited. The amount of banks catering vis-à-vis 100 people would be lower than many developed countries. In such a scenario, ATMs come as a boon. Hence there is a definite possibility of India growing over China in the ATM market.” Winning strategies In a move to earn greater revenues, every vendor worth his salt is trying out innovative strategies. For example, Diebold HBA offers a total managed service called Total Implementation Solution (TIS). This gives banks a single window for procuring all their ATM related needs. The basket of solutions includes ATM monitoring, software distribution for ATMs, cash management and network management. Many Indian banks that were hampered because of lack of knowledge of technology are now actively talking to ATM vendors for outsourcing their needs. For example, Bank of India recently signed an agreement with India Switch Company, a Diebold HMA group company, for outsourcing the setting up of ATMs. Other banks-especially PSU and co-operative banks—are expected to follow this trend. Rival NCR too has concentrated its energies on offering specialised solutions besides the usual strategy of providing and maintaining ATMs. Explains Rao, “Our ATM models in India range from simple cash dispensers to scalable ATMs that can be customised according to individual client requirements. We also offer specialised models that dispense information and non-cash items such as tickets and coupons.” 41
  42. 42. As part of its strategy in offering innovative services, NCR is talking to the Railways in Mumbai for deploying an ATM, which could be used to dispense railway tickets. The focus is on letting the customer use the ATM as a medium which can be used for non-cash transactions like payment of bills, insurance payments, printing of statements or accessing the Internet. Adds Rao, “The key idea is to get the customer used to these channels and then migrate him to different low cost channels like the Internet. For example, a customer using a Web-enabled ATM would be more likely to go in for, say, a service like Internet banking. Also, from the bank’s point of view this would be more cost effective as a transaction over the Internet would only cost the bank approximately Rs 10-12 per transaction.” NCR is also looking at offering solutions that can bundle the ATM with the smart card. For example, the value of a Petrocard (a smart card with stored value used in petrol stations) would double if the Petrocard user has the option of topping up the pre- paid value of the card via an ATM. This option would give the customer better flexibility. Adds Piyush Khaitan, VP, Venture Infotek, “The trend now is to use the ATM as a tool to acquire new customers and retain them by providing a range of services. Banks are slowly waking up to the ATM’s potential as a serious marketing tool. They are also earning sizeable revenues by using ATMs to advertise products from other companies.” A few banks are offering utility bill payment facilities on their machines too. Apart from that, a variety of services ranging from railway card/season tickets and cinema tickets to dispensing of mobile phone smart cards are being thought of as a part of the strategy to attract customers and earn extra revenue. Another unique strategy from NCR is the installation of local language ATMs that are available in almost all Indian languages. In rural areas for example, some farmers are extremely rich but do not have access to ATMs. How do banks reach out to such people? The answer is in the form of intelligent ATMs. Besides, 42
  43. 43. an illiterate person would not be able to use an ATM, whichever language it displays. The answer is an ATM that offers an audio aid, which has clear instructions on how to withdraw cash in the language he speaks. Visible trends 43
  44. 44. Explains Rao, “We are seeing two distinct trends—state-run banks are installing ATMs to ensure that they do not lose customers, and to cut costs, while private and foreign-owned banks are using it to acquire customers.” This does not mean that the cost-factor is not relevant to the latter. Again, of the installed ATM base, nearly private and foreign players account for 70 percent. We also see that state-run entities have more of onsite ATMs. Adds Mani Mamallan, senior vice president, India Switch Company; “ATMs have evolved from only basic cash dispensing solutions to one which can provide value added services. The future of ATMs will be touch-screen kiosks, payment of bills, and smart cards bundled in with ATMs.” Other factors like non-banks setting up ATMs, when that is allowed, will also offer buoyancy to the market. This segment is closed as there is a central banking regulation that prevents it from happening. But both Murthi and Rao feel that the entry of non-bank players, as and when it happens, will lead to an exponential growth in ATMs. World’s Top Ten ATM Countries Ranked Acc- ording to Number of Machines, end 2000 Country Installations USA 197,500 Japan 142,500 Brazil 46,500 Germany 45,500 South Korea 41,500 Spain 38,000 France 29,500 Italy 29,000 UK 25,000 Canada 23,500 Source: The Global ATM Market to 2004 44
  45. 45. Local challenges Though the market is currently dominated by Diebold HMA and NCR, local players like Tata Infotech are also trying to get a foothold in the Indian ATM landscape. Says Zakir Hussain, national manager for marketing at Tata Infotech, “Looking at the huge demand for ATMs in India, our ATM initiative, which started off as an export commitment, has now been expanded to the domestic market.” Tata Infotech is one in a rare club because unlike the others, it does not import ATMs but manufactures them itself. Tata InfoTech too offers a full range of solutions to the customers, which cover the gamut of cash dispensers and ATMs. The companies own software group ensures that the necessary software is provided to help the banks integrate their back-end banking software. Then there are solution providers like Venture Infotek who provide solutions that start from ATM site preparation to the entire backend management of the ATM business. Says Udai World’s Top Ten ATM Countries Ranked Acc- ording to Percentage Growth in Installations, 2001-2004 Country 1 India 2 Bulgaria 3 Egypt 4 Bolivia 5 China 6 Poland 7 Peru 8 Russia 9 Indonesia 10 Philippines Source: The Global ATM Market to 2004 45
