“A STUDY OF ATM & DEPOSIT MACHINE”
BACHELOR OF COMMERCE (BANKING & INSURANCE) SEMESTER V (2015-16)
SUBMITTED BY RAJPUT MANPREET SINGH UNDER THE GUIDANCE OF PROF. SAMMA NARANG
SINDHU EDUCATIONAL SOCIETY SWAMI HANSMUNI MAHARAJ DEGREE COLLEGE OF COMMERCE NETAJI ROAD, ULHASNAGAR-4
“A Study of ATM & Deposit Machine” Business CRM Services With ATMs & Deposit Machine Saturating The Market And Declining Revenues Per Machine, Forward-Looking Financial Institutions Are Rethinking Their ATM & Deposit Machine Strategy And Moving Toward Exciting New Technologies.
“A STUDY OF ATM & DEPOSIT MACHINE” Bachelor of commerce (Banking & Insurance) Semester V (2015-16)
Submitted In Partial Fulfillment of the requirements for the Award of Degree of Bachelor of Commerce - Banking & Insurance
By RAJPUT MANPREET SINGH Seat No-1150303
UNDER THE GUIDANCE OF PROF. SAMMA NARANG
SINDHU EDUCATIONAL SOCIETY’S SWAMI HANSMUNI MAHARAJ DEGREE COLLEGE OF COMMERCE,
CERTIFICATE 2015-2016 This to certify that, RAJPUT MANPREET SINGH of B.com (Banking and Insurance) Semester-V (2015-16) has successfully completed the project on “A STUDY OF ATM & DEPOSIT MACHINE” under the guidance of Prof. SAMMA NARANG. Date:Place- Ulhasnagar.
(Prof. Mrs. Samma Narang)
(Prof. Vandana Kodwani)
Project Guide
BBI Coordinator
External Examiner
(Dr. Prema Gurbaxani) Principal
Rajput Manpreet Singh Seat No. 1150303
DECLARATION
Date-
I, RAJPUT MANPREET SINGH the student of B.com (Banking & Insurance) Semester- V (2015-16) hereby declare that I have completed the project on “A STUDY OF ATM & DEPOSIT MACHINE” successfully.
The information submitted in this project is true and original to the best of my knowledge. Thank you,
Yours faithfully,
RAJPUT MANPREET SINGH
ACKNOWLEDGEMENT
At the beginning, I would like to thank Almighty GOD for his shower of blessings. The desire of completing this dissertation was given a way by my guide Prof. Samma Narang. I am very thankful to her for the guidance, support and for sparing her precious time from a busy and hectic schedule.
I am thankful to Dr. Prema Gurbaxani, Principal of SHM College where I am a student in Commerce. My sincere thanks to Prof. Samma Narang who always motivated and provided a helping hand for conceiving higher education.
I would fail in my duty if I don’t thank my parents who are pillars to my life. Finally, I would express my gratitude to all those persons who directly and indirectly helped me in completing dissertation.
Rajput Manpreet Singh
DECLARATION
Date-
I the undersigned PROF. SAMMA NARANG, have guided RAJPUT MANPREET SINGH for his project, he has completed the project “A STUDY OF ATM & DEPOSIT MACHINE” successfully.
I, hereby, declared that information provided in this project is true as per student to the best of my knowledge.
Thank you,
Yours faithfully,
Prof. Samma Narang
Literature Review
The purpose of this paper is to review literature on the impact of adoption of ATM technology from the perspective of customers, banks and suppliers. As per the changing demand of the customers, innovative software solutions are regularly released. Similarly, banks are deploying CRM technology to facilitate personalized needs of customers on one to one basis. Suppliers of ATMs are also under pressure to provide ATMs to banks which can meet the latest customer needs.
Abstract:
Indian banking system touches the lives of millions of people and it is growing at a fast pace. Banking industry in India is facing number of challenges like changing needs and perceptions of customers, new regulations from time to time and great advances in technologies. The pressure of meeting these challenges have compelled banks to change the old ways of doing business. The research paper focuses on how the technology has transformed the face of banking in India. India’s banking system has seen some major financial innovations in the past decades which lead to tremendous improvements in banking services and operations. The various innovations in banking and financial sector are ATM, Debit and Credit cards, Deposit Machine and many more value added products and services. This paper also highlights the benefits and challenges of changing banking trends. Banks are investing heavily in adoption of these innovations. The need of hour is to design such a system that encourages the efficiency of investment in innovations and widens the gap between revenues and costs involved with reference to technological up gradation
Sr. no.
Content
Pg. No.
INTRODUCTION
01-13
UNIT-1
1.
Introduction To ATM
14-17
a. Introduction b. ATM Meaning c. ATM Network d. Inter-Connectivity Of ATM Network e. Hard cash transaction
2.
18-21
Review Of ATM Machine
3.
a. b. c. d.
Brief History Of Bank ATM Features Of ATM Self-Service Kiosks Business & Customer Benefit
22-27
Detail Study Of ATM a. Versatility Of ATM b. Challenges in Using ATM c. ATM As An Effective Channel
Marketing
Sr. no.
4.
Content Role Of RBI
Pg. No. 28-33
a. Changes Made By RBI b. New Rule For ATM Customer c. Reason For Framing New Rules By RBI d. Comparison of ATM usage charges
5.
Introduction To ATM Encryption Method a. b. c. d.
Introduction Hardware & Software ATM Encryption Method Smart Intruders
34-36
UNIT-2
1.
Introduction To Cash Deposit Machine a. b. c. d. e.
Sr. no.
37-40
Cash Deposit Machine Why Use A CDM How Does CDM Help You Salient Features Advantages
Content
Pg.
No.
2.
Detail Study a. b. c. d. e.
