Business Line – e-World – December 24, 2007

Coughing up more than money

K. Ananthan

More to the machine.

V.Rishi Kumar

Automatic teller machines (ATMs) have become a lot more versatile in the last couple of years. With proliferation of mobile phones, efforts are on to empower people to access ATM services over handsets.

The Country Manager Sales, Financial Solutions Division, NCR Corporation, India, P.P. Manjunath Rao, explains how these machines, with muti-tasking capabilities, are going beyond being just being cash dispensers, helping people buy airline/train tickets, recharge mobile phones,etc. Excerpts from a chat with eWorld.

ATMs have become more than money dispensers. What are the key trends in this space?

Customers across the globe have identified self-service solutions to be more convenient than teller-assisted service.

More and more Financial Institutions are looking at migrating routine transactions such as cash deposits, bill payments, money transfer, balance enquiry, etc, to the self-service channel, as it not only saves time but also allows tellers to focus on better customer service. It also frees up bank staff for sales functions that increase revenue for the bank.

Regarding trends, it is Consumer is King. The ever growing requirement of convenience and speed, and a corresponding culture of customer focus, will force banks to identify and deploy innovative channel avenues to ensure customer retention and growth

Introduction of Cheque Truncation Solution (CTS):

The one big revolution in the Indian banking scenario would be the introduction of CTS.

This will put pressure on banks in India to be technology-ready for the introduction of image-based Cheque Truncation backbone system, a Reserve Bank of India (RBI) mandate.

This solution will enable bank ATMs to provide Cheque Processing Module (CPM), making cheque clearances faster and convenient for bank customers.

Financial Inclusion: The recent RBI directive of financial inclusion presents a challenge for banks.

Although, it seems more convenient for PSU banks as they already have some rural presence through their branches, they will require to take another look at their rural model holistically if the RBI mandates are to be met substantially.

For Private Sector Banks, presence will have to be built from scratch. We see deployment of the self-service channel, in a different form, better suited to meet specific challenges of the rural environment, and enabled by biometrics technology, to be one of the key solutions banks will need.

Passbook Printing: Enables customer to update passbook anytime as per his convenience at the ATM without interfacing with bank executive.

How big is this industry globally and in India?

The ATM industry in India is among the fastest growing in the Asia-Pacific region and NCR continues to remain the market leader in the ATM industry in India.

A significant growth comes from the latent potential within the Indian market with over 30,000 ATMs — which is about 28 ATMs per million people. In countries such as the US and Canada, there are nearly 1,300 ATMs per million people.

In Mexico, it is about 200 ATMs per million. For India, it is about 28 per million. The highest density of ATMs is seen in South Korea, where it is about 1,600 ATMs per million.

China has about 55 ATMs per million. Despite rapid growth, India has a long way to go compared to other markets. For example, China has about 80,000 ATMs, the US more than 400,000 ATMs.

Are you seeing growth of self-serving terminals with large format stores, airports coming up?

NCR recently conducted a Queue Frustration survey undertaken by ACNielsen amongst 1,782 working men and women in the 25-45 years age group across major cities in India, including Mumbai, Delhi, Kolkata, Chennai and Bangalore. According to the respondents, 85 per cent of respondents are becoming less patient about queuing.

< self-service better offering provider service another to switched respondents India all the of cent per 26 Significantly, cent. 27 at queues Payment Bill cent, 30 Ticketing by followed closely 34 problem biggest single as identified were >

We see deployment of the self-service channel better suited to meet specific challenges of the rural environment.

ATMs enabled by Biometrics and Wireless connectivity (which is more economical than legacy systems of connectivity) will be one of the key solutions that banks will need. Deployment of self-service solutions will prove to be cost-effective for banks as more low-value transactions get migrated to the ATM channel, which frees bank resources for other customer-facing services and sales.

Kinetics, a subsidiary of NCR, has thousands of airline self-service devices installed in more than 285 airports worldwide, including 21 major airlines (who represent two-thirds of all annual self-service check-ins in the US alone), powering approximately one billion transactions each year.

Travellers using Kinetics kiosks can check in for flights, change seat assignments, print boarding passes and receipts, purchase upgrades and more. Kinetics technologies support all consumer channels, including kiosks, Web, PDAs, cell-phones and phones (natural speech recognition).

Self check-in also is a big business globally.

Is outsourcing catching up in ATM?

The Indian ATM industry has seen explosive growth in recent times and banks have committed to substantial capital outlays on ATM deployment, recognising the significance of the 3 Ms — Maintenance, Monitoring and Management.

More banks are now considering the outsourcing option.

Banks are investing large amounts to set up their ATM networks but unless high availability of ATMs can be ensured, this investment will not bring the desired returns on investment and customer satisfaction. Depending on the level of outsourcing, banks can save about 10-25 per cent.

NCR anticipated this trend and set up a world-class Management Centre in Mumbai in 2001.

Now, it has set up a new one with larger capacity, to manage 25,000 ATMs. Currently, SBI, HDFC and HSBC, among others, are using NCRs services for managing their ATM networks.

How are you addressing mobile enablement?

Recently, NCR got into a strategic alliance with Symstream Technology Group Ltd, leader in wireless-technology, to introduce wireless connectivity solutions for ATMs. By deploying Symstream II wireless modem for Global System for Mobile Communications (GSM) connectivity, banks will be able to deploy ATMs to the most remote sites in India. Indian Bank has partnered with NCR to launch its first e-ticket kiosk and Portable ATM Centre at Egmore Railway Station in Chennai. To support the banks expansion plans to tap the unbanked rural sector and millions of individuals who commute by trains, NCR will install and deploy NCRs Personas ATMs at 156 locations identified by Indian Bank on a turnkey basis, of which 51 units will be deployed at railway stations.