A number of banks have in the past few months, joined the Inter switch better known as Bankom.
This is the service whereby customers of member banks can carry out simple transactions like depositing or withdrawing cash or cheques at any ATM belonging to the Inter switch group.
Centenary Bank, the largest bank in terms of customer numbers, GTA, CBA, have joined DFCU, Cairo International Bank, Finance trust, Opportunity Bank, Finca, Global Trust and UBA among others to ensure that customers of either bank can easily access services at Automated Teller Machines (ATMs) of member banks. Kenya Commercial Bank (KCB) is joinig soon.
The benefits to customers and the financial institutions are many;
First of all customers need not carry sums of money while travelling to distant places because they can conveniently withdraw or deposit money at the nearest Inter switch. This helps in reducing risks of robbery and other attendant security risks.
Secondly, banks don’t need to open cash points everywhere. All they need is to agree on who opens ATMs where and when and to ensure that they are well serviced all the time so that customers can withdraw cash or deposit any time need arises.
We all know the huge costs banks pay to maintain ATMs. There has to be security at each ATM, there is transporting cash, there is servicing the machines to ensure they have power all the time and also technicians have to be on alert all the time to ensure the machine is functioning.
But all these costs can be narrowed down if all banks join this service. In Europe, Asia and America and even in some African countries all banks are required to join the inter switch. What can be agreed is that the parent bank (The bank owning the cash point) ensures that there is liquidity (cash flow) all the time.
Banks can agree on the minimum number of cash points in a district, commercial area or region. They can agree on sharing information when opening a new cash point so that they avoid duplication.
It is common in Uganda today to see banks with outlets at malls like Garden City, Freedom City, Shoprite Lugogo in Kampala and other locations with many banks lining up in the same location whereas one ATM can serve customers.
Each banks has to meet the cost of paying for security guards and servicing the ATM. These can be reduced when all banks join the Inter switch point.