41-44
System Overview CDM Provide Busy Customer Service Customer Requirement Benefits Customer Require Fast Technology
UNIT-3
ANALYSIS OF DATA 45-50
Findings Conclusion
51 52
Questionnaire
53-54
Bibliography
55
UNIT-1
Automated Teller Machine (ATM)
CHAPTER-1 INTRODUCTION TO ATM MACHINE
Introduction
Banking industry in India has also achieved a new height with the changing times. Customer services and customer satisfaction are prime responsibilities of banks now days. Information technology has given rise to new innovations in the product designing and their delivery in the banking and finance industries. Technology offers a chance for banks to build new systems that address a wide range of customer needs including many that may not be imaginable today. Banking through internet has emerged as a strategic resource for achieving higher efficiency, control of operations and reduction of cost by replacing paper based and labor intensive methods with automated processes thus leading to higher productivity and profitability. Financial innovation associated with technological change totally changed the banking philosophy and that is further tuned by the competition in the banking industry. Challenging business environment within the banking system create more innovation in the fields of product, process and market. As the most highly used customer access channel in retail banking, the ATM is a critical customer touch point. Recent ATM innovations offer financial institutions the opportunity to transform the ATM from a cash dispenser to a customer relationship management tool, helping to enhance loyalty among all customers, particularly those who almost exclusively use the ATM. From transaction personalization to customized, oneto-one marketing capabilities, the future of ATMs is in their value as customer relationship and marketing vehicles, allowing financial institutions to mitigate the trend of declining ATM profitability while maximizing the potential of their ATM programs.
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ATM ATM means neither “AVOIDS TRAVELING WITH MONEY “nor “ANY TIME MONEY, “but certainly implies both. Slim ATM cards are fast replacing confounding withdrawal forms as a convenient way of getting your money from banks. In a way, they are rewriting the rules of financial transaction. A smart person no longer needs to carry a wallet-full of paper money on his person. All he needs to do is fish out an ATM (automated teller machine) card, insert it in the slot, punch in a few details and go home with hard cash. Automated teller machines (ATMs) were the first well-known machines to provide electronic access to customers. With advent of Automatic Teller Machines (ATM), banks are able to serve customers outside the banking hall. ATM is designed to perform the most important function of bank. It is operated by plastic card with its special features. The plastic card is replacing cheques, personal attendance of the customer, banking hour’s restrictions and paper based verification. ATMs have made hard cash just seconds away all throughout the day at every corner of the globe. ATMs allow you to do a number of banking functions – such as withdrawing cash from one’s account, making balance inquiries and transferring money from one account to another – using a plastic, magneticstripe card and personal identification number issued by the financial institution. The Indian ATM industry has seen explosive growth in recent times. ATMs represent the single largest investment in the electronic channel services for the Banks. In India, HSBC set the trend and set up the first ATM machine here in 1987. Since then, they have become a common sight in many of our metros. Automated Teller Machines (ATMs) have gained prominence as a delivery channel for banking transactions in India. Banks have been deploying ATMs to increase their reach. While ATMs facilitate a variety of banking transactions for customers, their main utility has been for cash withdrawal and balance enquiry. As at the end of October 2007, the number of ATMs deployed in India was 31,078. According to some estimates the total cash movement through ATMs across India was around Rs. 70,000 crore in FY 06. Clearly, industry watchers forecast a bright future.
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For ATMs in India. While the ATM is a great service for customers, for the banks it means immense savings on the cost of operations. While a typical cash transaction carried out in a bank’s branch premise would cost Rs 40 that in an ATM will only cost Rs 18translating into a cost saving of Rs 22 per transaction.
First ATM in India Hong Kong and Shanghai Banking Corporation (HSBC) introduced ATM concept in India first time in 1987. But now almost every bank provides ATM facilities to their customers. ICICI bank has most number of ATM centers across India. The other banks UTI, HDFC and IDBI are leading in providing ATM facilities to their customers. Public Sector Banks are also taking the installation of ATMs seriously for Indian market. They are either setting up their own ATM centers or entering into tie-ups with other banks. The Corporation Bank has the second largest network of ATMs amongst the Public Sector Banks in India.
ATM Networks : The ATMs of a bank are connected to the accounting platform of the bank through ATM switches. Inter-bank ATM networks are created by setting up apex level switches to the use of ATM cards of one bank at the ATM(s) of other banks for basic services like cash withdrawal and balance enquiry. Banks owning the ATMs charge a fee for providing the ATM facility to the customers of other banks.
Inter-connectivity of ATM Networks for enhanced access Inter-connectivity of ATM Networks provides access to the customers to use any ATM in the country irrespective of the bank with which the customer is banking. There are a number of ATM network switches such as CashTree, BANCS, CashnetMitr and National Financial Switch (NFS). In addition, most ATM switches are also linked to VISA or MasterCard gateways.
Why do banks prefer online transactions rather than hard cash? How are they benefited? Money in the form of bills or coins; "there is a desperate shortage of hard cash" Electronic money, or e-money, is the money balance recorded electronically on a card. Another form of electronic money is network money, software that allows the transfer of value on computer networks, particularly the internet. Electronic money is a floating claim on a private bank or other financial institution that is not linked to any particular account. Thus, electronic money is used rather than hard cash..
