You are on page 1of 55

Installation of ATMs in Various Places And Their Convenience To Users

INTRODUCTION
An automated teller machine (ATM) is a computerized telecommunications device that provides the customers of a financial institution with access to financial transactions in a public space without the need for a human clerk or bank teller. On most modern ATMs, the customer is identified by inserting a plastic ATM card with a magnetic stripe or a plastic smartcard with a chip, that contains a unique card number and some security information, such as an expiration date or CVC (CVV). Security is provided by the customer entering a personal identification number (PIN). Using an ATM, customers can access their bank accounts in order to make cash withdrawals (or credit card cash advances) and check their account balances as well as purchasing mobile cell phone prepaid credit. ATMs are known by various other names including automated banking machine, money machine, bank machine, cash machine, hole-in-the-wall, cashpoint, Bancomat (in various countries in Europe and Russia), Multibanco (after a registered trade mark, in Portugal), and Any Time Money (in India). The same monochrome interface that greeted ATM users three decades ago remains virtually unchanged today. Moreover, a majority of ATMs still leverage the same technologies and closed connectivity protocol that were used in the earliest ATMs. As a result, the ability to integrate with a banks existing infrastructure to offer more sophisticated and personalized functions is highly limited.

One might prematurely dismiss the ATM as an Antiquated Technical Misstep in the otherwise vaunted history of banking technology. But consider a recent poll commissioned by electronic payment solutions provider, eFunds. Respondents ranked the ATM as the most important modern convenience second only to the PC, but ahead

DIMAT

-1-

Installation of ATMs in Various Places And Their Convenience To Users

of e-mail and the cell phone. So while it may lack the power and panache of the PC, consumers can no longer do without the ATM.

Obviously for banks, the impetus behind introducing the ATM was not only to meet consumer demand for added convenience, but to lower transaction costs by moving customers away from costlier teller-based services. Customers use the ATM as their only option for round-the-clock physical transactions to conduct a remarkable 63 percent of their banking transactions, outpacing the Internet (27 percent), branch (7 percent), telephone (2 percent), and mail (1 percent) by a wide margin. Based on these figures, the goal of migrating customers to the less costly selfservice channel has clearly been met. Yet, the ATM still carries the dubious distinction of being the most revolutionary innovation in banking history that, nevertheless, has failed to keep pace with other technologies introduced around the same time, including the Internet.

HISTORY
The first mechanical cash dispenser was developed and built by Luther George Simjian and installed in 1939 in New York City by the City Bank of New York, but removed after 6 months due to the lack of customer acceptance. Thereafter, the history of ATMs paused for over 25 years, until De La Rue developed the first electronic ATM, which was installed first in Enfield Town in North London, United Kingdom on 27 June 1967 by Barclays Bank. This instance of the invention is credited to John Shepherd-Barron, although various other engineers were awarded patents for related technologies at the time. Shepherd-Barron was awarded an OBE in the 2005 New Year's Honours List. The first person to use the machine was the British

DIMAT

-2-

Installation of ATMs in Various Places And Their Convenience To Users

variety artist and actor Reg Varney. The first ATMs accepted only a single-use token or voucher, which was retained by the machine. These worked on various principles including radiation and low-coactivity magnetism that was wiped by the card reader to make fraud more difficult. The machine dispensed pre-packaged envelopes containing ten pounds sterling. The idea of a PIN stored on the card was developed by the British engineer James Goodfellow in 1965. In 1968 the networked ATM was pioneered in Dallas, Texas, by Donald Wetzel who was a department head at an automated baggage-handling company called Docutel. In 1995 the Smithsonian's National Museum of American History recognised Docutel and Wetzel as the inventors of the networked ATM. ATMs first came into wide UK use in 1973; the IBM 2984 was designed at the request of Lloyds Bank. The 2984 CIT (Cash Issuing Terminal) was the first true Cashpoint, similar in function to today's machines; Cashpoint is still a registered trademark of Lloyds TSB in the U.K. All were online and issued a variable amount which was immediately deducted from the account. A small number of 2984s were supplied to a US bank. Notable historical models of ATMs include the IBM 3624 and 473x series, Diebold 10xx and TABS 9000 series, and NCR 5xxx series. Its been 30 years since the patent for the first automated teller machine was issued. Yet the look and feel, as well as the core functionality of the ATM, remains largely unchanged since its introduction as an alternative to the branch for retail cash transactions. Indeed, the ATM can hardly be credited with aging gracefully.

The maturation of the ATM has been stunted by numerous technological and market forces in something of a chicken-or-egg quandary: Has the lack of sufficiently advanced technologies stymied the

development of more sophisticated ATMs, or has the lack of demand for more technological sophistication fated the ATM to fall short of its full potential?

DIMAT

-3-

Installation of ATMs in Various Places And Their Convenience To Users

These are among the questions that might be asked to understand why the ATM the most popular modern convenience second only to the personal computer (PC) remains the banking industrys most poorly leveraged technology asset.

Fortunately, a combination of business pressures, regulatory mandates, and open systems support may soon change that. Given this confluence of factors, a wave of next-generation ATMs is in the offing, and the ATM is now poised to reach its prime. This white paper explores these and other convergent forces that are altering the course of the ATMs evolution.

LOCATION
ATMs are placed not only near or inside the premises of banks, but also in locations such as shopping centres/malls, airports, grocery stores, petrol/gas stations, restaurants, or any place large numbers of people may gather. These represent two types of ATM installations: on and off premise. On premise ATMs are typically more advanced, multi-function machines that complement an actual bank branch's capabilities and thus more expensive. Off premise machines are deployed by financial institutions and also ISOs (or Independent Sales Organizations) where there is usually just a straight need for cash, so they typically are the cheaper mono-function devices. In Canada, when an ATM is not operated by a financial institution it is known as a "White Label ATM". Many ATMs have a sign above them indicating the name of the bank or organization owning the ATM, and possibly including the list of ATM networks to which that machine is connected. This type of sign is called a Topper.

FINANCIAL NETWORKS
Most ATMs are connected to inter-bank networks, enabling people to withdraw and deposit money from machines not belonging to the bank where they have their account or in the country where their accounts are held (enabling cash

DIMAT

-4-

Installation of ATMs in Various Places And Their Convenience To Users

withdrawals in local currency). Some examples of inter-bank networks include PULSE, PLUS, Cirrus, Interact and LINK. ATMs rely on authorization of a financial transaction by the card issuer or other authorizing institution via the communications network. This is often performed through an ISO 8583 messaging system. Many banks charge ATM usage fees. In some cases, these fees are charged solely to users who are not customers of the bank where the ATM is installed; in other cases, they apply to all users. Many people oppose these fees because ATMs are actually less costly for banks than withdrawals from human tellers. In order to allow a more diverse range of devices to attach to their networks, some inter-bank networks have passed rules expanding the definition of an ATM to be a terminal that either has the vault within its footprint or utilizes the vault or cash drawer within the merchant establishment, which allows for the use of a scrip cash dispenser. ATMs typically connect directly to their ATM Controller via either a dial-up modem over a telephone line or directly via a leased line. Leased lines are preferable to POTS lines because they require less time to establish a connection. Leased lines may be comparatively expensive to operate versus a POTS line, meaning lesstrafficked machines will usually rely on a dial-up modem. That dilemma may be solved as high-speed Internet VPN connections become more ubiquitous. Common lower-level layer communication protocols used by ATMs to communicate back to the bank include SNA over SDLC, TC500 over Async, X.25, and TCP/IP over Ethernet. In addition to methods employed for transaction security and secrecy, all communications traffic between the ATM and the Transaction Processor may also be encrypted via methods such as SSL.

DIMAT

-5-

Installation of ATMs in Various Places And Their Convenience To Users

GLOBAL USE
There are no hard international or government-compiled numbers totalling the complete number of ATMs in use worldwide. Estimates developed by ATMIA place the number of ATMs in use at over 1.5 million as of August 2006. For the purpose of analysing ATM usage around the world, financial institutions generally divide the world into seven regions, due to the penetration rates, usage statistics, and features deployed. Four regions (USA, Canada, Europe, and Japan) have high numbers of ATMs per million people and generally slowing growth rates. Despite the large number of ATMs, there is additional demand for machines in the Asia/Pacific area as well as in Latin America. ATMs have yet to reach high numbers in the Near East/Africa. While ATMs are ubiquitous on modern cruise ships, ATMs can also be found on some US Navy ships. In the United Kingdom, an ATM may be colloquially referred to as a "Cash-point", named after the Lloyds Bank ATM brand, or "hole-inthe-wall", an expression after which the equivalent Barclays brand was later named. In Scotland the term Cashline has become a generic term for an ATM, based on the branding from the Royal Bank of Scotland. In the Republic of Ireland, an ATM is commonly referred to as a "Bank-link", named after the Allied Irish Bank brand of machines. The slang term "Drink-link" is used to describe ATMs as they are very often used on nights out when extra cash is called for.

