You have to admire human ingenuity. In less than half a century, banking has vastly improved from a manual system limited by location to a global electronic network that means a customer can be served anywhere on the planet provided they have the necessary utilities.
One of the required items is the ATM card. I recently ran into a prominent bank CEO who proudly told me that 80 per cent of his bank’s ATMs were available at any time in the banks footprint of operation, and that the ATM network provided by the bank was one of the most intricate and successful in the region.
He did mention that the ATM performance should be higher, probably at an average of about 95 per cent at any given time. Well, there are factors that hinder this.
Machines tend to run out of cash. Their software or network connectivity fail too sometimes.
And in extreme cases, power outages on a grand scale leave some of the machines looking like glistening fixtures on walls.
I mentioned to the CEO that I knew of an ATM that belonged to his bank and had not functioned in more than a month. The net effect of ATMs failing is beyond one of convenience.
While the machines are supposed to be convenience inventions, it is a bother to walk around looking for the one functioning machine in town or in the neighbourhood.
The situation becomes dire when you happen to be in a small town where the bank has only one ATM and it has stopped to function.
Unless your bank is represented by a local cash agent, you could find yourself in trouble, often at an awkward hour and sometimes in a foreign location. Granted, this may be an isolated case, but it is still valid.
In other words, banks have been jostling for new customers who they are now struggling to support.
At the end of the month, some ATM halls get choked with transacting customers because other machines have failed to serve them, the two most frequent faults being that the network has failed or the machines have run out of cash.
Which brings the question: If these are known problems, why haven’t solutions been found once and for all? After all, Kenya is positioning itself as a technology leader and business hub in the East African region.
It comes down to one factor: customer service, and in this case, a lack of it. Banks appear to be more focused on the overall balance sheet.
Once the customer is hooked, the assumption is that they are not going anywhere.
Therefore, the bank feels confident to assume that a customer who finds himself or herself at a machine that is not working will look for another elsewhere or go to queue in a banking hall if time allows, and get charged for daring to withdraw a small amount of money over the counter.
Then there is the issue of security. ATMs are secure as long as the right party with the correct credentials is standing before the machine. It does not help when that party is under duress from criminals.
South Africa, due to the high number of crimes related to the ATM, developed a revolutionary solution in the form of a “stop card”.
If the card holder had been a victim of a crime, all they had to do was insert the “stop card”, enter the PIN, and deactivate the missing card.
The concept worked well, but it did not spill over to other countries. Why it is not here is a big surprise.
There is not a single excuse for a bank to have a machine down for more than a couple of hours, and when it gets critical, it is even more important to scale upwards to meet the demand.
It is a bad experience to be away and your bank is unable to fulfil your cash request due to such a failure, and you find yourself stranded without money in a foreign country. It happens.
If banks are serious and committed to their customers, then service delivery needs to improve drastically. An 80 per cent availability is not good enough.
It only means that banks are not as successful as they claim to be, and that they have room to improve. And they need to.
Mobile money is more than a threat to traditional banking. If its service improves and it gains better availability internationally off a single platform, and agents keep increasing, then banks will find themselves looking more like dinosaurs in the retail sector.
Network and response to distressed machines need to improve overnight. ATMs still represent an important aspect of retail banking, but this will change if banks do not improve.