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CHAPTER-2 REVIEW OF ATM MACHINE
Brief History of the Banks Having Large No. of ATM Channels The State Bank of India (SBI) is the oldest and largest bank in the country. Its origins go back to the first decade of the 19th century, when the Bank of Calcutta was established on 2 June 1806. The bank got its present name after an Act of Parliament in May 1955 and the State Bank of India was constituted on 1 July 1955. Today, SBI has a phenomenal 9,559 branches and its ATM network is spread across 6,473 of its own locations& total 8,000ATMs including of those of its associate banks. ICICI Bank India is the largest private sector bank. It’s banking products and financial services are some of the superior ones. The reach and market of ICICI Bank is unmatched in India as yet.It offers a countrywide network of 1,000 branches and 3,680 ATM’s reaching out to your doorsteps. The Housing Development Finance Corporation (HDFC) Bank is one of the first banks in India to offer its customers the bill pay facility. HDFC Bank is also a leader in online purchase (using the HDFC Bank DirectPay product). The bank also offers its customers a free personalized payable-at-par chequebook and services like real time gross settlement and national electronic fund transfer. HDFC Bank was among the first to receive an ‘in principle’ approval from the RBI to set up a bank in the private sector as part of the liberalization of the Indian banking industry in 1994. The bank has 1,148branches and 1,647 ATMs network spread across the country.
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Features of ATM 1. Cash withdrawal 2. Mobile phone recharge vouchers are available 3. Deposit cash and cheques (at selected ATMs) 4. Obtain a summary of balances for all your accounts 5. View and print a mini-statement (last 10 transactions) 6. Transfer money between linked accounts
Using ATMs as self-service kiosks for value-added services By using self-service channels, consumers can purchase a variety of goods and services without the help of a sales assistant. These interactive, self-service channels can be applied to a number of areas. ATMs still happen to be big crowd pullers for banks. They are now being increasingly used to provide other services like credit card payments since the interface of an ATM is easy to navigate, explore and use. It is a logical move to use ATMs to provide other value added services. This is also supported by the fact that among self-help kiosks, ATMs have the best penetration in many regions and this density is likely to grow. Currently, an ATM is equipped with a card reader, a cash dispenser, a cash/envelope collector, and a printer. Using these, a cardholder can conduct financial transactions such as cash withdrawal, cash or check deposit, payment of utility bills, printout of mini account statements, and transfer of money between linked accounts.
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Business benefits of using ATMs as self-service kiosks ATMs provide the following advantages to the customer as well as the business: 1. Enhanced customer experience: ATMs can help enterprises retain and grow their customer base by enhancing customer experience. a. Customer convenience: ATMs can extend the transaction hours on bill payments, ticketing, fee payment, and other transactions beyond office hours and beyond branch premises to convenient locations. b. Ease of use: ATMs have a simple UI that most bank customers find easy to use and are familiar with. As mentioned earlier, many ATMs use local language and biometrics for authentication, unlike internet or mobile interfaces that require the user to be ‘net literate’, or websites that do not have regional customization implemented. In many cases, the UI of some websites is not as user friendly. 2. Better quality of transactions: The quality of transactions via ATMs is better than those on the Internet or mobile. a. Persistent connectivity: ATMs provide dedicated and assured connectivity, unlike the internet connection in many regions; ATMs provide dedicated and assured connectivity.
b. Security: Transactions on ATMs are more secure than those on the internet. The web is more vulnerable to hacking, viruses, phishing, etc. The introduction of the Europay, MasterCard and Visa (EMV) standard, biometrics, contactless cards, and mobile authentication further reduces chances of fraud in ATM transactions.
Customers benefits of Using an ATM In an ever changing world of technology, everything gets faster, more convenient, and more technologically advanced. The debit card has now been main stream in most financial institutions for almost 20 years now. The advantages of using an automated teller machine for customer are
.20 1. Convenience A debit card can be convenient in so many ways. If you need access to cash and are either far away from your bank or after bank hours, you can still get
cash if you need it. Using a debit card speeds up lines at any place of business by saving you from having to write a check; just swipe and your purchase is completed. Most debit cards have the VISA or Master card logo which is accepted almost anywhere, worldwide.
2. Protection There is several ways that a debit card offers protection. First, if your cash is lost or stolen, it cannot be replaced, it is gone. A debit card on the other hand can be cancelled and a new one can be ordered. If someone did get the card or card number before you realize it is gone, it has daily limit of Rs.500 for cash or Rs.3000 for purchases. In addition, you are not liable for fraudulent purchases. An unauthorized transaction can always be disputed and refunded.
3.
Budget
When a debit card is used appropriately, it can help you budget much more than a credit card. Most debit cards stop allowing transactions once your balance is at zero, which also can save on fees such as overdrafts.
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CHAPTER-3 DETAIL STUDY OF ATM MACHINE
Tapping into the versatility of ATMs ATMs have become the most popular channel of consumer interaction and the most used marketing tool to reach a variety of geographies and increase regulated financial penetration. The latest trend in unattended devices with touch screens combines a secure payment solution with a multimedia delivery platform capable of delivering targeted branding, promotions, etc. Given the wide range of user demographics, ATMs employ a simple and easy-to-use graphic user interface (GUI). They employ a limited set of keys, each transaction can be completed in a few steps, each step is accompanied by an on-screen prompt for the user, the on-screen text can also be displayed in a local-language, and the text is Usually accompanied by images to enhance understanding. This makes ATM kiosks extremely user friendly. Using ATMs, some of the potential value added services that could be dispensed are: 1. Bill payments Long queues at collection centers or insufficient literacy for online payments pose a serious problem for consumers while paying utility bills. Hence, bill payment using ATMs will be a welcome feature for most consumers. Customers can register their utility accounts with banks. ATMs can then be used to check the dues and pay bills. Since these payments are linked to bank accounts, the approval of such payments will be faster and easier as well. On debiting their accounts, customers can receive Printed receipts for the transactions. This can be extended to accept credit card payments, institution fee payment, making charitable contributions, etc.
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2. Deposit automation using check imaging Also known as ‘envelope free deposits’, this offers functionality to scan a check for faster and assured processing. This is a win-win for customers who are able to ensure faster and assured processing as well as for banks who can reduce incidents
of ‘lost checks’ as well as the cost of resource utilization in check processing. This technology can be extended to offer customers a way to scan and pay bills at the
3.