HARDWARE
An ATM is typically made up of the following devices: CPU (to control the user interface and transaction devices) Magnetic and/or Chip card reader (to identify the customer) PIN Pad (similar in layout to a Touch tone or Calculator keypad), often manufactured as part of a secure enclosure.

DIMAT

-6-

Installation of ATMs in Various Places And Their Convenience To Users

Secure crypto processor, generally within a secure enclosure. Display (used by the customer for performing the transaction) Function key buttons (usually close to the display) or a Touch screen (used to select the various aspects of the transaction). Record Printer (to provide the customer with a record of their transaction) Vault (to store the parts of the machinery requiring restricted access) Housing (for aesthetics and to attach signage to) Recently, due to heavier computing demands and the falling price of computerlike architectures, ATMs have moved away from custom hardware architectures using microcontrollers and/or application-specific integrated circuits to adopting a hardware architecture that is very similar to a personal computer. Many ATMs are now able to use operating systems such as Microsoft Windows and Linux. Although it is undoubtedly cheaper to use commercial off-the-shelf hardware, it does make ATMs vulnerable to the same sort of problems exhibited by conventional computers. Business owners often lease ATM terminals from ATM service providers such as United Cash Solutions.

VAULT
The vault of an ATM is within the footprint of the device itself and is where items of value are kept. Scrip cash dispensers do not incorporate a vault. Mechanisms found inside the vault may include: Dispensing mechanism (to provide cash or other items of value)

DIMAT

-7-

Installation of ATMs in Various Places And Their Convenience To Users

Deposit mechanism, including a Cheque Processing Module and Batch Note Acceptor (to allow the customer to make deposits) Security sensors (Magnetic, Thermal, Seismic) Locks: (to ensure controlled access to the contents of the vault) ATM vaults are supplied by manufacturers in several grades. Factors influencing vault grade selection include cost, weight, regulatory requirements, ATM type, operator risk avoidance practices, and internal volume requirements. Industry standard vault configurations include

Underwriters Laboratories UL-291 "Business Hours" and Level 1 Safes, RAL TL-30 derivatives, and CEN EN 1143-1:2005 - CEN III/VDS and CEN IV/LGAI/VDS. ATM manufacturers recommend that vaults be attached to the floor to prevent theft.

SOFTWARE
With the migration to commodity PC hardware, standard commercial "off-theshelf" operating systems and programming environments can be used inside of ATMs. Typical platforms used in ATM development include RMX, OS/2, and Microsoft operating systems (such as MS-DOS, PC-DOS, Windows NT, Windows 2000, Windows XP Professional, or Windows XP Embedded). Java, Linux and Unix may also be used in these environments. Linux is also finding some reception in the ATM marketplace. An example of this is Banrisul, the largest bank in the south of Brazil, which has replaced the MSDOS operating systems in its ATMs with Linux. Banco do Brasil is also migrating ATMs to Linux.

DIMAT

-8-

Installation of ATMs in Various Places And Their Convenience To Users

Common application layer transaction protocols, such as Diebold 911 or 912, IBM PBM, and NCR NDC or NDC+ provide emulation of older generations of hardware on newer platforms with incremental extensions made over time to address new capabilities, although companies like NCR continuously improve these protocols issuing newer versions (latest NCR Aptra Advance NDC Version 3.x.y (Where x.y are subversions). Most major ATM manufacturers provide software packages that implement these protocols. Newer protocols such as IFX have yet to find wide acceptance by transaction processors. With the move to a more standardized software base, financial institutions have been increasingly interested in the ability to pick and choose the application programs that drive their equipment. WOSA/XFS, now known as CEN XFS (or simply XFS), provides a common API for accessing and manipulating the various devices of an ATM. J/XFS is a Java implementation of the CEN XFS API. While the perceived benefit of XFS is similar to the Java's "Write once, run anywhere" mantra, often different ATM hardware vendors have different interpretations of the XFS standard. The result of these differences in interpretation means that ATM applications typically use a middleware to even out the differences between various platforms. Notable XFS middleware platforms include Triton PRISM, Diebold Agilis, CR2 BankWorld, KAL Kalignite, NCR Corporation Aptra Edge, Phoenix Interactive VISTAatm, and Wincor Nixdorf Protopas. With the move of ATMs to industrystandard computing environments, concern has risen about the integrity of the ATM's software stack. TOP 10 REASON WHY WINDOWS SOFTWARE IS USED IN ATM Windows offers a secure and robust platform that meets customer, site location, and ATM vendor requirements for 247 secure operation and automated error recovery.

DIMAT

-9-

Installation of ATMs in Various Places And Their Convenience To Users

More devices and drivers are available for Windows than any other OS, enabling ATMs to offer more features such as bulk cash acceptance, bar code reading, and intelligent check processing and imaging. The XFS standard was first introduced by Microsoft, whose CEN-XFS standard is the most widely deployed for the development and support of device-agnostic and vendor-independent ATM applications. Windows is highly compatible with other Web-based financial channels, increasing opportunities for the efficient re-use of existing software and skills while providing a broader range of services. Windows provides rich multimedia capabilities, such as sound files, in the widest variety of formats. Industry adoption of Windows translates to a widely accessible, highly skilled, and dynamic developer pool to support Windows-based ATMs. Windows developers possess unparalleled design and testing tools, improving productivity and efficiency, and making the ATM channel more cost effective and responsive to business needs. Windows supports the broadest range of management and administration solutions, bringing ATMs in line with other mission-critical devices across the enterprise. Plug -and-play devices and third-party components are widely available for Windows, enhancing the efficiency and business potential of ATMs. Windows supports integration across the most diverse range of management and transaction authorization systems, protecting investment in existing systems and technologies while providing a future-proofed platform for modern frameworks like Microsoft .NET, and value-added services like CRM (Customer Relationship Management).

DIMAT

- 10 -

Installation of ATMs in Various Places And Their Convenience To Users

SECURITY
Security, as it relates to ATMs, has several dimensions. ATMs also provide a practical demonstration of a number of security systems and concepts operating together and how various security concerns are dealt with. Early ATM security focused on making the ATMs invulnerable to physical attack; they were effectively safes with dispenser mechanisms. A number of attacks on ATMs resulted, with thieves attempting to steal entire ATMs by ram-raiding. Since late 1990s, criminal groups operating in Japan improved ram-raiding by stealing and using a truck loaded with a heavy construction machinery to effectively demolish or uproot an entire ATM and any housing to steal its cash. Another attack method is to seal all openings of the ATM with silicone and fill the vault with a combustible gas or to place an explosive inside, attached, or near the ATM. This gas or explosive is ignited and the vault is opened or distorted by the force of the resulting explosion and the criminals can break in. Modern ATM physical security, per other modern money-handling security, concentrates on denying the use of the money inside the machine to a thief, by means of techniques such as dye markers and smoke canisters. The security of ATM transactions relies mostly on the integrity of the secure crypto processor: the ATM often uses commodity components that are not considered to be "trusted systems". Encryption of personal information, required by law in many jurisdictions, is used to prevent fraud. Sensitive data in ATM transactions are usually encrypted with DES, but transaction processors now usually require the use of Triple DES. Remote Key Loading techniques may be used to ensure the secrecy of the initialization of the

DIMAT

- 11 -

Installation of ATMs in Various Places And Their Convenience To Users

encryption keys in the ATM. Message Authentication Code (MAC) or Partial MAC may also be used to ensure messages have not been tampered with while in transit between the ATM and the financial network. CUSTOMER IDENTITY There have also been a number of incidents of fraud where criminals have attached fake keypads or card readers to existing machines. These have then been used to record customers' PINs and bank card information in order to gain unauthorized access to their accounts. Various ATM manufacturers have put in place countermeasures to protect the equipment they manufacture from these threats. Alternate methods to verify cardholder identities have been tested and deployed in some countries, such as finger and palm vein patterns, iris, and facial recognition technologies. However, recently, cheaper mass production equipment has been developed and being installed in machines globally that detect the presence of foreign objects on the front of ATM's, current tests have shown 99% detection success for all types of skimming device. CUSTOMER SECURITY In some countries, multiple security cameras and security guards are a common feature. In the United States, The NY State Comptroller's Office has criticized the NY State Department of Banking for not following through on safety inspections of ATMs in high crime areas. Critics of ATM operators assert that the issue of customer security appears to have been abandoned by the banking industry; it has been suggested that efforts are now more concentrated on deterrent legislation than on solving the problem of forced withdrawals. At least as far back as July 30, 1986, critics of the industry have called for the adoption of an emergency PIN system for ATMs,

DIMAT

- 12 -

Installation of ATMs in Various Places And Their Convenience To Users

where the user is able to send a silent alarm in response to a threat. Legislative efforts to require an emergency PIN system have appeared in Illinois, Kansas and Georgia, but none have succeeded as of yet. ALTERNATIVE USES ATMs were originally developed as just cash dispensers; they have evolved to include many other bank-related functions. In some

countries, especially those which benefit from a fully integrated cross-bank ATM network (e.g.:

Multibanco in Portugal), ATMs include many functions which are not directly related to the management of one's own bank account, such as: Deposit currency recognition, acceptance, and recycling. Paying routine bills, fees, and taxes (utilities, phone bills, social security, legal fees, taxes, etc.) Printing bank statements Updating passbooks Loading monetary value into stored value cards Purchasing Postage stamps. Lottery tickets Train tickets Concert tickets Shopping mall gift certificates. Games and promotional features. Donating to charities Cheque Processing Module Adding pre-paid cell phone credit.

