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Nitte Education International Post Graduate Diploma (Banking & Finance) Digital Banking & Alternate Channels Module 3

P a g e | 2 Post Graduate Diploma (Banking & Finance) Module 3 This module deals with: Automated Teller Machines (ATM) & Kiosk • Types, finer aspects of working (including that of cash dispensers). • Deployment, maintenance, monitoring for optimum utilization, customer convenience. • BNA (Bunch Note Acceptor), Offsite ATM, Debit Card dispute Resolution, Micro ATM • Role of service providers and accounting entries. • Failed and Unauthorised ATM transactions. • Multi-functional kiosk - Advancement & Application. • Digital Signage System – purpose, contents, operational perspectives, scope of information broadcast and yield enhancement. Introduction Automated Teller Machines (ATM) originated in the 1960s and the first ATM was installed in London by Barclays Bank. Paper vouchers printed with radioactive ink were used here so that the machine could read them. The customer entered an identification code and took cash. In 1977, Citibank took a strategic decision to launch ATMs all over the city of New York. In January 1978, a blizzard hit New York and the city was under 17 inches of snow. Banks could not open. People flocked Citibank’s ATMs to withdraw money. There was an immediate increase of 20% in ATM usage. On the back of the success of its ATM strategy Citibank launched its campaign “The Citi Never Sleeps”. All other banks followed and the ATM era took off. The first ATM in India was introduced by HSBC in 1987 in Mumbai. It used to dispense and accept cash. In 1997, the Indian Banks' Association (IBA) set up Swadhan, the first network of shared ATMs in India. It was managed by India Switch Company (ISC) for five years, and allowed cardholders to withdraw cash from any ATM in the network, for a fee if they did not have an account with the bank that owned the ATM. In 2002, the network connected over 1000 ATMs of the 53 member banks of the association. The network was capable of handling 250,000 transactions per day, but only 5000 transactions, worth about ₹100,000, took place each day. In August 2003, the IDRBT (Institute for Development & Research in Banking Technology) announced that it would be creating the National Financial Switch (NFS) to link together the country's ATMs in a single network. The IDRBT collaborated with Euronet Worldwide and Opus Software to build a platform to allow banks to connect their own switches to the NFS. The NFS consisted of an inter-ATM switch and an e- commerce payment gateway. NFS management has since been entrusted to NPCI - National Payments Corporation of India. With the technological invasion and innovation, banking has moved out of brick-and-mortar branches. With different channels taking banking to customer’s doorstep and customer’s
P a g e | 3 Post Graduate Diploma (Banking & Finance) becoming more demanding by the day-banks have been looking for newer channels to meet the aspirations of the customers and also streamline a safe and secure banking on 24x7 basis. Multi-function kiosks were introduced to offer a single point where bank’s customers can have all their banking needs addressed. In today’s world of heavy competition and advertisements, businesses are continuously facing the challenges of getting customer attention. As a result, visibility has become very important for customer acquisition, satisfaction and retention. In today’s business landscape, digital signage is one of the most effective and eye-catching communications mediums. Digital signages use technologies such as LCD, LED and Projection to display content such as digital images, video, streaming media, and information. ATMs An ATM is an electronic equipment which performs primary banking functions without the aid of the branch staff, some of which include - 1. Cash withdrawal 2. Balance Enquiry 3. Mini statement 4. Funds transfer 5. Change of PIN 6. Updating of mobile number 7. Paying insurance premium 8. Paying utility bills 9. Request for cheque book 10. Cash deposit 11. Cheque deposit There are many other features provided in the latest versions of the ATM. Every bank can customise the various features - financial and non-financial that it wants to provide at their ATMs. A Cash Dispenser is a limited function ATM, which allows cash withdrawal but does not allow cash deposit or cheque deposit. Benefits of ATM 1. Anytime machine available for use 24 hours a day and all 365 days of a year. 2. Quick and efficient. 3. Allows inter-operability between banks. 4. Based on authentication using PIN and so, is safe and secure. 5. Does not discriminate between individuals. 6. Wide array of utility facilities can be built into the ATM e.g., Fee payment. 7. As a source of advertisement.