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Posted on Dec 04, 2006 - 4:00am by John P. in Finance, News
Ok. This just pisses me off. Can someone explain to me why Citibank is going to spend the money to develop and implement fingerprint reading ATMs for the poorest people in India, but not for the richest people in the US?
I mean, I wouldn’t have to lug along another ATM card if they’d just put a fingerprint scanner on their ATMs. Instead I could just swipe a finger, enter my PIN and be gone. Just think – if someone stole my wallet I wouldn’t have to worry about not having any cash as long as I could get to an ATM.
Citigroup is rolling out a network of biometric automatic cash machines aimed at illiterate Indian slum dwellers, using the latest technology to woo the country’s millions of “unbanked” poor.
The machines will recognise account holders’ thumbprints, eliminating the need for a personal identification number, and will have colour-coded screen instructions and voiceovers to help guide them through transactions.
But here is the real story…
Though India’s population exceeds 1bn, Citigroup estimates that there are only about 300m bank accounts in the country. However, loan repayment rates among the poorest borrowers in micro-finance schemes are about 98 per cent – among the highest in the banking sector.
Citibank certainly figures that if they can go into the micro-lending business with these folks and still charge decent interest rates (maybe 10-20%?) they will make a killing! Think about it. With virtually all of these people paying back what they owe Citibank would get them all hooked on credit and then have a fat profit stream for the long haul.
Don’t get me wrong, the other side of this coin is that micro-lending and banking services for the poor could spur a lot of economic development in that segment, which is certainly a good thing. But corporations aren’t in business to be philanthropic – and they have certainly stated that isn’t their goal here…
Mr Jayakumar said Citigroup’s scheme aimed to make a profit but he gave no timeframe. “It’s not a philanthropic exercise,” he said. “For it to be sustainable, we should break even and make a little bit of money.”
Read the full article on MSNBC.
We should not criticize such moves as wasting money. Citibank would have thought of this biometric ATMs to the poor because they may have accessing the traditional banking channels.. What is the use of the technology when it can not be put to use to common people? Kudos to people at Citibank India, Ways to go in bringing banking to common people, but a appreciable start!
Now, I never said this was a waste of money… in fact, I do see the positives and I think this is GREAT for the people in India.
What upsets me is that neither Citi nor any other bank in the US has outfitted their ATMs with biometric readers. Clearly they think that status quo – 20 year old ATM card technology – is good enough.
Ironically, at my Bank of America where I have a safe deposit box they use biometric fingerprint technology to allow you entrance into the vault. If they can do it there, why not on the ATM? They’ve already got my fingerprints…
They are going to make money on it, they wouldn’t do it, if they weren’t. And they are doing that here in Corpus Christi, Texas at one of the banks, so I am sure Texas isn’t the first state.
Patty,
Are you saying that in Corpus Chrisi they are putting fingerprint reading ATMs in?
John
Quick Question John,
I’m doing a research paper for my marketing class on microlending in India. I am focusing on a hypothetical situation involving Citigroup opening up mircolending options in India. Have they actually started to offer these microlending options? Or Is it something to for in the near future? Thanks.
Z
Z – I’m not sure this qualifies as microlending since an ATM just gives you money you have. Nonetheless, they have already installed at least a few of these devices. Check the link to MSNBC above. It was previously broken, but I found the article and fixed it.
John
The Man,
I was surfing for something else but I came accross this. This is a huge pet peeve of mine so Im going to comment even if its old. ll answer the question you had – its because Americans are afraid to share their personal data. Not a little afraid – its almost in the psyche. For specialised services like a box its ok – but a generic ATM? See you in court – even if its optional the other people will be upset at the entire concept and even talk about the cutting off the finger scenario.
I’ve lived around the world and I always am amazed how bio-id’s and other technology are simplifying things. The basic reason is US consumers dont want to give up personal data.
When Im in England there are barely any police on the roads because they have over 100 million CCTV cameras. You speed and the tickets in the mail. Everyone is cool with it – here there is no city with a high camera penetration rate.
When I fly into three EU countries I never have to sign a frorm, talk to a immigration officer or take out my passport. Im out in two minutes. A machine takes a retina eye scan and know 100% who I am as I’ve had to go through a rigourous pre screening. When I came back to JFK, my own country, I have to wait 20-30 minutes.
Toll booths in France all take credit cards
In fact no major European countries require signatures anymore for Visa, MC and AMEX as they use the chip and pin system. This has cut down fraud ten-fold.
When I was in South Africa students used fingerprints technology on campus.
When I was in Japan, you could pay for a coke at a machine with your cell phone.
Oh and yes, I was in India and yes there were some machines with fingerprint technology. In fact during my year in India – everything I needed was online – I never had to go to a government office or stand in line.
It always upsets me because, I know 99% of this stuff is made in America – but we are the country that is always afraid of big brother and personal data sharing. The result is no innovation for cutting edge consumer services – take it from me – everything in the US takes longer except getting your food at a resteraunt.