• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Port Info

• Ships in Ports
  
  

Archives

• Yesterday
• Datewise
• Resources

Group Sites

• The Hindu
• Business Line
• The Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

N.S.Vageesh
Priya Nair

Chennai/Mumbai , March 14

A NEW trend visible on the technology front in banks is the increasing use of "managed services" or outsourcing of technical services - especially the running and maintenance of their automated teller machines (ATMs).

A couple of banks including HDFC Bank, Centurion Bank, Citibank, IDBI Bank have taken to it in a big way. Joining them are also some public sector banks such as Corporation Bank, Union Bank, Bank of India and Dena Bank.

HDFC Bank started its outsourcing model by handing over 80 of its offsite ATMs in Mumbai in December 2004 to service provider NCR. Recently, Centurion Bank struck a deal with Euronet, another service provider, to outsource the management of its 152 ATMs.

Banks now only need to identify the location and take care of the marketing of the services. Everything else - from setting up the ATMs and then their monitoring to the provision of consumables, security, currency management and transaction processing is taken care of by service providers such as Diebold, NCR or Euronet

Until recently, banks that set up their ATM networks also took care of their monitoring, maintenance and management. Banks are now beginning to see the outsourcing of such activities as essential to their business plan. According to Ms Rupinder Anand, Director, Professional and Managed Services, Diebold Systems, ATM manufacturer, "Managed services reduce the burden of day-to-day infrastructure management for banks allowing both IT and finance executives to focus on strategic business issues."

Ms Anand says that bank can cut costs by 10 to 15 per cent by going for an outsourced model. She says it is cost effective since banks would otherwise have to maintain tech teams to service ATMs and incur high costs in retaining this talent.

Says Mr D. Krishnamurthy, General Manager, Bank of India, which has gone in for an outsourced model, "Our decision to outsource were mainly on cost considerations and also the lack of expertise of maintaining the whole gamut of services of the ATM facilities."

It is also a question of economies of scale that the service provider offers. Euronet for instance, handles over 1,000 ATMs for seven banks. Says, Mr Loney Antony, Managing Director, Euronet, "We service over 6,000 ATMs all over Europe. We invest in the ATM, so there is no capital investment for banks. They can, therefore, deploy their money for other services."

Adds Mr Deepak Chandnani, Managing Director, NCR, "Banks can save on the substantial capital outlays for ATM network development."

According to Mr Rahul Bhagat, Vice-President, Head - Direct Banking Channels, HDFC Bank, "Competitive costs, an overall higher uptime for ATM that ensures customer convenience and a single point contact for multiple vendor management are some of the advantages for the bank."

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Corp Kisan card

Copyright © 2005, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line