Smart urban banking; from ATM to VTM
IUESA: Expansion of Information and Communication Technology (ICT) has created fundamental developments in all dimensions of human life. With the rapid advancement of information and communication technology and profound effect of instruments and electronic equipment, the importance of such devices and applications is increased every day (Schneider, 2006). Trade and commerce have been influenced by ICT more than other economic activities and has caused structural changes in global economic. Electronic Commerce (EC) includes purchase and sale, marketing, service presentation and transfer of goods and services on websites. Today, EC is considered as one of the indicators of countries’ development and governments try to provide necessary contexts and infrastructures to expand it (Moqli, 2007). Therefore, it is necessary to dealing the issue of electronic banking to achieve acceptable level of EC.
Today, due to the internal conditions and international status of Islamic Republic of Iran, development necessity in country’s banking system is felt more than before; hence it is necessary to be considered it, according to the role that a proper banking system has as one of the most fundamental country’s development programs (Alvani & Riyahi 2003)
Electronic banking is a kind of banking service used in the U.S in 1995 for the first time and then it was expanded in other countries (Wendy W.N. Wan et. al. 2005). Establishment of electronic banking both improves the quality of services and decreases banks’ costs 60% to 70% (Akinci Serkan et. al. 2004) and it can create comprehensive development by communicating with rapid pace with most of contacts and presenting services base on individual’s needs.
During the recent years, e-banking like internet bank, ATMs, PoS and etc. play a fundamental role in everyday lives of people and they reduced the volumes of lines in the bank’s branches Misra (2001). E-banking is defined as the use of technology providing interaction with banks via different channels such as internet, ATMs and real physical branches.
People refer to ATMs instead of banks’ branches to do affairs like money transfer, cash withdrawal, getting account balances, payment of installments of facilities, paying bills, receiving account turnover and such services. In fact, the reason of wide acceptance of the public of ATMs is removing some limitations that people face with them.
One of the most important achievements of using these technologies is elimination of two conditions of time and place from bank services (Mirahmani, 2006). In this regard, one of the advantages of e-banking and particularly ATMs compared with bank branches is their 24-hour servicing system, being shorter the waiting queue and being broader network of devices. In the recent years, current instruments for e-banking, in spite of all the advantages they have, have reached to a deadlock point. The point, that is their weaknesses in comparison with banks, is inability of ATMs in presenting services needing two sides’ interaction both client and bank such as opening types of bank accounts, receiving interbank checks, receiving or cashing bank checks, receiving facilities or even becoming aware of necessary conditions for receiving special facilities, receiving advice for investment and etc.
Bank Shahr as an innovative and creative one in presenting new banking services could obtain acceptable situation whether among domestic banks or regional ones. In this regard, Bank Shahr has eliminated the shortcomings of existing devices by finding a solution to this problem and presenting services covering 70% of services of banks’ branches via a device called Virtual Teller Machine (VTM.)
VTM entrance to the cycle of banking system could be considered as a landmark in electronic banking system. New generation of e-banking was born by VTM entrance and existence of some services based on account from bank branch. Using banking kiosks and particularly VTMs (which are the achievements of Bank Shahr) decreases number of branches and costs of banks and also market share of bank does not destroy by using these services.
VTM is almost similar to a perfect bank branch and a bank expert communicates in the form of video (Virtual Branch Chief) for interactive affairs with clients even 24 hours a day.
Many presented services in the traditional form of banks can be presented via VTM by integrating the possibility of HD video communication, video surveillance, and financial automatic terminals, hand-encrypted signature, identification card and face to face video communication.
Available reports from banks such as Kuwait Bank show that VTM has decreased about 30% to 40% of personnel costs, it has increased 320% of servicing time and has presented 90% of branch facilities.
Taking into account all of the above items regarding new technology called VTM, it can be concluded that this product is a step toward using less of bank branches. As a result, banks’ costs and also opportunity cost of clients arising from waiting in bank branches will be decreased considerably.
According to the importance of resistive economy in the current conditions and necessity of maximum efficiency of present sources, reducing the costs of presenting services is a necessary task and it is tried so as to achieve it.
Bank Shahr can provide more investment in economic plans by decreasing the costs of presenting services and this task results in the growth and development of urban economics. For this purpose and due to the mentioned measures, Bank Shahr can achieve to a large part of its goals and duties such as supporting construction and infrastructures projects parallel with citizens’ welfare.