ATM, or to complete a transaction that requires scanning a document. Sale of financial and other products ATMs can be used to sell products and services such as travel tickets, mobile phone recharge cards, financial products, and movie and theatre tickets, etc. The in-built printer can produce the relevant ticket, statement, or receipt, and the ATMs can
facilitate secure and approved payments. 4. Information kiosks ATM owners can charge customers a fee for providing non-financial information. For example, the Union Bank of India has used ATMs to establish ‘Village Knowledge Centers’ (VKCs). VKCs target the socio-economic development of the local rural population in remote areas by giving them information on various vital inputs such as weather, fertilizers, price of crops, etc. The bank also offers counseling via financial education centers at 51 of the 200 VKCs. 5. Third-party advertising Banks can effectively use the wait time at ATMs to promote brands, products, and services based on customer information available in their accounting and CRM databases. These can then be converted into potential sales. For example, if a customer has been making regular payments for the purchase of a product category, then advertisements and offers for those particular products can be displayed. If customers are interested in the advertised service or product, they can use the ATM to print a receipt with the contact details of regional sales representatives or the location of the nearest outlet.
.23 6. Remittances ATMs can be used to make cross-border remittances for migrant workers and tourists. This reduces the delay inherent in postal money orders or wire transfers, and eliminates the dependence on intermediaries and the need to travel to a brickand-mortar outlet. A recent news article quotes the Governor of the Reserve Bank of India (RBI) on how people without bank accounts can use ATMs to receive money. 7. Public announcements
ATMs can be used to make public announcements and disburse important information. For example, police in the UK have used ATMs to publicize their ‘don’t drink and drive’ campaigns.
Challenges to consider in using ATMs as a self-service channel Customers expect transactions across channels to have increased security and accessibility, and they also demand timely delivery of services. Before adopting ATMs to propagate self-service in various payments and non-financial transactions, ATM owners must review the challenges in doing so. 1. Secure payment: ATM owners must assure customers that payments through this channel are secure. The wide adoption of secure certified verification EMV (commonly known as ‘chip and pin’) is a major step towards providing this assurance. This method can authenticate a card and it can also verify a customer's identity. This secures the payment and drastically reduces chances of fraud. 2. Software threats: While ATMs are more foul-proof than the internet, they can be susceptible to malware attacks and anti-skimming jammers. ATM owners can reassure users by providing effective security solutions to protect against targeted threats and attacks. 3.
Regulatory norms: It is necessary to comply with local regulations before deciding
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Consistent and timely services: The best way to attract customers is to ensure that transactions are fast, secure, and consistent. Though speed is of essence, the large volume of consumer payment and service transactions, diverse range of technologies and multi-vendor terminals can load the ATM network infrastructure heavily. Enterprises must ensure persistent network communications and application performance for uninterrupted service availability. ATM owners must also be aware of third party hand-off issues and take steps to guard consumer interests.
Material Customer Satisfaction Level (MCS) Material customer satisfaction level has been examined on the basis of three variables i.e. reasonability of the fee charged, frequency with which problems are faced and the post purchase behavior of the customers.
1. Fee Charged Fee charged by the banks is one of the variables taken for checking customer satisfaction level. If customer feels that the fee charged by the bank is reasonable then he is satisfied and vice-versa. Five degrees of reasonability have been taken and they are coded as 5, 4, 3, 2, &1. There is direct relation between fee charged and customer satisfaction.
2. Problems Faced Second parameter for measuring MCS levels problems faced by the consumers while using ATM of a particular bank. If consumers are facing problems more frequently, customer satisfaction level will be less and vice-versa. There is indirect relation between the problems faced and the customer satisfaction. Three degrees namely often, rarely and never have been taken and they have rated as 3, 2, & 1 respectively.
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The purpose for which ATM is most often used ATM does not mean the plastic card and PIN (Personal Identification Number) but the services for which you can use it are the most important part. These services are cash/cheques deposit, fast cash withdrawal, view account balances & mini statements and request a chequebook or account statement.
Use Your ATMs as an Effective Marketing Channel
Using advances in technology to transform the ATM into an effective marketing channel provides financial institutions a host of benefits, and for return on marketing investment, the ATM has the potential to become a profit center once again. 1. Customization Through transaction personalization options, customers can preset their preferences for the types of transactions they want to perform and the information they want to receive, which leads to feelings of personalized relationships and loyalty. 2. Brand reinforcement ATM screen graphics and messaging can be made consistent with the financial institution’s other marketing channels, reinforcing messages with each ATM transaction. 3. Cross-sell opportunities One-to-one targeted messaging via an ATM can result in higher response rates than from other marketing channels. Additionally, financial institutions have the opportunity to cross-sell to non-customers who use the financial institution’s ATMs.
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4. Customer Data Marketing programs can be refined even further to target customers based on user information and specific responses (i.e., customer data) captured at the ATM. 5. Cost savings ATM marketing campaigns can be less expensive to create and distribute than marketing through traditional direct channels. 6. Advertising Some financial institutions have partnered with local merchants to deploy ATMs in their locations, offering coupons and other incentives to drive ATM traffic and increase merchant ticket sizes.
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CHAPTER-4 ROLE OF RBI Changes Made By Reserve Bank of India (RBI) On 15 August, 2014, the 68th Independence Day, our Prime Minister Narendra Modi announced a scheme called PradhanMantri Jan-DhanYojana in the cause of financial inclusion in our country for the benefit of millions of families who do not have bank accounts so far. Under this scheme every bank account holder will be given a RuPay brand debit card with an accident insurance cover of Rs1 lakh guaranteed for each poor family, so that all such families are covered with accident insurance to meet any crisis in their lives.
