KARACHI – The State Bank of Pakistan (SBP), warning of risks related to e-banking components like Automated Teller Machines (ATMs), has urged banks to mitigate perils prudently.
“The rapid development of e-banking capabilities, in addition to benefits, carries risks of its own,” State Bank Deputy Governor Muhammad Kamran Shehzad told participants of a discussion on ‘Managing ATM Security and Risks in its Operations’, organised by Messrs Phoenix Armor at a local hotel on Tuesday.
The SBP deputy governor said that mitigation of these risks was imperative, a pre-condition for which was to first recognise risk and then take steps to address and manage them in a prudent manner, according to the fundamental characteristics and challenges of e-banking services. He stated that the State Bank, which was cognisant of the seriousness of IT security and the ever-increasing risks facing it in changing business environment, had laid down detailed guidelines for IT Security in 2004.
Kamran, as a chief guest, said the electronic banking had become the need of the hour as it would not only enhance business volumes of banks but would also increase their outreach to un-banked areas. The deputy governor said that use of enhanced technology had improved retail banking model and spurred development of new electronic retail products through alternate delivery channels including ATMs, mobile phones/branchless banking and the point of sales (POS).
He added that statistics show that ATM is the predominant alternate delivery channel of e-banking being used by the customers and lead the retail level e-banking/online services in terms of volume. Of the total e-banking transactions during July-September 2010, ATM transactions represent 59 percent of the total volume, he said.
He further said that development of a robust and reliable system, providing easy access throughout 24/7 and readily supply of quick cash without waiting in long queue was the key behind a high volume of ATM transactions. “As a number of ATMs sustain growth, with an increasing branch network, volume of ATM transactions is also expected to grow further,” Kamran observed. The deputy governor told participants that as of September 2010, banks had 4270 onsite ATMs.
He, however, emphasised upon the need to ensure provision of uninterrupted ATM services to customers and take responsibility for resolution of all types of issues emerging from outsourcing of ATM replenishment. Kamran said that growth in e-Banking, particularly enhanced ATM network had also been made possible through the joint efforts of the State Bank and the banking sector.