  46. 46. Singh Pathania, president and head, financial institutional business, Venture Infotek, “Being a transaction processing company we are looking at the networking and running of the ATM business rather then the sales of ATM units.” He is also planning to tie up with strategic ATM manufacturers to specifically target co-operative banks who he feels will be one of the major upcoming players in this segment. These banks do not have the financial muscle of the other MNC or private banks and very few of them can afford to invest in technology. “We would also be focusing on interconnecting these banks’ ATMs. This will help co-operative banks to offer their customers the facility of transacting on any ATM on Venture’s network,” he adds. Venture Infotek recently implemented a turnkey ATM solution project for BNP Paribas, wherein their entire ATM services was outsourced by the bank to the company. Success stories ICICI Bank is one bank, which has seen a massive surge in volumes, since the introduction of ATMs. The number of ATMs, which numbered around 90 in December 1999, has now swelled to 540. Currently, the total volume of ATM transactions is pegged at an astronomical 2,00,000 transactions a day. Says P K Vohra, joint president, ICICI InfoTech Services, “The larger the volume of transactions, the less the cost per transaction.” Also, the convenience of anytime money has attracted a lot of customers, and the bank has seen its customer base swell three- fold from 6.5 lakh in March 2000 to 20 lakh in March 2001. ICICI has also shown how technology can translate into reduced costs. Typically, a transaction through a bank branch costs approximately Rs 45. The same transaction done telephonically costs Rs 30, through an ATM costs about Rs 18, and through the Internet in huge volumes, only Rs 4. Just a look at the volumes of transactions done at the ICICI ATMs indicates the high level of success the project has seen. 46
  47. 47. Existing bottlenecks But in spite of all the positive signals, there are problems galore, which if not set right, can come in the way of ATM growth rates in India. One is the familiar infrastructure problem. Other problems are issues like obtaining many different permissions from different authorities like the municipal authorities, building society permission, permission for locating VSATs on top of a building, obtaining permission from the local telecom provider, etc. The rapid deployment of ATMs earlier was because of the fact that there was no permission required from the Reserve Bank of India. But today this is mandatory. Industry experts point out that this was done because there were a lot of banks, which set up ATMs without adequate funds. The RBI wanted to check the status of banks before allowing them to set up ATMs. Most banks today are looking at ATMs not only as a delivery channel that bring in customers in droves but also significantly reduce transaction costs. But, whatever forms the ATM assumes in future, one thing cannot be ignored by any bank—the fact that ATMs have come to stay. 47
  48. 48. Quick Facts about ATMs • There are over 1.2 million ATMs installed worldwide. • Approximately every 5 minutes a new ATM is installed. • Various industry bodies help to self-regulate the ATM industry including: banking associations, electronic funds transfer associations, network associations and the internationally active ATM Industry Association (ATMIA). • The ATM is one of the most important technological inventions of the second half of the twentieth century, helping to create the 24 X 7 open convenience demanded by the consumer society. • The ATM provides millions of cardholders around the world with convenient 24 X 7 all hours’ access to their own banked cash near to where they live, work and shop. • ATMs have made banking more convenient today than ever before: with the touch of a few buttons, cardholders can withdraw cash, make deposits, top up air time, pay bills and transfer funds. The industry does care about the security of cardholders and has formed a Global ATM Security Alliance to combine global security resources to stamp out crime and fraud connected to ATMs. 48
  49. 49. Copy a card’s security information on its magnetic stripe in order to reproduce the information on a counterfeit card. Card swapping – where a customer’s card is swapped for another card without their knowledge during an ATM transaction. Shoulder surfing – where an individual stands close by to observe PIN entry. Compromise of PIN number – either the customer’s PIN is noted by observation – “shoulder surfing” or through binoculars – or a hidden camera illegally records the PIN. Vandalism – where an ATM machine is deliberately damaged and/or the card reader is jammed preventing the customer’s card from being inserted. Physical attacks – where an ATM machine is physically attacked with the intention of removing the cash. Diversions – when criminals use messages and signs affixed to ATMs either to make the modifications they have made to the ATM look less suspicious or to direct customers to a nearby ATM, which they have compromised. 49
