ATM Closings Explained

[In response to a piece of commentary in the April 11 J@pan Inc Newsletter]

Gentlemen:

While it is true that the ATM is a machine and certainly could be run 24 hours a day, you are failing to consider the back office system needed to make the ATM network operate.

For a very rough explanation (a banking expert would probably cringe): The back office systems used to support the ATM and branch offices are the same systems used for settlements. They cannot run both at the same time, thus the ATMs and branches must close to allow the settlements to run. The same used to be true in the US -- if you can remember that far back. With the introduction of Saturday banking and ATMs open 24 hours in the US to meet customer demand some thirty years ago, banks in the US had to invest in the extra computing resources and redo business processes to support simultaneous transactions and settlements. This isn't easy to do, and it is difficult for Japanese banks to justify the investment when even in the best of times they have some of the worst returns on capital on the planet.

Eric Hildum
Eric_Hildum@itochu.net