Banks worried over rising cost of ATM channel
TIMES NEWS NETWORK[ FRIDAY, JUNE 01, 2007
While banks are rushing to expand their ATM networks, the operating expenditures they are facing are on the rise as well.
Speaking at Banknet India's Conference on ATMs, Anand Gupta, ICICI Bank’s ATM channel-head, said that the rising operational expenditure for the ATM channel is fast-becoming a concern.
At the same time, there has been a 20% growth in the number of ATMs installed in the country, and banks are working towards doubling the number of ATMs in the next three years. SBI is in the process of rolling out 3,000 more ATMs by the end of the year, according to the bank's general manager-ATM & internet banking, Ravi Kaul.
At present, the SBI has the largest ATM network in the country, of 6,800. The next-biggest player, ICICI Bank, also has big plans to increase their ATM presence, according to Mr Gupta, though he declined to present specific numbers. On the whole, ATMs are becoming a more popular interface between the customer and the bank.
"Each of the banks are at different stages of ATM-penetration. Up to 85% of HSBC's cash transactions have migrated to the ATM platform," said Vivek Singh, senior vice-president, delivery channels, HSBC. On the other hand, 40% of ICICI Bank's transactions have moved to the ATM platform. "This has added to the bottomline of the bank, as the cost-per-transaction goes down," added Mr Gupta.
Outlining the various constraints that the banks are facing when it comes to expanding the ATM-base, Mr Gupta spoke of regulatory concerns and the costs associated with infrastructure, land acquisition, and security. He also said that the next catalyst for ATM-growth will be the rural market.
SBI also has plans of getting active on the microfinance scene, with smart cards and biometric ATMs. They have floated expressions of interest for partners for the project and are evaluating their options, according to Mr Kaul.
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