The global financial sector is constantly evolving its business outlook and strategies to cope with regulatory and competitive pressures, stressed interest rates, and dynamic customer expectations. The COVID-19 pandemic poses greater challenges to companies in ATM managed service and retail banking markets as they strive to manage daily operations while ensuring services are not disrupted. Amidst these changing market conditions, retail banks are encouraging customers to leverage online banking facilities or rely on ATM centers for basic transactions. As a result, ATM service providers need to upscale existing technology to prevent fraudulent practices and ensure seamless transactions to their customers.
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How the retail banking sector will be affected
Decline in Cash Flow and Credit
Government restrictions due to COVID-19 across countries have disrupted business operations in the end-user sectors. This includes industries such as retail, logistics, and manufacturing. Also, due to lockdowns and economic uncertainty, businesses have restricted spending (new investments). Also, they are not willing to avail credit from banks, which in turn is leading to a decline in cashflow in retail banks.
Increasing Focus to Reduce In-person Meeting and Physical Interactions
Banks are evolving by implementing digital technologies such as remote operations, advanced kiosks, and virtual meetings (video KYC) to replace in-person meetings and minimize physical interactions. For instance, a prominent multinational investment bank and financial service provider has mandated work from home for its employees in the UK from February 2020 due to the COVID-19 pandemic. This ensures a reduced physical interaction between both employees and customers.
ATM managed service providers need to be aware of
Introduction of Advanced ATMs
The ATM managed service providers are introducing Mobile Cash ATMs, a new contactless ATM, enabled with QR code-based operations. Mobile Cash ATMs allow customers to scan the QR code with the help of smartphones to reduce contact with ATMs. Globally around 325 companies are currently working on advanced ATMs equipped with a voice-enabled feature for entering the PIN and restricts contact with ATMs.
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Difficulty in ATM Service Operations
The COVID-19 pandemic has affected operations across the ATM service market globally. Cash replenishment and on-site repair services is a major challenge for ATM operations and service providers. Take the example of an ATM service provider in India. It faced disruption in servicing and refilling during the lockdown. During normal circumstances, the company used to service and refill around 60,000 ATMs. But during the lockdown, it was able to serve only approximately 30,000 ATMs in two weeks’ duration.
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