Businesses handling large volume of cash in transactions are set to cut the time it takes to validate and sort bank notes with the introduction of a new banking system. The Automatic Cash Deposit Machine (ACDM), a product of South Africa’s CashAccessSys was Introduced into the market mid-April and is expected to significantly reduce long queues at point of sales and in banking halls.
Komtel Kenya, the product’s local distributor, said that it ensures 70 per cent faster transaction processing compared to traditional manual systems. Customers must know their account numbers or have ATM cards to make deposits. The system has been in use in South Africa, Turkey, Kuwait, Oman, Saudi Arabia and Iran, among other countries. It is installed in banking halls, shopping malls and ATM lobbies. Caltex, Shell and Total oil companies use it to carry out secure point of sale transactions.
In Kenya, it could be adopted by supermarkets, mobile money transfer agents and banks. Previous attempts to replicate the system in Kenya failed owing to poor marketing and lack of awareness by banks. “Your cash dealings are set to become much easier and convenient as the cash deposit machine will be a self-service work station that will allow you to make deposits and payment transactions by cash without having to wait in line for hours or rushing to the bank during working hours”, said Komtel Kenya general manager Abdul Malik.
Besides, the system also detects fake money and issues an advice slip confirming transactions. The system’s inbuilt software is customised to the bank’s requirements. Institutions in Kenya grapple with losses through robbery attacks as employees ferry money to be banked. CashAccSys managing director Fred Scherf said that in case a bank faces robbery, then the system delays break in as alarm is raised. This is owing to its tight and encrypted security measures. “This innovation has a bag capacity of up to 15,000 notes, a safe which requires two keys to open and can validate multiple currencies irrespective of their orientation, face up or down,” said Mr Sherf.
“There is a note validator which counts the cash according to denominations of currency but also rejects fraudulent notes.” According to Habil Olaka, the CEO of the Kenya Bankers Association (KBA), there is a need for financial institutions to improve systems and continuously engage customers, even as new technology emerge. His caution is informed by bank-related fraud running into billions of shillings. Deloitte, a consultancy firm puts the figure at Sh4.06 billion, a sum backed by the 2015 Kenya Cyber Security report.
Retailers are among users prone to fraud; Nakumatt estimates transaction fraud in the retail business at Sh3 billion annually. This new teller machine innovation, presents a sophisticated platform with highly encrypted data that could be the answer to constant transaction fraud that has riddled the Kenyan industry. As the system is embraced locally, customers, analysts and financial institution wait to see if the new technology will shield retailers and bankers from losing billions from crooks at their points of sale. CashAccSys said the innovation further allows clients to deposit cash on a 24 hour basis reducing the risks Kenyans take walking home with cash when banks close operations.
“The system has a software configuration which allows clients to deposit cash with their various banking institutions,” said Mr Scherf. KPMG’s Issues and Insights report on the sub-Saharan banking sector states that Kenya’s banking sector could experience more revenue surge with introduction of sophisticated cash deposit devices. According to the consulting firm, the sector consists of 43 commercial banks, one mortgage finance company, nine microfinance banks, seven representative offices of foreign banks, 94 foreign exchange bureaus, seven money remittance providers and two credit reference bureaus.
The future looks promising with ACDM innovation focused on enhancing productivity in the sector. Komtel Kenya is positive that the innovation will be adopted locally to boost security. “We forecast a rise in demand for this particular technology in tier 1 and 2 banks in the next 12 to 24 months spreading to all bank branches and offsite locations and we plan to tap into the growing banking and retail sectors to realise growth,” said Mr Malik.
Besides being a cash deposit facilitator, the firm offers consultancies to banks, other financial institutions and retails on currency and foreign exchange rates. This particular technology is expected to reduce the number of employees financial institutions contract or take up full time to handle their cash processes. It therefore helps institutions to reduce costs, increase efficiency and productivity. Further, it improves service access for consumers, and creates opportunities for the technology savvy to manage the innovation.
ACDM is just among the numerous banking innovations that are new to Kenya but have been embraced globally. The Automatic Teller Machines now come with sophisticated internal systems that try to solve issues of fraudulent transactions facing the industry. In Chicago, US for instance, customers of Wintrust Financial scan their phones at ATMs to get cash without using their debit cards.
Through mobile banking app, users can perform a standard ATM transaction in a mere seven seconds. Wintrust has been testing hands-free, card-free ATM transactions since 2013, and claim to be the first bank in the US to make the switch to the new technology. Other ATM and mobile connected technologies in the US use QR code (quick response code) to verify the customer’s account. In this case, no PIN entry and no card swipe is required hence ATM fraud is close to impossible via the system. New technologies also use biometric verification allowing ATM’s to authenticate users identity through fingerprints.