Security Of The Customer – Corporate Concern, Or The Regulators?

Published September 5, 2014 by vishalvkale

I have been marking a clear absence of security of ATMs in several places, cutting across 2 or 3 banks at the very least, and in more cities than one. I did see guards deployed at some places {a select few, mind you}; unfortunately, even at those places, the “guarding” {for want of a better word} being done was less than optimal. 

I spoke to 2 Branch Teams in 2 different cities several hundred kilometers apart, and the response was most lackadaisical, to say the least. The first instance I spoke up, around 6-8 months ago, the Branch Team told me “they will do what they can” : whatever that means. The second instance floored me; I appreciate the Branch Team’s candid approach, but his response did stun me into  silence. 

The second guy bluntly told me that nothing will happen unless the RBI takes this up, and issues directives to banks to make security at ATMs mandatory. This person went further, and told me that it was unlikely that there were security at any ATM in the industry In fact, he categorically stated that no bank provides security. Furthermore, he also clearly stated that ATMs have been outsourced {he obviously meant their servicing}, and it was not in his power to do anything! 

On being told of the risk, and the possibility of customer loss or worse, he said that this can only be done when the RBI makes it mandatory. In other words, you are firstly leaving huge amounts of cash in your ATMs without any security, you are also exposing your customer to risk; we have seen incidents happening in ATMs in broad daylight – so no one can say that this risk is non-existent.

Well, firstly, on reaching home I looked at 2 major banks and their ATM network; in both cases, I took the number of ATMs from their websites. Next I assumed the CTC of each guard as Rs. 10,000/-, and further assumed one guard per ATM, which is what I was asking for. I then went on to take the net profit figures updated on for these banks, and cross-checked one of these from Economic Times. I then calculated the total expenses on guards as a percentage of net profit, which in both cases came to less than 0.01%. 

Think about that : 0.01% {If I have made an error in my thinking, please educate me}. Of course, other expenses will be incurred : a supervisor and a chain of command, some infrastructure etc. I have not taken these into account. Even if you add up the other expenses that will be incurred, the figure will not be too significant. And a moments thinking can reveal several ways in which these can be minimised, like having Branch Operations supervise the guards, or some other such method or process, perhaps even involving outsourcing. Point is that it is doable!

Why then is this shocking laxity on the parts of the banks? The ATM is bank property; it is located on a location that is given to the bank as per my understanding. And even if that isnt the case, an ATM is like an extended bank branch. Logically, when a customer enters an ATM to partake some of the bank’s services, he is in the bank premises. He is using your equipment, your facilities for which he is paying. Can the bank just shrug off its responsibility towards its own customers in such a perfunctionary fashion?

Even if it isnt the bank’s responsibility {unlikely, but you never do know the legalities involved} how much of a dent will it make if you provide security? The customer visits the ATMs out of trust – trust that he will get his hands on his own money, and be able to use it for his needs. So long as he is in the ATM, or  on his way out of it, he is in the care of the bank {in a manner of speaking}. It seems to me as a customer, that the very least the bank can do is provide some basic security that can ensure that we customers are not harmed or looted while in the ATM or on the way out of the ATM. I am not expecting anything more than this basic feeling of trust. Just  as we freely count the cash in the open in a bank branch – since there is a basic trust invested in the relationship between the customer and the bank. We would not dare do that out in the street! 

In this scenario of manifest risk, when incidents of looting in ATMs, physical harm or worse, or even ATMs being looted and carried away have been known to occur, it seems a stupid way of building trust in the customer. It seems even more strange when you consider that the bank is leaving large amounts of cash locked in ATMs unguarded! In fact, that is so idiotic, it isnt even funny! 

And all for less than 1% of net profit… 

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