Will ATMs become the bank? Almost, and possibly soon

Machines might well make a bank someday. Indeed, should banks adopt the new self-service machines available in the market, the automated teller machine (ATM) centres could turn into veritable bank branches, of an automated kind of course. 

Sample the possibilities on offer:
Cash can be deposited without having to be inserted in an envelope. As many as 200 notes can be deposited at one go.
Multiple cheques can be received at once. The machines can accept up to 30 cheques at once. What’s more one can get a receipt for each cheque deposited with a scanned image of the cheque on the obverse.
Statements and passbooks can be printed on a 24X7 basis. And we are far from done.
“Even if a person doesn’t hold a bank account, he can pay utility bills and purchase movie tickets etc through these machines. The bank would get a fee for this,” says Lisa Heinzen, regional marketing manager-Asia Pacific, NCR Corporation.

Little wonder, most banks DNA Money spoke to are keen to install them. In fact, some have started testing them already. It’s easy to see the load these machines would take off the bank branch staff and even cash refilling agencies for ATMs.

Going by Heinzen, globally, these machines have reduced the deposit processing load of banks by 75%, saving some $15 million a year. German company Wincor Nixdorf, which supplies such machines via technology provider AGS Infotech and Georgia-headquartered NCR Corporation, launched its self-service cash deposit machine on Tuesday.

Among others, public sector Union Bank of India is learnt to have piloted five of these machines.  “We have installed one machine in the Hiranandani branch at Mumbai and we are checking it. So far, it has worked quite well. This machine is able to detect fake notes and we plan to roll out more such machines once the two other players —- NCR and Diebold —- launch their versions,” says Lalit Sinha, deputy general manager at Union Bank.

Kotak Mahindra Bank is having a good look at them too, going by K V S Manian, group head - retail liabilities. “We are keen on it and are also talking to them. We can put them in place either in branches or the electronic lobby near the ATM so they can be open 24x7.”

For all this, however, the machines won’t replace ATMs entirely just yet, says Manian.
The reason is cost. “We expect the price of such machines to be about double that of ATMs,” says Sinha of Union Bank.

Loney Antony, managing director of Prism Payments, which looks after ATM management for banks, agrees. “These machines are quite expensive and so may not occupy more than 5% of the total installations,” he says, pointing out that there are about 45,000 ATMs in the country at present.

All the same, it’s easy to see some new trends emerging. For one, cash deposit at machines is catching on.  “At the ATM, only withdrawal function has been popular, but these self-service machines will spin off deposit as a function,” says Antony.

The fake notes circulating in the banking system could also be arrested somewhat. Sunil Udupa, president and chief executive officer of AGS Infotech, says, “All tellers are not equipped to check fake notes as the quality of fake notes is getting better. These cash deposit machines have a data file of all the fraud notes detected so far. Once the machine finds any such notes, they are rejected and the customer is told so.”

The data file can be updated with any future counterfeit currency detected, thus curbing instances of fake notes, Udupa adds. Some see a perpetuation of fakes the machines fail to detect. “The machines could dispense fake notes to any customer if not detected by the machine. Technically, when a fake note is detected, a teller is supposed to destroy it and file a police complaint,” says a bank official, unwilling to be named.

But others make light of that risk. According to them, the machines will undergo rigorous testing and can detect fake notes before they are put in network. Antony of Prism Payments says, “Basically, the banks install equipment only after rigorous testing on various types of notes issued at various points in time. The templates have to be certified and the testing may take almost a year,” he says.