DIMAT

- 13 -

Installation of ATMs in Various Places And Their Convenience To Users

Increasingly banks are seeking to use the ATM as a sales device to deliver pre approved loans and targeted advertising using products such as ITM (the Intelligent Teller Machine) from CR2 or Aptra Relate from NCR. ATMs can also act as an advertising channel for companies to advertise their own products or third-party products and services. In Canada, ATMs are called Guichets Automatiques in French and sometimes "Bank Machines" in English. The Interact shared cash network does not allow for the selling of goods from ATMs due to specific security requirements for PIN entry when buying goods. CIBC machines in Canada are able to top-up the minutes on certain pay as you go phones. Manufactures have demonstrated and have deployed several different technologies on ATMs that have not yet reached worldwide acceptance, such as: Biometrics, where authorization of transactions is based on the scanning of a customer's fingerprint, iris, face, etc. Biometrics on ATMs can be found in Asia. Cheque/Cash Acceptance, where the ATM accepts and recognise cheques and/or currency without using envelopes Expected to grow in importance in the US through legislation. Bar code scanning On-demand printing of "items of value" (such as movie tickets, travellers cheques, etc.) Dispensing additional media (such as phone cards) Co-ordination of ATMs with mobile phones Customer-specific advertising Integration with non-banking equipment

WHY ATM
Consumer is king! For strategist at banking companies, it is important that any innovation or new technology satisfies the need of consumers. It is also important that

DIMAT

- 14 -

Installation of ATMs in Various Places And Their Convenience To Users

they try to fulfil the criteria, needs or objectives (these terms will be used interchangeably) that the consumers hold important. We assume that this is the guiding philosophy that banking companies employ. Thus, we set out the following criterion which serve as guiding objectives for banking companies and parallel the criteria important for consumers: Technological Innovation: The fundamental of change is technological innovation. Technology plays an important role in change and has significantly shaped banking and commerce. This criterion was selected because consumers constantly demand new and better products and services. This can only be fulfilled by technological innovation. Security and Privacy: This is perhaps one of the most important criteria both from the consumer and from banking companys perspective. The consumer has to be confident that any new innovation will be safe and secure. For ATM banking, security means that consumers data is confidential and the risk of fraud is reduced. This criterion was selected because security is a common and most important concern of consumers as determined by market survey and research. Reliability: Reliability is important to ensure that users trust the new technology and it is widely adopted. For ATMs, reliability means that the uptime should be quite high and they should have adequate cash to dispense. This criterion was selected because any technological innovation has to be reliable to ensure its success. Accessibility: Accessibility helps ensure that all consumers are able to easily access and take advantage of the new technology. For ATMs, accessibility means that they are user friendly and even handicapped users are able to use them. Location is also a consideration in accessibility.

DIMAT

- 15 -

Installation of ATMs in Various Places And Their Convenience To Users

This criterion was selected because not only do new technologies have to be user friendly but also are required by law to be accessible to the handicapped. Convenience: Ultimately, a new technology will not be successful if consumers do not find it convenient. For ATMs, convenience means that it is fast, efficient and flexible. This criterion was selected because convenience is the fundamental criteria behind the adoption and success of a new technology. Enhanced Services: This criterion that helps distinguish the new technology. For ATMs, this means that they should provide enhanced services apart from dispensing cash. This criterion was selected because ATMs are moving beyond their traditional role. By incorporation new functions, ATMs are evolving to take up a broader role and satisfy the needs of the consumer. Coming full circle, banks are once again revisiting non-traditional ATM-based services. For instance, several banks now enable their customers to deposit funds in check form into linked brokerage accounts at participating ATMs. Clearly, banks must take a cautious approach when introducing new services to ensure that they reasonably map to consumer demand. But why is it that, with corporate and consumer budgets more constrained than they were during the stock market and Internet boom, banks are under more pressure than ever to extend their core ATM capabilities?

NEW BUSINESS AND REGULATORY REQUIREMENTS


For one thing, intensified global economic and business forces have placed extraordinary pressure on banks to remain competitive, increase customer loyalty, and improve the efficiency and profitability of their ATM networks. These pressures are compounded by the fact that, given aging legacy systems and rapid consolidation in recent years, banks now manage an increasingly complex hodgepodge of vertically siloed technologies.

DIMAT

- 16 -

Installation of ATMs in Various Places And Their Convenience To Users

For the majority of banks, the ATM remains a forgotten channel, isolated from the banks other more feature-rich delivery channels. Yet despite the growth of online banking and PIN-based payment services, ATMs are unlikely to go away any time soon. Physical transactions are simply unsupported by the newer channels. So banks are keeping a watchful eye on potential threats to their existing business models while evaluating ways to re-architect the ATM to maximize its revenue-generating potential.

Several pending regulations are also compelling banks to provide enhanced ATM capabilities. The Check Clearing for the 21st Century Act, signed into law in October 2003, will eliminate the need to process a physical check. Only the checks scanned information will need to clear before funds are automatically credited at the ATMa tremendous added convenience for consumers. At the same time, nearly twothirds of branch transactions are currently check-related, according to Tower Group. So leveraging ATM-based check imaging to replace more costly teller services could yield significant cost savings for banks. On top of these benefits, check-imaging complies with the global financial industry trend toward more efficient, fully automated straight-through processing (STP), as well as the imminent Basel II Accord, which mandates improved operational risk management.

Other industry mandates address the need for enhanced ATM security, as well. For example, American Disabilities Act (ADA) draft guidelines released in 2002 mandate that ATMs be accessible to the visually impaired. Title V of the GrammLeach-Bliley Act of 1999 imposes regulatory safeguards on banks to protect against unauthorized systems access resulting in harm or inconvenience to customers. And to combat online fraud and PIN-related theft, MasterCard and Visa require that, by April 1, 2005, all ATMs tied to their networks be equipped with triple DES-enabled (TDES) PIN pads.

It is unclear how legacy operating systems will support these mandates and guidelines. Because of them, massive ATM hardware and systems upgrades and replacements will be required. But as it stands, most ATMs particularly those tied to

DIMAT

- 17 -

Installation of ATMs in Various Places And Their Convenience To Users

older technologies are unequipped to meet the new business and regulatory requirements.

RELIABILITY
Before an ATM is placed in a public place, it typically has undergone extensive testing with both test money and the backend computer systems that allow it to perform transactions. Banking customers also have come to expect high reliability in their ATMs, which provides incentives to ATM providers to minimize machine and network failures. Financial consequences of incorrect machine operation also provide high degrees of incentive to minimize malfunctions. ATMs and the supporting electronic financial networks are generally very reliable, with industry benchmarks typically producing 98.25% customer availability for ATMs and up to 99.999% availability for host systems. If ATMs do go out of service, customers could be left without the ability to make transactions until the beginning of their bank's next time of opening hours. Of course, not all errors are to the detriment of customers; there have been cases of machines giving out money without debiting the account, or giving out higher value notes as a result of incorrect denomination of banknote being loaded in the money cassettes. Errors that can occur may be mechanical (such as card transport mechanisms; keypads; hard disk failures); software (such as operating system; device driver; application); communications; or purely down to operator error. To aid in reliability, some ATMs print each transaction to a roll paper journal that is stored inside the ATM, which allows both the users of the ATMs and the related financial institutions to settle things based on the records in the journal in case there is a dispute. In some cases, transactions are posted to an electronic journal to remove the cost of supplying journal paper to the ATM and for more convenient searching of data.

