The Hindu Business Line : Outsourcing ATMs catching up

OUTSOURCING is becoming the name of the game in the domestic banking industry. Today, banks find it economical and convenient to outsource ATM networks: the machines, their maintenance, safety and security to other specialised agencies.

And, as the list of banks, which are outsourcing such products increase, the costs have been plummeting to all-time lows.

Outsourcing costs have plunged from Rs 3,300 per ATM machine per day, couple of years ago, to around Rs 1,500 per day.

This would work out to just about the salary of a senior executive of a bank. A Chief Executive of a private sector bank said: "The ATM dons the role of an officer, the accountant, the clerk, the cashier, the attender and even the security man on duty — all rolled into one. There is no lunch break or tea break and it works round the clock, all through the year."

All that the bank has to do is to show the agency where the ATM is to be installed, provide link between the bank's computerised network and their switch, and replenish the cash whenever it depletes at the machines.

The agencies provide end-to-end outsourcing facilities from providing the machines themselves, installation, round-the-clock security, the transport and stacking of notes.

There are several players in this outsourcing field. The India Switch Company is one, with two different entities for importing the machines and providing network support. Several others have moved up the ladder from importing, manufacturing and networking into the realm of outsourcing, sources said.

After the initial infrastructure costs in procuring the switch and laying the network, these agencies are able to service additional customers at a fraction of their initial costs, the banker said.

Given the decreasing costs and additional conveniences on offer, more banks are said to be contemplating end-to-end outsourcing.

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