Reducing ATM withdrawals from 11pm to 5am: Banks also complain about difficulties
The request to reduce the withdrawal limit from 11pm to 5am is also causing headaches for banks because of the expected increase in costs due to the adjustment of ATM system management and time. However, the biggest headache for banks is how much should the withdrawal limit be reduced to retain customers?
It is expected that banks will reduce the ATM withdrawal limit from 11pm to 5am to minimize risks for customers and banks according to regulations in Document No. 6296/NHNN-CNTT sent to credit institutions and foreign bank branches on risk prevention in card payment activities.
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Reduce customer loss
According to a representative of a state-owned commercial bank with the second largest number of ATM cards in the banking system, the State Bank of Vietnam's request for commercial banks to reduce withdrawal limits between 11pm and 5am is to reduce losses caused by card skimming (a method of stealing transaction card account information) caused by cybercriminals.
“Currently, customers are allowed to withdraw 3 times/day and a maximum of 3 million VND/time. Suppose, with the request from the State Bank, from 11pm to 5am, commercial banks reduce the limit to only 1 million/time. Thus, if criminals “steal” money from ATM accounts, they will only be able to take 3 million VND from 3 withdrawals of customers instead of the maximum of 9 million VND according to current regulations. Customers' losses have been reduced by 2/3”, the leader of this bank analyzed.
This leader also admitted that this solution also affects card users, however, the impact is not much, because according to statistics from card transaction activities of customers in the banking system, the number of transactions via ATM cards is popular between 7am and 10pm (according to statistics from the bank's transaction monitoring department).
“The time from 11pm to 5am is people’s rest time, the number of transactions during this time is not large and is usually just customers’ sudden need for money. Therefore, it will not greatly affect the lives of customers using the bank’s ATM services,” said the bank leader.
The leader of a joint stock commercial bank headquartered in Ho Chi Minh City also assessed that the State Bank's regulation to reduce ATM withdrawal limits is appropriate given the complicated developments of the current "theft" of money from ATM accounts.
Currently, money loss cases often occur between 11pm and 5am because this is the time when people go to bed. Even though they use mobile banking, very few customers can track changes in their ATM accounts when they receive a text message notifying them of a transaction. Banks are still responsible for the loss of customers' money and must be responsible for investing in human resources and technology to ensure the safety of customers' accounts. However, even though banks continuously upgrade their technology, the risk of loss can still arise.
“Technology is always changing, when banks upgrade according to the changes in technology, it only takes a short time for hackers to break security. Therefore, limiting transactions during the “golden” hours to lose money will of course reduce the risks,” he explained.
Banks say it's difficult.
Although the transaction limit is required to be reduced during this “golden period”, the adjustment level is still being regulated by the State Bank of Vietnam in an “open” manner. This means that each bank will make appropriate adjustments based on its calculations and risk appetite. However, up to now, no bank has been able to give a figure for the limit adjustment, because the quantification of the figure is still being carried out by the banks.
Every policy always has two sides, once the risk is minimized, banks will have to make certain trade-offs. With the modern technology platform as it is today, banks all believe that reducing the withdrawal limit between 11pm and 5am will not cause any difficulties. However, to realize this policy, commercial banks must spend more resources, time and costs to convert the card account management system.
Dr. Nguyen Tri Hieu, a financial expert, analyzed that when commercial banks change their withdrawal limits over time, this means that banks will have to change many related processes such as operating procedures, management, rearranging information technology systems as well as treasury and fund plans. This will increase the costs incurred by commercial banks significantly and it is very likely that customers will have to bear these costs through transaction fees...
“In the first half of the year alone, state-owned commercial banks and some joint-stock commercial banks have twice demanded an increase in ATM withdrawal fees, citing the need to cover investment costs for ATM systems, POS systems, or technology platforms serving the payment systems of commercial banks. However, commercial banks have been unable to increase fees both times due to the SBV’s warning. If such costs arise again now, the possibility of “fee increases” may continue to occur,” Mr. Hieu worried.
From an expert perspective, Dr. Nguyen Tri Hieu suggested that commercial banks should reduce the withdrawal limit by half between 11pm and 4am, instead of extending it to 5am as it is now.
According to Dr. Bui Quang Tin, commercial banks would be “unwise” if they increased transaction fees for customers in this case. “Investing and upgrading technology is of course the bank’s business. Banks cannot collect more money from customers to compensate for losses in investment. If banks demand an increase in fees, they will never get “consensus” from service users. At that time, the loss will belong to these banks.”