DIMAT

- 18 -

Installation of ATMs in Various Places And Their Convenience To Users

Improper money checking can cause the possibility of a customer receiving counterfeit banknotes from an ATM. While bank personnel are generally trained better at spotting and removing counterfeit cash, the resulting ATM money supplies used by banks provide no absolute guarantee for proper banknotes, as the Federal Criminal Police Office of Germany has confirmed that there are regularly incidents of false banknotes having been dispensed through bank ATMs. Some ATMs may be stocked and wholly owned by outside companies, which can further complicate this problem. Bill validation technology can be used by ATM providers to help ensure the authenticity of the cash before it is stocked in an ATM; ATMs that have cash recycling capabilities include this capability. A growing customer base, along with increased use of bank locations were the key drivers that helped identify the need for having automated tellers. This was the foremost requirement for convenience and it was just the beginning. As banks started installing ATMs, people soon realized how convenient it became to go by and deposit/withdraw money. The clear advantage was the convenience of getting access to cash on holidays and even after-hours when banks would be closed. With the networking between banks across the country, another positive outcome was for travellers who could easily go to a nearby ATM and withdraw cash during their travels. At the same time benefits were reaped by the banks since they were able to reduce manned counters at various banking locations and provide increased convenience and flexibility to the customers. When ATMs malfunction, computer networks recognize the problem and alert repairers. Common problems include worn magnetic heads on card readers, which prevent the equipment from recognizing customers bankcards, and pick failures, which prevent the equipment from dispensing the correct amount of cash. Today, ATM uptimes are generally high and the best availability is often defined as 98.25 percent. NCR solutions makes a mention that even a one percent increase in availability can increase the uptime by almost 4 days in a year. According to U.S. Department of Labour, Improvements in ATM

DIMAT

- 19 -

Installation of ATMs in Various Places And Their Convenience To Users

design have increased reliability and simplified repair tasks, reducing the number and extent of repairs.

FRAUD
As with any device containing objects of value, ATMs and the systems they depend on to function are the targets of fraud. Fraud against ATMs and people's attempts to use them takes several forms. The first known instance of a fake ATM was installed at a shopping mall in Manchester, Connecticut in 1993. By modifying the inner workings of a Fujitsu model 7020 ATM, a criminal gang known as The Bucklands Boys were able to steal information from cards inserted into the machine by customers. In some cases, bank fraud could occur at ATMs whereby the bank accidentally stocks the ATM with bills in the wrong denomination, therefore giving the customer more money than should be dispensed. The result of receiving too much money may be influenced on the card holder agreement in place between the customer and the bank. In a variation of this, WAVY-TV reported an incident in Virginia Beach of September 2006 where a hacker who had probably obtained a factory-default admin password for a gas station's white label ATM caused the unit to assume it was loaded with $5 USD bills instead of $20s, enabling himselfand many subsequent customersto walk away with four times the money they said they wanted to withdraw. ATM behaviour can change during what is called "stand-in" time, where the bank's cash dispensing network is unable to access databases that contain account information (possibly for database maintenance). In order to give customers access to cash, customers may be allowed to withdraw cash up to a certain amount that may be less than their usual daily withdrawal limit, but may still exceed the amount of available money in their account, which could result in fraud.

DIMAT

- 20 -

Installation of ATMs in Various Places And Their Convenience To Users

RELATED DEVICES
A Talking ATM is a type of ATM that provides audible instructions so that persons who cannot read an ATM screen can independently use the machine. All audible information is delivered privately through a standard headphone jack on the face of the machine. Alternatively, some banks such as the Nordea and Swedbank use a built-in external speaker which may be invoked by pressing the talk button on the keypad. Information is delivered to the customer either through pre-recorded sound files or via text-to-speech speech synthesis. A postal interactive kiosk may also share many of the same components as an ATM (including a vault), but only dispenses items relating to postage. A scrip cash dispenser may share many of the same components as an ATM, but lacks the ability to dispense physical cash and consequently requires no vault. Instead, the customer requests a withdrawal transaction from the machine, which prints a receipt. The customer then takes this receipt to a nearby sales clerk, who then exchanges it for cash from the till. A Teller Assist Unit may also share many of the same components as an ATM (including a vault), but they are distinct in that they are designed to be operated solely by trained personnel and not the general public, they do not integrate directly into interbank networks, and are usually controlled by a computer that is not directly integrated into the overall construction of the unit.

GROWTH OF ATM IN INDIA


10 years ago, an ATM was a novelty in Indian bank branches. But with the entry of aggressive private sector banks, ATMs have mushroomed in the urban Indian landscape. Srikanth RP and Rajneesh De analyse the ATM explosion in India and say that newer uses for ATMs will see growth shoot up even further Banking in India has come a long way thanks to a combination of factors like increasing consumer awareness, technological advancement, as well as the growing

DIMAT

- 21 -

Installation of ATMs in Various Places And Their Convenience To Users

financial muscle of our populace. Even the acclaimed Rip Van Winkles of the Indian financial industry the PSU banks are moving up another gear in embracing technological innovation. One such innovation is the Automated Teller Machine (ATM), todays most preferred mode of delivery channel in all FIs. Banks like ICICI Bank, UTI Bank and HDFC Bank all deploy ATMs aggressively and have seen their customer base swell. Subsequently, even PSU banks have followed suit with an increasing number of ATMs. GLOBAL PERSPECTIVE But how does India stand against the rest of the world in ATM installations? World ATM installations are set to rise by 45 percent over the next few years till 2004, according to a new report by Retail Banking Research. Currently there are over 800,000 machines operating worldwide and this figure will rise to over 1,150,000 by 2004. Of the global figure, the largest market was Asia-Pacific which accounted for 253,000 installations, nearly a 32 percent global share. Of these machines, the majority 142,500 were in Japan. North America has become the second largest region with 221,000 machines. Western Europe has fallen to third position with 219,000 ATMs. Both regions each hold over 27 percent of the world total. During the past two years Latin America has significantly increased its share in the world market and now has 82,500 installations, over 10 percent of the global total. There are a further 14,500 machines in the Middle East and Africa. Finally, the emerging markets of Eastern Europe account for 11,500 terminals. Looking forward, the USA will still lead the rankings in ATM installations in 2004. However China seems likely to rise into fourth position by 2004. In terms of growth in installations the picture is very different. India, Bulgaria, Egypt and Bolivia will show dramatic increases in their installed base. However developments in recent years in some countries, such as Russia and Indonesia, mean that future growth is well below what was forecast earlier in the decade.

DIMAT

- 22 -

Installation of ATMs in Various Places And Their Convenience To Users

PSU BANKS-IN THE DRIVERS SEAT Market analysts believe that the growth in the installed base of ATMs, which was primarily driven by private sector banks, will be driven by Indian PSU banks in the next year. The number of ATMs is predicted to reach 30,000 units within seven years, from the current installed base of around 4,500. The retail-banking scene is getting hotter by the day with banks going all out to increase access points. This is great news for ATM majors like NCR India and HMA Diebold which are fighting aggressively to increase market shares. At stake is a pie of Rs 250-270 crore, which is expected to grow exponentially at a growth rate of over 100 percent. Ironically, the introduction of ATMs in India was not warmly welcomed by the various labour unions. But now, you can witness ATMs everywhereright from Gobichettipalayam, a southern most town of Tamil Nadu to Hazaribagh in Jharkhand. Says Srinivas Rao, business head with the Self-Service Solution at NCR India, With PSU banks going all out to tap the retail market through ATMs, the market is ready to explode. We are extremely bullish on the Indian market and are witnessing growth rates of over 100 percent. Agrees Harish Murthi, managing director, Diebold HMA, There has been tremendous growth in the last few years. In the years 2000 and 2001, the market has grown by a whopping 100 percent over the previous year. We expect it to grow at a rate of 80 percent annually in the next couple of years. That India is a boom country for ATMs is corroborated by a report from the Global ATM Directory 2000 edition which states that the Indian market for ATMs is expected to grow at an estimated growth rate of 486 percent, while Chinas growth has been pegged at just over 200 percent. Rao cites the case of China where the installed ATM base currently stands at 26,000, up from 1,600 eight years ago. ATM vendors are comparing India as the next China, and are expecting similar growth in India. Explains Rao, Every technology takes time to get accepted. It is no different with ATMs. For example, in China during the years 1982-1993, there were only 2,000 ATMs. But during the years, 1993-2000, it boomed to over 48,000 ATMs. India too is witnessing a similar trend.