  50. 50. ANALYSIS THE SURVEY Analysis for the better understanding of the HSBC bank account holders was carried out. The purpose of analyzing was to know customer satisfaction, awareness of the ATM offered by the bank and that, their view about some facilities they would like to have and improvements suggested for better working of the bank and higher satisfaction. Questionnaire method was used to carry out the survey. The survey was carried out in the different part of city of Mumbai. Different type of account holders like saving account & current account, fixed account holder were interviewed. Some very interesting facts came up which will be dealt in detail later. A set of 10 questions was used in the questionnaire. Which varied from objective type to descriptive types of questions. Questionnaire was framed and design in such a manner that it could be filled up within 5 minutes by the person thus saving time of interviewee. The sample size of the survey was taken to be 50. of this 50 people 20 questioned were to business person, 15 people were servicemen and professional, 10 students and 5 housewives or 50
  51. 51. other categories. Questions ranged from getting information about ATM using, depositing money in ATM etc. Besides the questionnaire, method information was also gather by means of secondary data from sources such as: 1. Branches of HSBC 2. HSBC websites. SHRI CHINAI COLLEGE OF COMMERCE &ECONOMICS Survey for Project on Automated Teller Machine (ATM) NAME: ______________________________________________ DESIGNATION: _______________________________________ SIGNATURE:________________________________________ __ CONTACT NO:_________________________________________ 1. Do you have ATM card? Yes Or No 2. How do you find depositing money in ATM? Complex OR Simple 51
  52. 52. 3.Do you find using ATM card Risky? Yes Or No 4.comparing the bank how do you like service of ATM? Good Better Best 5. Which bank you prefer for ATM cars? Private bank Nationalize bank Suggestion: ________________________________________ ________________________________________ Project Guide: Prof.Nishikant Jha Survey conducted by: Signature:__________ Priya R Gadoya TY.B.B.I. Roll no- 16 1. Do You have ATM card? Yes 60% No 40% 52
  53. 53. 2. How do you find depositing money in ATM? Simple 75% Complex 25% 3. Do you find using ATM card risky? Yes 50% No 50% 4. Comparing the bank how do you like service of ATM? Good 10% Better 75% Best 15% 53
  54. 54. 5. Which bank you prefer for ATM card? Private 75% Nationalize 25% Questionery for Banker 1.How Many ATM Centres in our country & out side Country 54 User of ATM card Good Better Best
  55. 55. Ans. Over 15000 Centres Approx. One Million out side Country 2. How much Bank charges your are charged to Provide ATM Facility? Ans. Rs. 150/- p.a 3.On and average How much cash do you put in to ATM? Ans. 2 Lacs to 2.50 Lacs per Week. 4.Custmors complaintss about ATM Card? Ans. Not accepting ATM card in Some Machines. 5. How do you handle ATM Problem? Ans. Depends upon your problem. Eg. If ATM Card is Lost, and Custmore Lodge the Complain no more operations are allowed in that ATM card with Immediate effect. 6. Latest Technology Provided by Bank? Ans. Internet Banking. 7. As per your View What are the Advantages & Disadvantages of ATM ? Ans.Advantage :- 24 hours 7 days services provided to customers Disadvantage:- If you Lost ATM Card,it can be Misuse by Some One 8. How Much bank charges are charged if we use other bank’s ATM Machine? Ans. Rs.55 Per transaction 55
  56. 56. 9.What are the software are used by the bank? Ans. HSBC software development ltd has establish a software center in pune to develop solution for HSBC’s group offices world wide. 10. How does debit card work? Ans. ATM is a whilest at Merchant establishment it works it work in the same way as crdit card accept that the transacted amount is directly debit from your saving & current deposit account. 56
  57. 57. Conclusion It ’s a brave new world in the ATM space — one that offers a great deal of flexibility for financial institutions. In this new era, FI must consider best of breed solutions. Selecting ATM software separate from ATM hardware will give FIs more leverage, more choices and more flexibility to add functions and Services in the future. It also will allow them to complement their networks with hardware from multiple vendors, thereby helping them reduce their overall cost of ATM ownership. ATM is time & cost saving machine. For many customers ATM are becoming the only interaction they have with their banks. Having a look at the no of increasing ATM it is clear that in future there won’t be any problem of cash withdrawals. Due to all these feature in a ATM, the customers is more likely to prefer the ATM’s rather than bank &this may also lead to alienation of the customer. In addition ATM are also becoming a competitive mark for many banks. Therefore it is imperative to ensure that the customers experience with the ATM is safe and secure. It ’s important to note, however, that not all ATM deployers will progress at the same rate. Some may decide to address their networks from a Software-buying perspective. Others may decide that attacking hardware. First is the best option. And some may opt for proprietary solutions, or varying degrees of proprietary and open-vendor solutions, over entirely open, multivendor solutions. Regardless of the route pursued, FIs must understand that open systems and multivendor software are the way of the future. Whether they decide to adopt that future now or later will depend on the size of their networks and the upfront investments they ’re willing and able to make. 57
  58. 58. Bibliography 1. Introduction to computer Author: - Ms Alka Vaidya 2. J. A. I. I. B. Guidelines Author:- Gyani 3. Introduction to Banking Financial Services. Author:- Dr onkar Nath 4. www.Google.com 58