Outsourcing of ATMs - A Comparative Study between Public and Private Sector Banks in Kerala

Abstract

Outsourcing is the execution of part or entire business function by a third party. The impact of outsourcing can be seen in almost every sector whether it is manufacturing, financial, Information Technology (IT) or some other service sectors. Among these, financial services Sector is the most important one. Nowadays, outsourcing is a common phenomenon adopted by almost all banks. Outsourcing can be seen in every department of banks. The present paper attempts to analyse the reasons behind ATM outsourcing and to assess the level of satisfaction of branch managers on services provided by outsourcing agencies. For this purpose, data were collected from ATM coordinators and branch managers of one public sector bank viz.,Canara bank and one bank from private sector namely HDFC bank with the help of a structured questionnaire. A five point Likert scale ranging from highly satisfied to highly dissatisfied was employed to assess the satisfaction on outsourcing agencies’ services. It is found that banks prefer to outsource ATM related activities with the hope of reducing day to day burden, cutting down expenses, getting better access to technologies and to concentrate more on core activities. Further it was also found that among all ATM activities being outsourced branch managers are more satisfied of ATM software services.