DIMAT

- 23 -

Installation of ATMs in Various Places And Their Convenience To Users

Adds Murthi, Unlike China, the reach of the banks is wider in India. Even in the most remote village of India, a public sector bank can be found. However, population-wise the reach of banks is limited. The amount of banks catering vis--vis 100 people would be lower than many developed countries. In such a scenario, ATMs come as a boon. Hence there is a definite possibility of India growing over China in the ATM market. WINNING STRATEGIES In a move to earn greater revenues, every vendor worth his salt is trying out innovative strategies. For example, Diebold HBA offers a total managed service called Total Implementation Solution (TIS). This gives banks a single window for procuring all their ATM related needs. The basket of solutions includes ATM monitoring, software distribution for ATMs, cash management and network management. Many Indian banks that were hampered because of lack of knowledge of technology are now actively talking to ATM vendors for outsourcing their needs. For example, Bank of India recently signed an agreement with India Switch Company, a Diebold HMA group company, for outsourcing the setting up of ATMs. Other banksespecially PSU and co-operative banksare expected to follow this trend. Rival NCR too has concentrated its energies on offering specialised solutions besides the usual strategy of providing and maintaining ATMs. Explains Rao, Our ATM models in India range from simple cash dispensers to scalable ATMs that can be customised according to individual client requirements. We also offer specialised models that dispense information and non-cash items such as tickets and coupons. As part of its strategy in offering innovative services, NCR is talking to the Railways in Mumbai for deploying an ATM which could be used to dispense railway tickets. The focus is on letting the customer use the ATM as a medium which can be used for non-cash transactions like payment of bills, insurance payments, printing of statements or accessing the Internet. Adds Rao, The key idea is to get the customer used to these channels and then migrate him to different low cost channels like the

DIMAT

- 24 -

Installation of ATMs in Various Places And Their Convenience To Users

Internet. For example, a customer using a Web-enabled ATM would be more likely to go in for, say, a service like Internet banking. Also, from the banks point of view this would be more cost effective as a transaction over the Internet would only cost the bank approximately Rs 10-12 per transaction. NCR is also looking at offering solutions that can bundle the ATM with the smart card. For example, the value of a Petrocard (a smart card with stored value used in petrol stations) would double if the Petrocard user has the option of topping up the pre-paid value of the card via an ATM. This option would give the customer better flexibility. Adds Piyush Khaitan, VP, Venture Infotek, The trend now is to use the ATM as a tool to acquire new customers and retain them by providing a range of services. Banks are slowly waking up to the ATMs potential as a serious marketing tool. They are also earning sizeable revenues by using ATMs to advertise products from other companies. A few banks are offering utility bill payment facilities on their machines too. Apart from that, a variety of services ranging from railway card/season tickets and cinema tickets to dispensing of mobile phone smart cards are being thought of as a part of the strategy to attract customers and earn extra revenue. Another unique strategy from NCR is the installation of local language ATMs which are available in almost all Indian languages. In rural areas for example, some farmers are extremely rich but do not have access to ATMs. How do banks reach out to such people? The answer is in the form of intelligent ATMs. Besides, an illiterate person would not be able to use an ATM, whichever language it displays. The answer is an ATM that offers an audio aid which has clear instructions on how to withdraw cash in the language he speaks. VISIBLE TRENDS Explains Rao, We are seeing two distinct trendsstate-run banks are installing ATMs to ensure that they do not lose customers, and to cut costs, while private and foreign-owned banks are using it to acquire customers. This does not

DIMAT

- 25 -

Installation of ATMs in Various Places And Their Convenience To Users

mean that the cost-factor is not relevant to the latter. Again, of the installed ATM base, nearly 70 percent is accounted for by private and foreign players. We also see that state-run entities have more of onsite ATMs. Adds Mani Mamallan, senior vice president, India Switch Company, ATMs have evolved from only basic cash dispensing solutions to one which can provide value added services. The future of ATMs will be touch-screen kiosks, payment of bills, and smart cards bundled in with ATMs. Other factors like non-banks setting up ATMs, when that is allowed, will also offer buoyancy to the market. This segment is closed as there is a central banking regulation that prevents it from happening. But both Murthi and Rao feel that the entry of non-bank players, as and when it happens, will lead to an exponential growth in ATMs. LOCAL CHALLENGERS Though the market is currently dominated by Diebold HMA and NCR, local players like Tata Infotech are also trying to get a foothold in the Indian ATM landscape. Says Zakir Hussain, national manager for marketing at Tata Infotech, Looking at the huge demand for ATMs in India, our ATM initiative, which started off as an export commitment, has now been expanded to the domestic market. Tata Infotech is one in a rare club because unlike the others, it does not import ATMs but manufactures them itself. Tata Infotech too offers a full range of solutions to the customer, which cover the gamut of cash dispensers and ATMs. The companys own software group ensures that the necessary software is provided to help the banks integrate their back-end banking software. Then there are solution providers like Venture Infotek who provide solutions that start from ATM site preparation to the entire backend management of the ATM business. Says Udai Singh Pathania, president and head, financial institutional business, Venture Infotek, Being a transaction processing company we are looking at the networking and running of the ATM business rather then the sales of ATM units. He is also planning to tie up with strategic ATM manufacturers to specifically target

DIMAT

- 26 -

Installation of ATMs in Various Places And Their Convenience To Users

co-operative banks who he feels will be one of the major upcoming players in this segment. These banks do not have the financial muscle of the other MNC or private banks and very few of them can afford to invest in technology. We would also be focusing on interconnecting these banks ATMs. This will help co-operative banks to offer their customers the facility of transacting on any ATM on Ventures network, he adds. Venture Infotek recently implemented a turnkey ATM solution project for BNP Paribas, wherein their entire ATM services was outsourced by the bank to the company. SUCCESS STORIES ICICI Bank is one bank which has seen a massive surge in volumes, since the introduction of ATMs. The number of ATMs, which numbered around 90 in December 1999, has now swelled to 540. Currently, the total volume of ATM transactions is pegged at an astronomical 2,00,000 transactions a day. Says P K Vohra, joint president, ICICI Infotech Services, The larger the volume of transactions, the less the cost per transaction. Also, the convenience of anytime money has attracted a lot of customers, and the bank has seen its customer base swell three-fold from 6.5 lakh in March 2000 to 20 lakh in March 2001. ICICI has also shown how technology can translate into reduced costs. Typically, a transaction through a bank branch costs approximately Rs 45. The same transaction done telephonically costs Rs.30, through an ATM costs about Rs.18, and through the Internet in huge volumes, only Rs.4. Just a look at the volumes of transactions done at the ICICI ATMs indicates the high level of success the project has seen. EXISTING BOTTLENECKS But in spite of all the positive signals, there are problems galore, which if not set right, can come in the way of ATM growth rates in India. One is the familiar infrastructure problem. Other problems are issues like obtaining many different permissions from different authorities like the municipal authorities, building society permission, permission for locating VSATs on top of a building, obtaining permission from the local telecom provider, etc. The rapid deployment of ATMs earlier was

DIMAT

- 27 -

Installation of ATMs in Various Places And Their Convenience To Users

because of the fact that there was no permission required from the Reserve Bank of India. But today this is mandatory. Industry experts point out that this was done because there were a lot of banks which set up ATMs without adequate funds. The RBI wanted to check the status of banks before allowing them to set up ATMs. Most banks today are looking at ATMs not only as a delivery channel that bring in customers in droves but also significantly reduce transaction costs. But, whatever forms the ATM assumes in future, one thing cannot be ignored by any bank the fact that ATMs have come to stay.

LIST OF BANKS PROVIDING ATM FACILITIES IN INDIA


India is one of the fastest growing economy in the world. Adoption of new economic policies in the country has given immense opportunities to develop the country. The financial market reforms have led the foreign banks to operate in India. The given list follows the list of banks operating in India. This list includes both the Nationalized as well as the private banks. Here we have given the list alphabetically. Allahabad Bank Andhra Bank Bank of Baroda Bank of India Bank of Madura Bank of Maharashtra Bank of Punjab Banque Nationale De Paris Canara Bank Central Bank of India Centurion Bank Limited Centurion Bank Cipher Securities (India) Pvt. Ltd. Citibank Corporation Bank

DIMAT

- 28 -

Installation of ATMs in Various Places And Their Convenience To Users

Cosmos Bank Dena Bank Development Credit Bank EXIM Bank of India Export Import Bank of India Federal Bank Limited Global Trust Bank HDFC Bank Ltd. Haryana State Cooperative Apex Bank Limited (HARCOBANK) ICICI Bank IDBI Bank Indian Bank. Indian Bank's Association (IBA) Indian Overseas bank IndusInd Bank Ltd Industrial Development Bank of India Industrial Investment Bank of India Ltd. (IIBI) Institute for Development and Research in Banking Technology (IDRBT) Jammu & Kashmir Bank. Jammu and Kashmir Bank Ltd. Kalyan Bank. Kapol Co-operative Bank Ltd. Lakshmi Vilas Bank North Eastern Development Finance Corporation (NEDFI) Mandvi Co-operative Bank Ltd. National Bank for Agriculture & Rural Development. National Housing Bank Oriental Bank of Commerce Punjab National Bank Punjab and Maharashtra Co-operative Bank Pvt. Ltd. Punjab and Sind Bank Ratnakar Bank Ltd.

