ATM outsourcing seems lucrative to banks
By Ankit Sharma
Jul 13, 2011
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By the year 2015, it is expected that almost half of the total ATMs in the country will be the outsourced by lenders.

The easy installation, better maintainance and most importantly - reduced costs have made the outsourcing model look all the more lucrative to banks.

It is expected that in the upcoming 4-5 years time, the number of outsourced ATMs would tip to 90,000 from the present count of 20,000.

"Many banks want to double their ATM count in the next 3-5 years. For banks, it is a time-consuming process as it may take them months to install an ATM, while we may be able to do it in a few days," said Sunil R Udupa, president and chief executive officer of AGS Transact Technologies.

"There is better efficiency in ATM (outsourced) maintenance post speedy deployment. Also, if a bank has to add more ATMs, it has to add assets in its book, making it asset heavy. But they would rather have that as an operational expense," said Mr Udupa.

"It takes a lot of bandwidth to have a dedicated team and the headcount may not justify the productivity and the cost," said a senior official from HDFC Bank. "In an outsourced model, you cut out the layers of people. Vendors get multiple options when it comes to identifying premises and setting up operations," he said.


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