Automated Teller Machines (ATMs) have been doing the job of the cash teller for over the past three decades and now, they are doing yet another job for the banks – of disbursing instant personal loans to customers. When withdrawing money or checking your balance through an ATM, you may see a pre-approved personal loan offer on the ATM screen. If you are interested in the offer, you can click on the screen to further the process of availing a personal loan. Simple, isn’t it?
Many banking institutions are trying to leverage the ATM to push their banking and financial products as the ATM is a touch point that is frequented by all kinds of customers at all times of the day. The facility of disbursing instant personal loans through ATMs can prove useful during times when the banks are closed and the customer is in urgent need of a personal loan.
Instant personal loans through ATMs are generally pre-approved offers that are given out to eligible customers. Big data analytics is employed by banks to capture details such as income, work profile, personal details, etc., of the customer to assess their credit-worthiness and make a pre-approved loan offer.
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tracks the customer history, their frequency of withdrawals, their current account statements and the amount usually withdrawn and the customer’s credit rating and history of payments.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.
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