Saturday, June 15

The science behind banks? ATM location strategy

Have you ever wondered why different banks’ automated teller machine (ATM) kiosks are located adjacent to one another or in the closest area? Have you noticed lines forming at these grouped ATMs to take out cash, while there is scarcely anyone using the one ATM that is half a kilometer away?

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Let’s first examine how most banks choose where to put an ATM before we start searching for solutions. Banks install ATMs for two purposes: first, to serve their own clientele; second, to get transactions from other bank clients that will generate income for them.

Banks install on-site ATMs, or those that are located next to or within their locations, to serve their own clientele. The ATMs are placed in high-traffic areas, such as marketplaces, large residential complexes, large commercial/office complexes, significant intersections, train stations, and bus terminals, to collect transactions from other bank clients. These off-site ATMs are also used by them to serve their own clientele.

Additionally, banks position ATMs in key areas like trade centers, airports, and historic structures. They even pay a premium leasing fee for the location, mostly doing this for publicity purposes and to increase brand awareness. These ATMs have lovely interiors and bright lighting.

The property is examined geodemographically in order to determine the best position for an off-site ATM kiosk. Although prospective foot traffic is the main criterion, other considerations are also examined, including rent, a sufficient power supply, connection, customer parking space availability, the location’s security risk profile, and the closest cash feeder branch.

Aside from whether the location is near to a restaurant, a liquor store, or a fish and meat market, other intriguing elements taken into account are whether the road outside the location is one-way or two-way. The ATM kiosk must be on the left side of the road if it is a one-way street (for right-hand drive nations like India). The site can draw rats if it is next to an untidy restaurant, which could harm the cable and other components. For obvious reasons, most banks prefer not to place an ATM near to a bar or liquor store.

Although ATMs may be installed by banks in places meeting the aforementioned requirements, things might eventually change. For example, a bank discovered that transactions in one of its high-traffic ATMs abruptly decreased when the road where the ATM was situated was designated as “one-way,” even though the ATM was on the incorrect side of the street.

Another bank experienced a decline after years of consistent high transaction volume and well-located ATM use. Upon closer inspection, they discovered that the issue was caused by mice gnawing on the ATM’s cables since a restaurant had recently opened next door. After a cement store opened up next door, a third bank discovered that cement dust was blocking the ATM card reader.

An ATM will draw competitors as soon as it is installed and beginning to draw a respectable volume of transactions. You will soon notice that a large number of ATMs are being installed nearby. This idea, known as clustering, is widely used in the retail sector. When one auto dealer opens up shop in one location, other auto dealers visit as well.

You could also choose, as a consumer, to visit a place with several ATMs. There’s always another ATM close by to satisfy your needs in case the first one breaks. Even if you use an ATM owned by another bank, there are some transactions that are free, so you shouldn’t worry too much about fees. Find out from your bank how many free transactions you qualify for.

Consumers are frequently hesitant to use ATMs operated by other banks because they are unsure of what to do in the event of a problem. Should you find yourself in such a circumstance, make sure to safeguard your transaction slip or the transaction’s SMS alert and get in touch with your own bank right away.

They will acknowledge receipt of your complaint and take appropriate measures to guarantee that the transaction is reversed to the extent that the ATM did not give you the cash. A chargeback is the procedure by which your bank will initiate a dispute with the bank whose ATM it was; this procedure is a component of any payments network’s dispute resolution and management process.