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In today’s technological world, technology has been slowly taking over manual tasks. From improving output on the production lines to more specialized tasks that improve the speed of the process and cut down on costs, machines seem to be taking over. This trend has moved from production to other sectors such as Banking. From the inception of ATMs, the customer interactions with bank tellers have been slowly decreasing.
We visit the ATM to withdraw money and drop off checks and the interaction with cash tellers has been on the decline. ATM’s have now progressed from slowly taking over the job of the teller to taking over the job of a loan officer for small credit loans. Some of India’s leading banks have begun taking part in the process to automate loans and among them HDFC, SBI and even Axis bank have made significant headway.
Banks are keen on capitalizing on retail loans since corporate loan space seems to have come to a standstill. The process of availing loans from ATMs is the result of big data analytics
HDFC has been improving on the functionality of their ATMs and have begun the offering of any time loans. Loans are provided based on analytics engine that tracks the customer history, their frequency of withdrawals, their current account statements and the amount usually withdrawn and the customer’s credit rating and history of payments. Based off these factors, the ATM offers pre-approved loans.
The ATM is now capable of providing loans that have a 10 second approval time and it seems to be a big hit with their customers. HDFC has already reported that over 12% of the retail loans provided by the bank are coming by way of ATM personal loans.
On the lines of the Insta loan offered by HDFC, the ATM personal loans offer pre-approved loans to customers within the span of time taken for them to finish their transaction. HDFC has an ATM network of 11,907 ATMs across the country and the ATMs are the biggest touchpoint for customers. The bank has over 2.2 crore customers who make transactions on their ATMs with debit cards. The number of ATM transactions in a month alone for HDFC reaches upwards of 3.4 crore transactions.
Since the ATM is where most customer engagement takes place, the ‘Fast personal Loan’ offered through ATMs to its customers can not only be viewed but also availed with only a few clicks of the screen. The ATM personal loan will be launched in stages with the first stage targeting corporate customers and those who hold a salary account with HDFC.
SBI is also adopting the method of providing personal loans through ATMs and has already begun giving out tenders for installation of multi-vendor software. SBI has an ATM network 50,000 strong and receives close to 300 to 400 hits on their ATM network on a daily basis. SBI is using the same principle of customer analytics to push personal loans as well as insurance products on their ATMs.
Based on analytics, a personal loan offer is displayed on the screen when a customer makes a transaction. If the customer is interested, all they need to do is agree to the terms and conditions of the loan and enter their registered mobile number for verification. Once the number has been verified, the loan is credited to their account within seconds.
Personal loans from ATMs have taken a path close to what banks used to offer previously which were the pre-approved offers. The difference being, ATM loans can be credited to the customer within a matter of seconds. The advantages of these loans are that they reduce disbursal time, can help in cases of emergencies and can tap into a vast market.