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Customer Education Key to Prevent ATM Frauds - Banknet India

Banknet India released a comprehensive "Report on the Indian ATM Industry" at conference on ATM industry in Mumbai, India on 31st May 2007.

Banknet India’s report highlights that wide acceptance of ATMs by consumers, introduction of biometric ATMs and increasing scope of value-added ATM services will keep the momentum of the growth in the Indian ATM industry.

ATM has now become the most used touch point between a bank and its consumers. More people are now moving towards using the ATM for their banking needs. Increased ATM usage is also helped by the fact that customers have now the flexibility of using ATMs of other banks, as most of the banks are part of major interbank networks like CashTree, Cashnet and BANCS.

Number of ATMs installed in India grew by almost 20%, from 17,642 in March 2005, to more than 21,000 by March 2006. Yet, the ATM market in India is not saturated. Though the concentration of ATMs is greater in metros, the demand is increasing for other cities and even rural areas.

Many ATM vendors have devised specialised machines, embedded with biometric devices for authentication. Catering to the rural population, these machines have enabled them to interact with the machine in their local language and on a graphical user interface. The rural customer has seemed to accept this new medium. This has the potential to further widen the scope of ATM usage in the interior parts of the country.

There is also interest towards white-label ATMs. Many companies are interested in this model, where the ownership of the ATM will not be with the banks but with third parties who deploy them and make money on fees charged on every transaction.

Most ATM frauds happen due to the negligence of customers in using the ATM. The number of ATM frauds in India is more due to giving up Personal Identification Number (PIN) to others, than by sophisticated crimes like skimming. There are many cases where customers give out their PIN number to their driver or a relative to withdraw money for them. Most ATM frauds in India, thus, happen due to this negligence, and not ‘fraud’ per se.

The most important aspect for reducing ATM related frauds in India is therefore to educate the customer and banks need to take the lead in this area, said Mr Anurag Khanna, Chairman & MD, Banknet’s ATM report has compiled a list of precautions to help ATM user from avoiding an ATM fraud, he added.

Banknet India’s ATM report also covers- number of ATMs deployed, with a category-wise break up, working of interbank/bilateral networks present in the Indian scenario. It also includes an exclusive ATM User Survey by Banknet India and its key findings. For more details about the Report on Indian ATM Industry,

Report on Indian ATM Industry
Special Section on ATMs
Tips to users for Fraud Prevention



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