A day before this announcement by the Prime Minister, the Reserve Bank of India (RBI) announced certain changes to the ATM facility offered to bank customers and the charges levied for withdrawals through ATMs with effect from 1 November, 2014. According to the new RBI guidelines that come into effect from 1 stNovember 2014, savings bank account holders in metropolitan cities would be allowed only three transactions from ATMs of other banks and five from the same bank in a month. For any ATM transaction above the stipulated limit, a transaction fee of Rs. 20 would be charged to the account holder. The new transaction fee is applicable only for people living in six metropolitan cities including Mumbai, Delhi, Bengaluru, Chennai, Hyderabad and Kolkata. People living in smaller towns and other centers would continue to enjoy five free monthly transactions per month from the ATM of other banks and the charges for them include Rs. 20 for each cash withdrawal and Rs 9 for non-cash transactions. Account holders of zero balance and other no-frills accounts in non-metros are exempted from such transaction charges as of now.
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New Rules for Bank Customers
The transaction fee has been increased from the earlier limit of Rs. 15 to Rs.20 and the number of free transactions decreased from five to three for ATMs of other banks and five from the same bank in a month. Another important change in the new RBI guideline policy for ATM transaction fee is the fact that all ATM transactions including cash withdrawal, balance enquiry and changing of PIN number etc would be considered as an ATM transaction unlike in the past when balance enquiry was not considered a transaction as such.
The inter banking fee charged by various banks through ATM services will also increase since banks are using the fee as an incentive to install more number of ATM machines. While all the above reasons have played their role in the decision to some extent the game clincher has been Reserve Bank of India’s long term plan to promote the use of e - transfers and cashless transactions as much as possible to avoid the use of any black money in the system. The rise in ATM transaction fee is largely seen by financial experts as a sum culmination of all of the above factors.
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Reasons for Framing New Rules by RBI
The charges for ATM usage may be an unpopular decision taken by the Reserve Bank of India, the limit in free transactions is justified by the apex body considering high expenses for managing ATMs across the country. With an increasing number of robbery
attempts on various ATMs especially in isolated areas and in semi urban and rural areas, the banks have been forced to shell out funds to install a security mechanism apart from using CCTVs and manual security guards wherever possible.
With the Reserve Bank of India laying down strict security guidelines not to leave any ATM unmanned or without security cameras and other measures, banks are facing higher overheads to manage the ATMs .
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Comparison of ATM Usage Charges
For People Living in Metropolitan Cities Including Mumbai, Delhi, Bangalore, Chennai, Hyderabad and Kolkata.
BANK Same Bank
TRANSACTION CashTYPE withdrawal
TRANSACTION LIMIT
Balance Enquiry
5 Free transactions per month. Additional transaction will be charged at Rs. 20 per transaction
Change of PIN Mini Statement Cash withdrawal
Different Bank
Balance Enquiry Change of PIN
3 Free transactions per month. Additional transaction will be charged at Rs.20 per transaction.
Mini Statement
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For People Living in Non-Metropolitan Cities, Smaller Towns and Holders of Zero Balance and Other No-Frills Accounts
BANK
TRANSACTION CashTYPE withdrawal
TRANSACTION LIMIT
Same Bank
Balance Enquiry
5 Free transactions per month. Rs.20 is applicable for each cash withdrawal and Rs.9 for non-cash transactions.
Change of PIN Mini Statement
Different Cash withdrawal
Bank
5 Free transactions per month. Rs. 20 is applicable for each cash withdrawal and Rs.9 for non-cash transactions charged at Rs.20 per transaction.
Consumer Benefits ATMs have provided an important expansion of banking services that has benefited all consumers. Before the introduction of ATMs in the early 1970s, bank customers' access to their cash was limited to traditional banking hours. Customers often found themselves waiting in long lines on Friday afternoons just to withdraw enough cash to carry them through the weekend. ATMs opened a whole new world of convenience by eventually allowing access to banking services 24 hours a day, 365 days a year. Networks between banks, such as Plus, Cirrus, and Honor, developed so that customers could have access to their money through other institutions' ATMs throughout the world. To pay for that service, banks typically charge a fee to help defray the cost of belonging to the network. Before the 1990s owners of ATMs typically did not charge other banks' customers for the use of ATMs; indeed, such surcharges were expressly forbidden by most networks. But, in the early 1990s, local banks and other ATM owners, who could not cover the cost of maintaining ATMs that face a high demand for cash withdrawals from nonlocal banks, pushed for lifting the voluntary ban on surcharges. As a result, legislatures in 23 states passed laws that allowed individual members of ATM networks to impose surcharges. Operating an ATM that receives a lot of traffic but
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That not many local customers use makes no sense. ATMs generate huge costs, so banks were unwilling to provide free ATM services to noncustomers. The reason for that growth is simple: Allowing ATM surcharges has encouraged firms outside the banking industry, as well as banks, to put ATMs in more convenient locations where, without surcharges, ATMs may not generate enough bank customer traffic to be profitable. Those locations include supermarkets, convenience stores, and airports. Consumers now have the option of paying a surcharge for getting money from the new machines or going to other, less convenient, ATMs. Critics argue that without the surcharge consumers would get the convenience without the fee. In other words, consumers would still get the same service for free. In fact, fees have played a significant role in making ATMs more widely available. Before surcharges, a low-cost ATM needed 3,000 transactions a month to break even. Today, with income from
surcharges, the same ATM can break even with only 500 transactions a month. Prohibiting surcharges would limit the number and location of ATMs and inconvenience consumers. In effect, government would be levying a "time tax" on consumers by denying them the choice of convenience and forcing them to travel to their own banks to get cash.
