ATM Challenges in India: Power, Environment and Security

Mr. Mani MamallanThe ATM Industry provides an opportunity for banks to implement appropriate cost effective models. The ATM Channel has dominated the public technology segment, and speculation is rife that the industry has a great future in India. With ATMs, banks can cater to audiences outside the banking sector. An ATM facilitates the process of withdrawing and depositing money, transferring funds from card to account, paying insurance bills, applying for loan, booking air and train tickets, movie tickets, and availing coupons, making the ATM a personalised delivery channel. The multivendor software that has been adopted by most leading banks across the world ensures that they don’t depend on external vendors to obtain software or hardware equipment. This results in the integration of multiple aspects of deploying an ATM machine, in turn reducing the cost of ATM ownership. ATM systems have developed to such an extent that some ATMs are able to connect with customers by memorizing consumer preferences based on their history of transactions, and render services accordingly.

According to Grand View Research agency, the ATM market is expected to reach USD 24.92 billion worldwide by 2022 and ATM managed services is estimated to grow considerably with a CAGR of over 11.0% from 2015 to 2022. There has been a significant rise in the use of ATM usage due to better security standards for online activities making it safer for online financial transactions as well. As the industry capitalises on point of safety, it is expected that the ATM industry will grow further. The number of mobile transactions will increase with the technological advancement combined with the facilitation of basic transactions. Linking ATMs to wireless devices would ensure that customers have a better chance at completing a transaction securely. With the number of banks cropping up, competition is bound to shoot up in order to increase penetration. This would result in a bigger installation base, leading to better growth for the global ATM industry. Financial institutions and ATM deployment companies are opting for biometric, user-friendly, and sometimes voice recognizing devices that result in lesser number of frauds.

ATMs have completely changed the background of the Indian banking industry by fostering economic development. A part of this can be contributed to rise in the per capita income of the average Indian population, particularly in the urban cities. The ATM has brought on a self-service culture in India. As the economy is transitioning into a cashless one, and banks attract more customers by encouraging them to embrace plastic money, it is likely to spur more growth. It is an industry that constantly alters itself to the digital and technological developments, making it easy to predict its future as being lucrative. On a global level, ATM growth is expected largely from developing countries, specifically China and India as both these countries have experiences tremendous growth in the past two decades.

In the coming years India will be introduced to more developed, world class ATMs in the near future as most banks plan on installing hi-tech machines. Since the life span of an ATM is 5-7 years, most financial institutions would have to replace the old ones with newer ATMs. The ATM deployment rate is at 25% per annum and the number of ATMs are expected to touch 2.75 lakh in the country by next year. The new ATMs will offer the customers the freedom to recharge their mobile phone balances, make fund transfers and even pay their bills at the ATM’s instead of physically having to go to these places. We will also see banks providing customers the choice of which denominations of currency they require. Industry experts believe a lot more will go into developing a high standard security that needs to be added to ATMs if it aims to be compared to international standards.

The ATM industry is also looking at investing in solar powered ATMs, in which cash will be stacked in a vertical instead of a horizontal order, facilitating the process. This alignment makes an ATM machine less susceptible to a breakdown, increasing efficiency. Implementing solar powered ATMs gives the industry leverage to implement more in rural areas, as these ATMs function in temperatures up to 122 degrees Fahrenheit, and require just 100 watts of energy and are equipped with solar power cells.

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