/ 9 July 2008

Banks not yet deterred by costly ATM blasts

South African banks have not been discouraged by the ongoing spate of bombings of ATMs, especially in Gauteng, and will continue to provide financial services in remote areas.

However, the banking industry is seriously concerned about the bombings and is talking to the police and government to come up with a solution. Already in place is a 24-hour hotline — 0800 212191 — to report any suspicious activity, including dealing in illegal explosives.

It costs “hundreds of thousands of rands” to replace an ATM, says Erik Larsen, head of press relations at Standard Bank.

On Wednesday morning at about 1.20am, one of the bank’s cash machines in Turffontein was bombed by 10 armed men. The bombing took place just after a First National Bank ATM in the south of Lenasia was blown up. On Tuesday, five Absa cash machines were bombed — four in Kempton Park and one in Elspark (East Rand).

The ATMs are blown up by placing commercial explosives inside or close to the machines.

Since 2004, criminals have targeted 700 ATMs in South Africa, only succeeding in stealing cash in a limited number of attacks. This year, 294 ATMs have been bombed, of which 177 bombings took place in Gauteng.

According to the South African Banking Risk Information Centre (Sabric), which is funded by the four major South African banks and established to prevent organised banking-related crime, most of the bombings are perpetrated between the hours of 11pm and 5am, and the criminals are usually heavily armed. Generally, the bombings take place in remote areas.

The bombings are a serious concern for South African banks. However, Sabric recently said that “the banking industry won’t be discouraged by ATM bombings and will continue to provide financial services”.

Said Standard Bank’s Larsen: “It [these bombings] is very expensive, and for all banks it’s a very serious concern.” But, he continued: “We are committed to provide financial services to South Africans in disadvantaged areas. And we are still committed to that.”

Patrick Wadula, head of communications at Absa, which saw five of its cash machines blown up on Tuesday, agreed: “We have been asked by the government to provide financial services in more remote areas. Part of this service is to place ATM machines there.” According to Wadula, Absa will continue to provide this service.

However, both Absa and Standard Bank do not replace every cash machine that has been bombed. Wadula said: “It’s important to look at the places where it [the bombings] happened. How many times did it happen there? Is it likely to happen again? Is it a place that is very convenient?”

By rolling out ATMs the banks also take into consideration the general conditions of an ATM site such as proper lighting, proximity to other community services and the visibility of the ATM from the road.