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CHAPTER-5 INTRODUCTION TO ATMS ENCRYPTION METHOD
Introduction ATM also known as Automatic Teller Machine is a simple and yet security banking service. The basic concept is that an ATM allows an authorized cardholder to conduct banking transaction without visiting a branch. They are well known for its convenience to the customers, cost effectiveness to the bank and most importantly it is an extremely secure banking method. ATMs rely on authorization of a transaction by the bank via a secure communications network. Encryption methods are built into the communication network to prevent unauthorized transactions that could result in losses. This data focuses on Data
Encryption Standard and Advanced Encryption Standard, these are the encryption standards presently adopted by banks across globe.
Hardware and Software ATMs contain secure crypto-processors, generally within an IBM PC compatible host computer in a secure enclosure. The security of the machine relies mostly on the integrity of the secure crypto-processor: the host software often runs on a commodity operating system. In-store ATMs typically connect directly to their ATM Transaction Processor via a modem over a dedicated telephone line, although the move towards Internet connections is under way. In addition, ATMs are moving away from custom circuit boards (most of which are based on Intel 8086 architecture) and into full-fledged PCs with commodity operating systems such as Windows 2000 and Linux. Other platforms include RMX 86, OS/2 and Windows 98 bundled with Java. The newest ATMs with Microsoft technology use Windows XP or Windows XP embedded. [Lockergnome Encyclopedia 2004]
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ATM Encryption Methods ATM transactions are usually encrypted with DES (please refer to the next section) but most transaction processors will require the use of the more secure Triple DES by 2005. There are also many "phantom withdrawals" from ATMs, which banks often claim are the result of fraud by customers. Many experts ascribe phantom withdrawals to the criminal activity of dishonest insiders. Ross Anderson, a leading cryptography researcher, has been involved in investigating many cases of phantom withdrawals, and has been responsible for exposing several errors in bank security. There have also been a number of incidents of fraud where criminals have used fake machines or have attached fake keypads or card readers to existing machines. These have then been used to record customers' PINs and bank account details in order to gain unauthorized access to their accounts. [Lockergnome Encyclopedia 2004]
Data Encryption Standard
The Data Encryption Standard (DES) is an approved cryptographic algorithm selected as an official Federal Information Processing Standard (FIPS) for the United States. [Lockergnome Encyclopedia 2004] In DES, data are encrypted in 64-bit blocks using a 56-bit key. The algorithm transforms 64-bit input in a series of steps into a 64-bit output. [William Stallings 2003]. FIPS PUB 81, DES Modes of Operation, describes four different modes for using the algorithm described in this standard. These four modes are called the Electronic Codebook (ECB) mode, the Cipher Block Chaining (CBC) mode, the Cipher Feedback (CFB) mode, and the Output Feedback (OFB) mode. ECB is a direct application of the DES algorithm to encrypt and decrypt data; CBC is an enhanced mode of ECB which chains together blocks of cipher text; CFB uses previously generated cipher text as input to the DES to generate pseudorandom outputs which are combined with the plaintext to produce cipher, thereby chaining together the resulting cipher; OFB is identical to CFB except that the previous output of the DES is used as input in OFB while the previous cipher is used as input in CFB. OFB does not chain the cipher. [Federal Information Processing Standards Publication 46-2 1993]
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Advanced Encryption Standard There are cases where ATMs using DES has been breached within 24 hours. The most recent solution is to adopt a new encryption standard known as the Advanced Encryption Standard. The Advanced Encryption Standard (AES) feature adds support for the new encryption standard AES, with Cipher Block Chaining (CBC) mode, to IP Security (IPSec). The National Institute of Standards and Technology (NIST) have created AES, which is a new Federal Information Processing Standard (FIPS) publication that describes an encryption method. AES is a privacy transform for IPSec and Internet Key Exchange (IKE)
and has been developed to replace the Data Encryption Standard (DES). AES is designed to be more secure than DES: AES offers a larger key size, while ensuring that the only known approach to decrypt a message is for an intruder to try every possible key. AES has a variable key length—the algorithm can specify a 128-bit key (the default), a 192-bit key, or a 256-bit key. [Cisco Systems, Inc. 2004]
Smart Intruders Behind the friendly appearance of the Automatic Teller Machines, they are actually protected by some of the most advanced encryption technologies. However, ATM security requires progressively improving methods to keep up with smart intruders. A clear example is the upgrade from the Data Encryption Standard to the Advanced Encryption Standard, which is almost three times as powerful. In the near future, a new method will be adopted to protect ATMs from intruders with better technologies. Although, this is a constant battle between intruders and the bank, ATMs are still a very convenient, cost-effective and secure banking method provided to customers today.
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UNIT-2
Cash Deposit Machine
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CHAPTER-1 INTRODUCTION TO CDM MACHINE
Cash Deposit Machine The Cash Deposit Machine (CDM) is a self-service terminal that lets you make deposits and payment transactions by cash. All successful transactions are immediately credited and customers will be issued an advice slip confirming the transaction. Conventionally, depositing cash into your bank account can be a tedious affair as it has to be done within the banking hours and
you have to fill up a deposit slip and stand in a queue. To make the cash deposit process more flexible and convenient, banks have introduced Cash Deposit Machines and are expanding their availability across different locations to encourage electronic cash deposit without the assistance of banking personnel.
Why use a Cash Deposit Machine? With close to 13,000 billion rupees in notes issued in FY 2013-14, RBI’s recent data highlights the fact that 90% of monetary transactions still take place in cash. With the high amount of cash transactions, the need for an efficient mode to deposit cash is more than ever before. To facilitate easier deposit of cash, banks allow you to deposit cash through Cash Deposit Machines.
.38 A Cash Deposit Machine is capable of accepting more cash deposit transaction in comparison to an over-the-counter cash depository service. For example, banks usually stop their business transactions by 4 PM. However, people might need to deposit cash during different times of the day and that is exactly what a Cash Deposit Machine is designed for. And with your money getting credited into the desired account in real time, Banks are pushing to increase the availability of CDMs for customers’ convenience.