DIMAT

- 29 -

Installation of ATMs in Various Places And Their Convenience To Users

Reserve Bank of India Saraswat Co-operative Bank Ltd. Saraswat Co-operative Bank Ltd. SBI Capital Markets Limited Small Industries Development Bank of India State Bank of Hyderabad State Bank of India State Bank of Indore State Bank of Mysore State Bank of Saurashtra State Bank of Travancore Syndicate Bank UCO Bank Union Bank of India Unit Trust of India United Bank Of India (UBI) Vijaya Bank

THE FUTURE ATMS


ATMs are becoming an integral part of modern lifestyle. The Star survey noted that approximately 80% of consumers have been provided an ATM card by their bank or credit union. Tomorrows ATMs will not only need to satisfy the criteria that have been important for consumers but also new criteria which are becoming important. The two most important objectives are: SECURITY AND PRIVACY The Star survey noted that security and ATM fraud was an important concern for consumers. Almost 1/4th of users said that they were extremely concerned about ATM fraud regardless of their ATM usage. APACS is a non-statutory Association of institutions delivering payment services to end customers. APACS confirms ATM

DIMAT

- 30 -

Installation of ATMs in Various Places And Their Convenience To Users

fraud to have risen 37 per cent in the past year, to GBP 29.1 million, up from GBP 21.1 million. 12 Concern about security and the increasing incidence of fraud have been elucidated in the following quote from a Celnet report, a research firm focused on IT in financial services. Even though statistics may suggest that banks have been successful in preventing fraud, advances in technology are equipping criminals with clever ways to outwit the system. Schemes like skimming and Lebanese Loops continue to threaten ATM owners. There is a greater reliance on hi-tech gadgets such as micro cameras for capturing data rather than any impersonation of card holders. But more important is the lack of proper authentication at the ATM and the doorway it could potentially open for criminals. It is therefore no surprise that consumers are very concerned about fraud and security aspects of ATM banking. ENHANCED SERVICES As ATMs are now widely prevalent, it is natural that the focus shifts to enhanced services. Consumers want the ability to do more than just withdraw cash from ATMs. From the ability to make deposits anywhere to complete banking solutions like Traveler Checks and drafts to retail solutions like ticketing, the future is about expanding the role and scope of ATMs. Many of these services are all ready being developed. Bank of America is experimenting with ATMs that show consumer a scanned image of their deposited checks and gives them a printed copy. Some ATMs are also providing ticketing solutions and ability to purchase stamps. Visa electron is experimenting with technology in Asia and Europe that allows an ATM user to transfer money to another ATM users account. The Star survey asked consumers to rank future services which they find extremely appealing:

DIMAT

- 31 -

Installation of ATMs in Various Places And Their Convenience To Users

SYNERGY The future of ATMs will depend on technology is integrated with different aspects of ATM to fulfil the needs of consumers. Most important among them are are security, privacy and enhanced services. Much of these criteria overlap with each other. For example, the demand for security requires new technology and encryption methods. Use of smart cards will not only provide better security to consumers but also added convenience as it has the potential to be a single identification card. BASIC DESIGN AND NETWORKING Improvement in networking technology and sophisticated encryption methods will lead to greater security and better privacy protection. It will also enable many enhanced services. Along with this, ATMs are moving away from regular circuit boards and into full-fledged PCs with standard operating systems such as Windows and Linux. One of the examples of ATMs changing operating systems is Banrisul, the largest bank in the south of Brazil, which has replaced the MS-DOS operating systems in its ATMs with Linux. The new operating systems such as Windows XP and XP embedded are now being installed on the more recent ATMs. More ATMs are beginning to use dedicated high-speed Internet connections, which are much cheaper than leased lines. Encryption, required by law in the United States, is also used to prevent theft. Interoperability and Communication Standards With banks expanding their global operations, interoperability has become a common issue to ensure that different operating systems and messaging capabilities can be managed using the same back-end source. According to a study by ACI Worldwide, the XML-based Interactive Financial exchange (IFX), for example, is now recognized as the standard messaging format for bank/ATM interfaces. Previously each manufacturer used proprietary messaging formats, limiting banks choice of

DIMAT

- 32 -

Installation of ATMs in Various Places And Their Convenience To Users

ATM model. 15 At the interface end, IFX will radically improve banks freedom as to how the ATM screen appears to the customer. SMART CARDS Smart cards have not only the potential to increase security but also replace multiple ids with one single id. Smart cards are slowly replacing magnetic stripe cards as they are much more secure. They reduce the chances of card skimming which allows a criminal to copy the data off a magnetic stripe card and make duplicates.16 Not only are smart cards more secure, but they also have the ability to store more data. Imagine the convenience of having all your banking information on one card. Consumers can use one single card for all purposes such as Drivers license, ATM access, Insurance information and even banking. An upcoming technology is wireless smart cards. They do not require physical contact with readers and eliminate the need to swipe cards. This increases convenience and enables faster transactions. BIOMETRIC SOLUTIONS The future might not require consumers to remember a PIN or carry a card. Instead, ATMs might have fingerprint scanners or retina scanners which verifies the identity of the consumer.17 NCR corporation is already introducing self service banking at the touch of a fingerprint in Chile and Columbia.18 Biometric identification will be an enormous leap in security and go a long way to prevent fraud. However, there is some doubt regarding the comfort of consumers with biometric banking. OTHER BANKING SERVICES AND CUSTOMIZATION Consumers do not want to be limited to withdrawing cash at the ATM. They also want the ability to make deposits at any ATM and buy banking products like stamps, drafts and travellers checks. Future ATMs might also give consumers the ability to trade stocks and even open new accounts.

DIMAT

- 33 -

Installation of ATMs in Various Places And Their Convenience To Users

Customized user experience is also currently available on the internet. A user can customize frequently used features of ATM making it more user-friendly. The future holds greater ability to customize and personalize the ATM experience. Other Services and Retail Solutions In the future ATM will offer not just banking services. Increasing number of consumers can access other financial services and even non-banking products. The main highlights are: Availability of funds in different currencies all over the world. Use of single card for all purposes such as Drivers license, ATM access, Insurance information etc enables greater services. ATMs can be used for corresponding services such as renewing license plates, making appointment with a nearby doctor etc. Service oriented facilities such as internet portals, on-demand telephone facility Retail facilities like the ability to purchase tickets and gift cards. There have been plans to merge an ATM with a vending machine. Perhaps in the future consumers might even be able to buy a bottle of coke at the ATM.

BEWARE OF ATMS
As per banks, ATMs are secure and your account is in trustworthy hands. But this is a myth promulgated by banks. This was true a decade ago, but with the advance in technology your funds in the bank can disappear through ATMs. Technology is now available such as skimming, remote cameras etc. to steel your Card details, PIN etc. whereby criminals can get your card details and PIN numbers without your knowledge. According to banks (as printed in their brochure) your accounts are secure "if card details acd PIN numbers are not disclosed". This is absolutely incorrect. You could lose all your investment overnight through fraud at ATMs. If you want to know

DIMAT

- 34 -

Installation of ATMs in Various Places And Their Convenience To Users

more about this go to www.google.com, enter ATM fraud in the search column and press Enter key. You can see the worldwide fraud at ATMs. Technology for preventing this is available, but the banks still insist that your funds are secure "if Card details and PIN number are not disclosed". This is just a myth spread by banks. People have lost huge amounts from ATMs. So be very careful and alert in use of ATMs. May be the banks will wake up one of these days. Most ATMs dont even have guards, CCTV or burglar alarms. "Prevention is better than cure".

TIPS FOR ATM OPERATION


Are you having an ATM card or Debit / credit card: If you are using these electronic cards you have to take the following precautions: Automated Teller Machines (ATMs) have made our lives easier. If you forgot to go to the credit union before closing time to get money, no problem. Just zip into one of the ATMs and access the money in your checking or savings account day or night. But wherever youre at, be aware of your surroundings and use safety precautions when using an ATM or debit card. PULSE, the nations leading independent financial industry-owned electronic funds network, offers some safety tips when using an ATM. Even though youve heard them before, remember the old adage: an ounce of prevention Observe the surroundings at the ATM location before conducting a transaction. Block the view of others when using an ATM to make sure they cannot see your Personal identification Number (PIN). Look for possible fraudulent devices attached to an ATM. If anything looks suspicious, use another machine. Never allow a cashier or any other person to enter your PIN for you. Have your card ready to minimize the time you spend at an ATM. When using a drive-up ATM after dark, keep your car doors locked, passenger windows rolled up and headlights on when conducting your transaction.

DIMAT

- 35 -

Installation of ATMs in Various Places And Their Convenience To Users

If using an ATM at night, try to take someone with you. Check your ATM receipts against your monthly credit union statements, just as you do your cancelled checks. Dont store the magnetic strip on the back of your ATM card against the magnetic strip of another credit card in your purse or wallet. It will corrupt the strip and make your card unusable. If you see overgrown shrubbery, poor lighting or other potential hazards at your credit unions ATM, report it to your credit union immediately. Your ATM card is the same as cash, so make sure you keep it in a safe place. Keep your PIN a secret and dont disclose confidential information about your card over the telephone or the Internet. By following these precautions and using common sense, you can enjoy this convenience without becoming the latest crime statistic.

EXECUTIVE SUMMARY
Its been 30 years since the patent for the first automated teller machine was issued. Yet the look and feel, as well as the core functionality of the ATM, remains largely unchanged since its introduction as an alternative to the branch for retail cash transactions. Indeed, the ATM can hardly be credited with aging gracefully.

The maturation of the ATM has been stunted by numerous technological and market forces in something of a chicken-or-egg quandary: Has the lack of sufficiently advanced technologies stymied the development of more sophisticated ATMs, or has the lack of demand for more technological sophistication fated the ATM to fall short of its full potential?

