BSN introduces Virtual Teller Machine service in Malaysia
By Lum Ka Kay December 16, 2015
- Allows customers to perform transactions via live virtual banking
- Balances workload between high and low traffic branches
BANK Simpanan Nasional (BSN) has introduced its Virtual Teller Machine (VTM) service that allows its tellers across Malaysia to serve customers via live virtual banking, saying that it was the first bank in Malaysia to roll out such a service.
Its chairman Abu Bakar Abdullah said the VTM service balances the workloads between branches, enabling customers in busy branches to perform transactions, assisted by tellers in low-traffic branches.
“Customers can now enjoy counter transactions without geographical limitations, and experience more comfortable and personalised professional financial services,” he said at the official launch of the VTM service in Kuala Lumpur on Dec 15.
He added that the system involves 450 BSN tellers being used as virtual teller agents across Malaysia.
BSN is a government-owned bank incorporated in 1974 to take over the duties and responsibilities of the Post Office Savings Bank. It claims over 9.1 million customers across Malaysia, with retail deposits amounting to RM13.8 billion as of October 2015. [RM1 = US$0.23 at current rates]
The VTM project is a collaboration between BSN, Cisco Malaysia, SSDM Sdn Bhd, Telekom Malaysia Bhd (TM) and VastComp Group, said Abu Bakar.
“This was a strategic collaboration between BSN and VastComp to custom-make the system, including designing and building the machines, combined with Cisco’s video-conferencing telepresence system.
“It also involves partnering with TM as the distribution network service provider,” he said.
TM recently signed a five-year service agreement with BSN for the new Converged Network Transformation Project, where the former will deliver wide area network (WAN) services connecting 401 BSN branches nationwide.
To carry out transactions such as balance inquiries, deposits, withdrawals, bills payments as well as fund transfers, users would need to insert their MyKad (Malaysia’s national chip-based identity card) into the VTM and have their thumbprint verified for security purposes, said Abu Bakar.
In a statement, BSN said it invested a total of RM30 million to roll out the VTMs that provide more than 80% of its counter services, and is an improvement over current automated teller machines (ATMs) and cash deposit machines (CDMs).
However, its deputy chief executive Frederick Siew said that this investment amount was only the hardware cost.
“The RM30 million stated was only for the hardware cost, it doesn’t include a lot of other costs,” he said earlier on the sidelines of the official launch, but did not elaborate on these other costs.
Siew said BSN introduced the VTM service because the bank is looking to properly utilise its resources.
“By diverting traffic to the less busy branches, we can save costs because we don’t have to keep on hiring new talents to attend customers at high-traffic branches,” he said.
Currently, the VTMs operate the same hours as BSN branches, but in the future they would be placed in public areas such as shopping complexes and railways stations where they will run from 9am till the station or shopping complex closes, according to Siew.
Despite the similarities between a VTM and an ATM, he claimed that VTMs are more secure because “we are going to have an enclosed area where we will lock the machine up after its operation hours.”
Currently, 93 VTMs are stationed in 31 branches. Siew said BSN aims to deploy approximately 30 more VTMs to its branches in 2016.
“We are currently still in phase one, so I think it’s important for us to study how people use the VTMs first ... . We cannot deploy just for the sake of it, it’s important to [properly] utilise these VTMs,” he said.
When asked if BSN would be partnering with financial services technology (fintech) startups in the near future, Siew said BSN is looking to “take one step at a time.”
“We cannot just jump in and say we want to do it, because it’s a very heavy investment … going into fintech.
“So we have to look at it carefully [based] on its cost-efficiency and return on investment (ROI). In order to be profitable, we will look into suitability of these services for our customer base,” he added.
Tough year ahead
Meanwhile, Siew said 2016 would be a very challenging year for the banking industry.
“It’s going to be very challenging where we are also fighting over a smaller pie. Cost-cutting is an important measure because business isn’t growing as fast as we expected.
“All the banks are fighting for a limited pool of deposits, so we will have to reduce our cost to remain competitive,” he said.
Additionally, BSN projected a lower rate for its loan growth for 2016. Siew said at this juncture, BSN’s projected loan growth for 2016 is 8% compared with last year’s rate which was in the double-digits.
“But 8% is still healthy. We have to be more careful in growing quality loan assets. To grow is easy, but to collect isn’t.
“Thus, we will focus more on growing quality loan assets for the upcoming year,” he said.
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BSN Virtual Teller Machine VTM Digital Banking Fintech Abu Bakar Abdullah Cisco Telekom Malaysia VastComp Frederick Siew ATMs
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