How does the Cash Deposit Machine help you? Your money gets instantly credited into your account You do not need to fill up any cash deposit slip or wait in long queues to deposit cash You receive immediate receipt No need to sort and arrange your cash according to denominations Facilities such as balance enquiry and mini statements are also available on a Cash Deposit Machine
You can deposit cash round the clock and throughout the year. A Cash Deposit Machine is enabled to function 24X7, even on holidays. Thus, you don’t need to wait for the bank to open to deposit money.
Salient Features of Cash Deposit Machine 1. Accepts stacks of up to 200 mixed denomination notes 2. Quickly counts, validates, and denominates deposited currency 3. Displays deposit details on screen for customer verification
.39 4. Cash is held in secure area and returned if customer rejects transaction 5. Notes are deposited to specified cassettes 6. Itemized deposit details may be printed on customer receipt 7. Fake currencies are detected.
Advantages 1. Instant credit in CASA account. 2. Immediate receipt. 3. No need to fill cash deposit slips. 4. No need to stand in long queues. 5. No need to sort and arrange cash denomination wise.
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CHAPTER-2 DETAIL STUDY
System Overview
The project is designed to provide fully automatic cash deposit machine. The hardware consists of LCD screen for displaying option to select the bank and enter Account No in which cash is to be deposited and also guides the customer to next steps .The carriage is provided to carry the currency notes one by one from customer where camera captures image of every note and send the data image to PC with Matlab. Every data image of note is compared with ideal stored image of every appropriate type of note. Every note is passed through UV light to detect the originality of note which consequently results in acceptance and rejection of faulty notes.
“Figure1. Database contexts” Spindle is used to push notes from carriage to storage container of notes. Counter is provided to count the cash and counted data will be sending to MC.
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CDM Provide Busy Customer Service
1.
Improved levels of convenience and security
2.
Improved speed of deposit and ease of use
3.
Reduced queuing time, increased customer satisfaction
4.
Unique receipt slip issued after each deposit made
5.
Revenue generating opportunities, created by re-deploying staff to more profitable activities
6.
Flexibility to process cash at a convenient time or to outsource task
7.
Speed of transaction minimizes customer exposure to risk of attack
8.
Enhanced management information
.42 Customer Requirement Banks customers’ taste and desire have begun to raise the stakes of expectation of exceptional services. Customers want to transact their banking transactions at any time and location convenient for their life-style. They want to pay their regular household bills. The four forces - customers, technology, convergence and globalization have the most important effect. The success of electronic banking, as agued by many researchers, depends probably on bank service quality, customer preferences and satisfaction. Recent studies found that consumer behavior is changing partly because of more spare time. The way of use of financial services is characterized by individuality, mobility, independence of place and time, and flexibility. Historically, banks have taken the attitude that they will provide customers with the services and, the banks, wish to provide. In order to survive both from domestic and the increasing level of global cross-border competition, banks need to change their process of servicing their customers.
Benefit of automatic Banking The perceived benefits of electronic banking have been documented in recent studies, especially several electronic distribution channels available for banks in United States and concluded that customer orientations towards convenience, service, technology, change, knowledge about computing and the Internet affected the usage of different channels. Convenience of conducting banking outside the branch official opening hours has been found significant in cases of adoption. Banks provide customers convenient,
inexpensive access to the bank 24 hours a day and seven days a week. Literatures indicate the movement away from cash transactions and in words of the use of non-cash payment has continued to rise with increasing value. Tellers are today equipped to issue receipts (deposit slips) for cash deposits the service of ordering bank draft of certified cheques made payable to third parties has also been increasingly automated .
.43 reduction in the percentage of customers visiting banks with an increase in alternative channels of distribution will also minimize the queues in the branches. Increased availability and accessibility of more self-service distribution channels helps bank administration in reducing the expensive branch network and its associate staff overheads. Bank employees and office space that are released in this way may be used for some other profitable ventures.
Customer always require fast technology New technology has raised your customers’ expectations, and whilst they may come from many different backgrounds, lifestyles and professions, your customers have one thing in common: Choice of leisure time, work patterns, shopping, and the choice of how, when and with whom they carry out their banking requirements. In this competitive environment the winners are responding to their customer’s needs, and improving the banking experience with 1.
A convenient customer service
2.
A modern retail environment
3.
Faster transactions and improved security
4.