These are among the questions that might be asked to understand why the ATMthe most popular modern convenience second only to the personal computer (PC) remains the banking industrys most poorly leveraged technology asset.

Fortunately, a combination of business pressures, regulatory mandates, and open systems support may soon change that. Given this confluence of factors, a wave

DIMAT

- 36 -

Installation of ATMs in Various Places And Their Convenience To Users

of next-generation ATMs is in the offing, and the ATM is now poised to reach its prime. This white paper explores these and other convergent forces that are altering the course of the ATMs evolution.

The future will be about enhanced services, greater security and synergy. Consumers will be able to access a greater number of services at the ATM machine. By combining ATMs with retail solutions like ticketing and innovative technology like smart cards, ATMs have the potential to transcend the boundary of providing financial services alone and becoming complete one stop solution machines for consumers.

CONCLUSION
Most of the private sector bank which is providing the customer value added services. They are not only able to satisfy the customer but they are successful in building a never-ending relationship with the customer. They are able to retain them and carry business with them to benefit both the organisation and the customer. Customer preferences and needs are very well understood by this bank. With the help of technology they are able to develop brand equity in the market and differentiate themselves from the competitors. Bank is an live example for the public sector banks to understand the needs of the customer and change themselves to satisfy most of the customer most of the time. It is very necessary to integrate the needs of the customer with the technology and continuously monitor the same. It also necessary to upgrade the system from time to time. Even as the Indian IT community ushered in the year 2000, a steady and silent revolution on the e-commerce front failed to catch much attention. On the 19th of January 2000, a click and mortar made an announcement that offered a clear but early measure of the impact of the "e" in e-business. On that day the Banks released performance figures related to its previous years dotcom initiatives. The company reported a staggering 500% increase in Internet customers during the period from

DIMAT

- 37 -

Installation of ATMs in Various Places And Their Convenience To Users

March 31, 1999 to December 31, 1999 from 4000 to 24,000 customers in 9 months. While the absolute number of 24,000 or the growth of 500% might not mean much, it does speak volumes of the nascent potential. Banks as a whole has been striding purposefully down the e-pathway. The group prefers to call it a "clicks and bricks" strategy that provides multiple access points to its customers. For its traditional customers there are the lean and mean brick and mortar branches propped by ATMs, call centres and direct selling agents. Internet banking and WAP enabled services take care of the yappy and technology savvy professionals of today. The rise in Internet banking customers is a result of the Infinity, Internet banking facility launched by the bank. The facility, initially made available to NRIs and later to resident Indians permits online opening of accounts, bills payment, account information. Call centres are certainly juggling some interesting numbers. Its Bombay call centre handles 25 different products, for 10 million customers, with 620 positions. Two years ago, before its current call centre operations had been established, 97 per cent of customer transactions took place in one of its branches. Now every Banks branch network handles less than half of all transactions a shift which has taken an axe to the companys cost-to-serve. Banks appreciated early on that by centralising their service infrastructure, and centralising their service expertise, they created a new level of service for our customers. The call centre has played a leading role in transforming the banks value proposition for its customers: Now banks are saying to the market whatever your financial need, come to us and we can fulfil it at your convenience. This is part of a far reaching policy to deepen the product-per-customer ratio, rather than just going out into the marketplace and trying to find new prospects. The call centre also provides an opportunity to shift the qualitative nature of the relationship between bank and customer to a new level. Much of the extra leverage with customers that the call centre brings is tactical. A customer is a lot more receptive to up selling and cross selling when theyre phoning. The humble call centre is Banks means of shifting away from a market share

DIMAT

- 38 -

Installation of ATMs in Various Places And Their Convenience To Users

based product-as-commodity mindset, to those stresses the importance of deepening exiting customer relationship. Banks used to expend a lot of energy trying to make sales. Now their emphasis has changed they expend their energy to get to know the customer better. It is when a customer feels comfortable with the relationship they have with banks that they are likely to deepen their commercial relationship with them. The call centre is our new tool to getting to know the customer better. The speed of the shift away from the branch as the primary means of interacting with the bank shows the receptiveness of Indian consumer behaviour to the use of new channels. Nobody is afraid of the phone in India, and this gives us a much better environment to deal with the customer. The technology usage is far higher in a call centre compared with any other environment. The call centre is a cheaper channel than the branch, and often it is more convenient for the customer. This convenience can be supported by technology to provide a higher level of service than was possible previously. All the products and process are unified in the single call centre allowing the customer to get a seamless service. So bank is therefore able to truly take a customer centric customer view. Banks are able to get a customer who has been rejected from taking a credit card, they immediately offer a debit card." The ability to serve across all product categories from a single location has enabled the bank to provide a level of service qualitatively superior to its competitors, and this is offered as a complementary extension of the branch capabilities. Even the branches are moving very rapidly towards offering seamless service to all the customers. The relationship between the branches and the call centre is very good, and the branches are discovering how to focus their efforts on more rewarding service relationships. Of course branches are spread over 400 cities, so it takes a little bit longer to create a consistent level of service.

DIMAT

- 39 -

Installation of ATMs in Various Places And Their Convenience To Users

The surprising thing about Banks call centre is that it has only been up-andrunning for eight months. Banks has understood the importance of customer service over the phone, but it was only fairly recently that they began the task of consolidating their resources on customer service and customer relationship enhancement. The bank takes people who are first class graduates with a lot of yearning to learn. Following a selection process that includes telephone, personality and literacy tests, there is a post-recruitment process embracing a continuous learning program. Bank's product range isn't static, which means that they are also expected to use a web-based knowledge system to keep themselves abreast of the latest service developments.

Banks had to think about our CRM initiative very carefully, marrying strategy, technology and internal processes. The biggest challenge is the people management side of the equation: your call centre service is going to be as good as your people. They have to be motivated, they have to empathize with the customer. The e-initiatives of the banks have not been limited to customer servicing. The marketing activities for its various products are also taking the online route. A while ago the ICICI Bank joined hands with Satyam Infoway Limited for on-line distribution of the Bank's retail products. As part of this initiative ICICI Bank will also open ATM centres and cash dispensers at Satyam Infoways Cyber cafs across the country creating yet another chain of access points for new generation customers, seeking to do business with the group. In April 2000, through tie-ups with Orange and Airtel, ICICI started offering limited WAP based services for customers on the move. A month later, on its way towards a full-fledged online mobile commerce service, the company commenced offering services like balance updation, request for cheque book, details of last 5 transactions, request for statement etc. Corresponding services are also available for the banks credit card customers. On the anvil are personal banking services, payment services for utilities, travel and ticketing information etc. Banks has leveraged on a number of tie-ups to come up with its various offerings. For its Internet banking offering the Bank uses Infinity from Infosys, for its

DIMAT

- 40 -

Installation of ATMs in Various Places And Their Convenience To Users

credit card business it uses Vision Plus from PaySys, USA. For WAP services the tieup with cellular service providers Orange and Airtel helps reach out to these users, while the WAP technology is being implemented by the in-house Banks Infotech Services. To leverage the Net for its marketing initiatives, Bank and Satyam Infoway have jointly set up a ".COM" company to promote banking products on the Net. The bank has also entered into agreements with leading corporate like BPL, Rediff.com, Usha Martin and Tata Communications for B-to-C solutions in a bid to further strengthen its Internet banking product offering and services

Payment systems are perhaps the bane of any financial services company looking to move online. Security and privacy are issues that every bank looking to move online is grappling with. Banks has come up with its own answer to the problem.

DIMAT

- 41 -

Installation of ATMs in Various Places And Their Convenience To Users

RESEARCH METHODOLOGY
Research in common parlance refers to a search for knowledge. Once can also define research as scientific and systematic search for pertinent information on a specific topic. Research is an art of scientific investigation. Redman and Mory define research as a systematized effort to gain new knowledge. Research is an academic activity and as such the term should be used in a technical sense. According to Clifford woody research comprises defining and redefining problems, formulating hypothesis or suggested solution; collecting, organizing and evaluating data; making deductions and reaching conclusion; and at last carefully testing the conclusion to determine whether they fit the formulating hypothesis.

OBJECTIVES OF RESEARCH
The purpose of research is to discover answer to question through the application of scientific procedures. The main aim of research is to find out the truth which is hidden and which has not been discovered as yet. Some of its objectives are as follows:First objective is to know about the installation of ATMs in various places and their convenience to users. To know how frequently people use ATM on their day today life. To know awareness of customer about the services of banks provided to for customer convenience. Wether they know the use of such services. Those customers are getting update information regularly or not. What types of information are needed to be given to customer so that they can use it much better than now? Know that which type of Non-Cash form of payment are used by them most.

DIMAT

- 42 -

Installation of ATMs in Various Places And Their Convenience To Users

PROBLEM STATEMENT
Due to lack of information about ATMs (Automatic Triller Machines) among consumer of the banks are facing problem by each individual. People who dont know how to use the ATMs or Debit/Credit Card services properly how they will buy the product or withdraw cash from ATM. This shows awareness about the ATM services. Under noted problem are envisaged in this area. Difficulties to create awareness for the use of ATM facilities provided by banks. Customers are getting difficulties for using ATMs frequently in daily life. Lack of information about the use of ATMs and convenience to the users.

METHODOLOGY OF STUDY
Research can be defined as a systemized effort to gain new knowledge. A research is carried out by different methodologies which have their own pros and cons. Research methodology is a way to solve research in study and solving research problems along with logic behind them are defined through research methodology. Thus while talking about research methodologies we are not only talking about research methods but also consider the logic behind the methods. We are in context of our research studies and explain why it is being used a particular method or technique and why the others are not used. So that research result is capable of being evaluated either by researcher himself or by others.

RESEARCH METHODOLOGY
Research has its special significance in solving various operational and planning problems of business and industry, research methodology is a way to systematically analyse the research problem. Thus, research methodology is the fountain of knowledge for the sake of knowledge and an important source of providing guidelines for solving different problems.

DIMAT

- 43 -

Installation of ATMs in Various Places And Their Convenience To Users

ASSUMPTIONS
It has been assumed that sample of 30 represents the whole population. The information given by the customer is unbiased.

LITERATURE SURVEY
The project is based on pure findings of facts Development of working hypothesis: The hypothesis could be developed by discussing with the different consumer in the organization and guides about this exploratory research and reach to the conclusion that the data is to be collected by personal interaction with the consumer of organization asking them about the ATMs and their use and convenience to them. First of all everyone should be aware of how to use ATM/Debit Card/Credit Card and what are the facilities that available in the and of which quality; which is hard to judge but regular user can identify it very well.

EXECUTION OF PROJECT
It is very essential in the research process to know the accuracy of the findings which depends on how systematically the study has been carried out so that it can make sense. We have executed the project after prior discussion with our guide and structured in the following steps: Preparation of a questionnaire The focal point of the designing the questionnaire was to know how frequently people use the ATM Card/Debit Card/Credit Card in daily life for payment. This questionnaire was primarily aimed to see that consumer easily get the information about the facilities provided by their banks and what convenience they will get from it. The questionnaires were discussed through personal interface with the respondents.

DIMAT

- 44 -

Installation of ATMs in Various Places And Their Convenience To Users

LIMITATIONS OF STREAMLINING RESULTS


Every work has its own limitations. Limitations are extent to which the process should not exceed. The following limitations for the project are: Durations of project were not enough to make our conclusion on such a vast subject. Time constraints have also become a major limitation. The sample size taken for drawing the conclusion was not sizeable. Customer ignorance was faced during discussions with respondents.

DIMAT

- 45 -

Installation of ATMs in Various Places And Their Convenience To Users

ANALYSIS OF DATA
Question No.1: Do you have any bank account in any bank?

INTERPRETATION: Most the interviewee have their own bank accounts, which help them to secure their money and they trust banks in an unbelievable way and their faith is also considerable because of security reasons. Nearly 97% of interviewee had bank account and rest dont have.

Question No.2: What is your yearly income?

INTERPRETATION: Nearly everybody is distributed equally in all types of income groups but mostly are between Rs.10000/- to Rs.500000/- income group.

DIMAT

- 46 -

Installation of ATMs in Various Places And Their Convenience To Users

Question No.3: In what type of location do you need the ATM or ATMs installed?

INTERPRETATION: ATM users are divided almost everywhere .people who have their ATM cards he/she use it as per their convenience like for Convenience Store/Gas Station, Retail Stores, Grocery Store, Lodging, Restaurant, Bar, School/College/University etc. Question No.4: Are you aware of the services of banks provided to for customer convenience?

INTERPRETATION: Most of the people who have any debit or credit card facility or any bank account knew about the service those are provided by the bank to them. Nearly 43% people are aware about those facilities and 27% partly, rest have no idea about those facilities and services.

DIMAT

- 47 -

Installation of ATMs in Various Places And Their Convenience To Users

Question No.5: Are you able to make use of these services?

INTERPRETATION: 53% of the sample population does not know the use of those services which are provided by the banks and only 20% know about these services or know how to use them and rest 27% know partly.

Question No.6: Do you get the updated information regularly?

INTERPRETATION: Most of the people said no, they dont get updated information about any thing regarding their account of the facilities provided by the bank. 13 people from the sample size of 30 dont get any information and rest 17 either partly or full information is provided to them by their respective banks.

DIMAT

- 48 -

Installation of ATMs in Various Places And Their Convenience To Users

Question No.7: Are you satisfied with the services of the banks?

INTERPRETATION: Most of the customers are satisfied with the banks because of their services. 13 of them are satisfied from 30 people and rest are partly of totally dissatisfied with bank services.

Question No.8: Is the bank able to satisfy you all the time?

INTERPRETATION: Relative answers came from the interviewees that 13 of them are satisfied all the time but rest are not.

DIMAT

- 49 -

Installation of ATMs in Various Places And Their Convenience To Users

Question No.9: Approximately what is your average visit to ATM per day?

INTERPRETATION: Approximately each and every ATM user visits an ATM every day but some of them visit an atm twice or thrice a day.

Question No.10: What type of information you require the most?

INTERPRETATION: Except withdrawing cash people visit ATM because of some more reasons like balance inquiry of their bank account or clearance of cheque which they either deposited of given to somebody else or may be if interest inquirer and some any other reasons can be their. But most of them visit to know their balance amount in their respective accounts.

DIMAT

- 50 -

Installation of ATMs in Various Places And Their Convenience To Users

Question No.11: Do you currently have any ATM machines installed near to your home/office?

INTERPRETATION: From the above diagram we can say that nearly each and every ATM user has an atm installed near his home/office.

Question No.12: Which "Non-Cash" forms of payment do you currently use?

INTERPRETATION: People are now technologically improved and they are implying technology in their day to day life. The biggest example is that nearly 21 sample or 70% of our sample size use either Debit or Credit Card for payment if they dont have cash at that time, cheque is now nearly abolished from market its use only for business purpose.

DIMAT

- 51 -

Installation of ATMs in Various Places And Their Convenience To Users

QUESTIONNAIRE
Thank you for your help! You are one of just a few people I am asking, so your answers are very important. Please answer all questions some questions seems similar to each other but please answer all questions. For most, you need only check a box or enter a number for your answer. The survey will take only few minute: Name: ____________________________________ Age: Sex: ___________________ Male Female Single

Status: Married Qualification:

__________________________________________

Question No.1: Do you have any bank account in any bank? o Yes o No Question No.2: What is your yearly income? o Under 50000/o 50000/- to 100000/o 100000/- to 500000/o More than 500000/Question No.3: In what type of location do you need the ATM or ATMs installed? o Convenience Store/Gas Station o Retail Stores o Grocery Store o Lodging o Restaurant o Bar o Club

DIMAT

- 52 -

Installation of ATMs in Various Places And Their Convenience To Users

o Bank/credit Union o School/College/University o Other (Please Specify)______________________________ Question No.4: Are you aware of the services of banks provided for customer convenience? o Yes o No o Partly Question No.5: Are you able to make use of these services? o Yes o No o Partly Question No.6: Do you get the updated information regularly? o Yes o No o Partly Question No.7: Are you satisfied with the services of the banks? o Yes o No o Partly Question No.8: Is the bank able to satisfy you all the time? o Yes o No Question No.9: Approximately what is your average visit to ATM per day? o 1 o 2 o 3/3+

DIMAT

- 53 -

Installation of ATMs in Various Places And Their Convenience To Users

Question No.10: What type of information you require the most? o Account Balance o Cheque Clearance o Bank Interest o Others Question No.11: Do you currently have any ATM machines installed near to your home/office? o Yes o No Question No.12: Which "Non-Cash" forms of payment do you currently use? o Cheques o Credit Card o Debit Card o EBT Card o Others_________________________

DIMAT

- 54 -

Installation of ATMs in Various Places And Their Convenience To Users

BIBLIOGRAPHIES
Marshall Brain's More How Stuff Works, Brain, Marshall Everything has its price, Donley, Richard Money Transmission and the Payments Market, Hillier, David Lighting for Automatic Teller Machines, IESNA Committee Resolution of Banking Disputes, Mcall, Susan Automated Teller Machine as a National Bank under the Federal Law , Peterson, Kirk Secrets and Lies: Digital Security in a Networked World, John Wiley & Sons Triumph of the Straight Dope, Zotti, Ed

WEBLIOGRAPHIES
www.enterprenuer.com www.internationalenterprenurship.com www.eventuring.con www.kompass.com www.msme.gov.in www.fhme.org.in www.lubindia.org www.dcmsme.gov.in www.semindia.com www.indianbusiness.nic.in www.insme.info www.search.com www.google.com www.answers.com

DIMAT

- 55 -