Extended hours access to services Communications Complete with a monitoring system to constantly verify operation and status of the CDM,
whether remotely or centrally located. A file transfer utility is also available for retrieving audit and event history files. Automated Cash Deposits help you deliver more efficient Self-Service solutions. Our range of Cash Deposit Machines has been designed either for free standing or in the wall installation
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Unit-3 ANALYSIS OF DATA
1. Classification as per data collected in regards to Account In bank: No. Of Depositor
Percentag e
Saving Account
20
66.67
Current Account
4
13.33
Fixed Account
6
20
Recurring Account
-
0
Total
30
100
Bank Account
No. of Depositor as per Account
20
Saving Account
13.33 66.66
Fixed Account Current Account
.45 2. Classification as per data collected in regards to satisfaction level of ATM service: 3. Classification as per data collected in regards to check that bank have enough ATM machine in their area:
No. Of Percentag Satisfaction Percentage ATM e Level Machine
Expected Ans
Yes
21
70
No
11
30
Total
30
100
Expected Ans
Yes 63.33 Satisfaction Level19Of ATM Services No
11
36.67
Total
30
100 Yes
30
No 70
ATM Machine in their Area
Yes 36.67 66.33
No
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4. Classification as per data collected in regards to ATM they always prefer while withdrawing money: ATM
No. Of ATM Machine
Percentage
Home Bank ATM
20
66.67
Other Bank ATM
10
33.33
Total
30
100
5. Classification as per data collected in regards to procedure they know if they forget the PIN:
Expected Ans
People Who Percentage Known The Procedure
Yes
15
50
No
15
50
Total
30
100
ATM Machine Prefer While Withdrawing Money People Who Known The Procedure Yes No
33% Atm Other Bank ATM Home Bank 67%
50%
50%
.47 6. Classification as per data collected in regards to procedure they know if they have to change the PIN:
7. Classification as per data collected in regards to bank who provide Cash Deposit machine:
Expected Ans
No. of Percentag People Bank e Who Percentage Providing Known The CDM Procedure
Yes
24
80
No
06
20
Total
30
100
Yes
25
83.33
No
05
16.67
Total
30
100
Expected Ans
People Who Known The Procedure ATM Machine Prefer While Withdrawing Money Yes No
Yes No
17%
20% 80%
83%
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8. Classification as per data collected in regards to satisfaction level of CDM service:
9. Classification as per data collected in regards to Online transaction the ATM user used:
Expected Ans
Yes No Total
Person Percentag Satisfaction Percentage Who Does e Level Online Transactio 23 n
76.67
07
23.33
30
100
Expected Ans
Yes
10
33.33
No
20
66.67
Total
30
100
Satisfaction Level Of CDM Services
Yes
30
No 76.67
ATM Machine Prefer While Withdrawing Money Yes No
33% 67%
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10. Classification as per data collected in regards to Awareness about other service provided by ATM Machine:
Expected Ans
No. of People Who Known
Percentage
Yes
8
26.67
No
22
73.33
Total
30
100
Person Who Known The Other Service Provided By ATM Services
26.67 Yes No 73.33
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Findings 1. (As per Table no.1), 66.67% Customers are having saving account, 13.33% customers are having current account and 20%. Customers are having fixed account. 2. (As per Table no.2), 70% of customers are satisfied by ATM services while 30% of customers are yet not satisfied. 3. (As per Table no.3), 63.33% customers think that they there are enough ATM machine in their area while rest 36.67% of the customers doesn’t think. 4. (As per Table no.4), 66.67% customers usually withdraw from their own bank ATM while rest 33.33% customers used others bank ATM. 5. (As per Table no.5), 50% of the customers known the procedure about how to change the pin if they forget the pin while other 50% of the customers don’t know. 6. (As per Table no.6), 80% of the customers known the procedure to change the pin rest 20% of the customers don’t know how to change the pin. 7. (As per Table no.7), 83.33% of bank provides Cash Deposit Machine while 16.67% of bank yet doesn’t providing Cash Deposit Machine. It means banks are still working on CDM services and taking initiative to bring up the CDM service facility. 8. (As per Table no.8), 76.67% of customers find satisfied by CDM services while 23.33% of the customers are not satisfied by CDM services. 9. (As per Table no.9), 33.33% of the customers used their ATM Cards for carrying out their online transaction while rest 66.67% customers not used their debit card for online transaction. 10. (As per Table no.10), 26.67% of the customers known that ATM machine also provide other useful services like mini statement, mobile recharge facility, last 10 transaction, etc while 73.33% yet don’t know the services provided by ATM in regards to above services.
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Conclusion
Ties multiple accounts to one ATM card and PIN combination Allows a cardholder to have as many accounts as desired (more than one checking, more than one credit card, more than one loan, etc.) Includes all of the account types specified by the assignment – “checking, savings, loan, mortgage, car or boat loan account and credit card account” – although we chose to create “vehicle loan” as a loan account which encompasses car, boat, motorcycle, etc. Allows cardholders to make balance inquiries, deposits, withdrawals, account payments, and transfer funds – all with the appropriate accounts displayed for selection depending upon the type of transaction Limits the amount of a withdrawal from an account to $200 – with no limits placed on fund transfers Limits the number of transactions per day to 10 Provides cardholder with the option of a receipt. Instant credit in your account. Immediate receipt. 24/7 availability. No need to fill deposit slip. No need to stand in long clues. No need to sort and arrange your cash denomination wise. No extra charge on direct cash deposits.
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Annexure
QUESTIONNAIRE (For Customer) Name-____________________________________________ Age-______________________ GenderMale Female Educational Qualification-____________________________ Designation-_______________________________________ 1. In Which Bank Do You Have Account? ______________________________________________ 2. Which Type Of Account Do You Have? Saving Recurring Fixed Current 3. Are You Satisfied By ATM Services? Yes No 4. Does Your Bank Have Enough ATM’s In Your Area? Yes No 5. Which ATM You Always Prefer While Withdrawing Money? ________________________________________________ 6. What Is Maximum Cash Withdrawal Limit Per Day? ________________________________________________ 7. Does Your Bank Levy Any Service Charge For Use Of Other Bank’s ATM? Yes No 8. If Yes, Then How Much? ________________________________________________ .53 9. Do You Know The Procedure If You Forgot The Pin? Yes No 10. Yes
Do You Know The Procedure TO Change The Pin? No
11. Machine? Yes
Does Your Bank Provide Cash Deposit No
12.
Are You Satisfied By The Services Of
Cash Deposit Machine? Yes
No
13.
Do You
Use Debit Card For Online Transaction? Yes No 14.
Are You
Aware About Any Other Services Provided By ATM Machine? Yes No 15.
Any
Suggestion, ____________________________________________________
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Websites
www.ijarcsms.com http://www.atmmarketplace.com/whitepapers/5157/TheFuture-of-ATMs-Mobile-Security-and-Regulations-Oh-MyInfographic http://en.wikipedia.org/wiki/atm http://en.wikipedia.org/wiki/debit_card www.articleblast.com “A Brief Introduction to the Automated Teller Machine”. www.rbi.org.in/scripts/NotificaticationUser www.businessinsider.in Blog.bankbazaar.com/new-rules-for-atm-usage slideshare.com www.ibef,org
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