COMPETING to provide convenience to customers, banks are installing more colourful, user-friendly and self-service machines. Hongkong Bank and Hang Seng Bank customers will shortly meet another new piece of banking technology - the instant deposit machine. Cash deposits through branch counters is time-consuming and deposits via automatic teller machines (ATM) take a day or two before the amount can be credited to the account. Also, problems can occur if there is a discrepancy between the amount written on the deposit envelope and the bank's computer record. Instant deposit machines, the first of their kind in Hongkong, provide a cash deposit service with the amount instantly verified and credited to the account. Their introduction signals another development of electronic self-service banking in Hongkong. The machines will be installed at 11 Hongkong Bank branches early this month and at eight Hang Seng Bank branches in August. ''The machines are not used to reduce staff costs, but to help the tellers who will have more time to perform other less routine duties. In fact, ever since we introduced electronic banking, staff numbers have shown no decrease,'' said Hongkong Bank retail banking manager Veronica Bourke. To a depositor, the machine has certain advantages over an ATM. Instant verification means that interest can be gained, cash transfers can be made and cheques can be covered immediately. ATMs will continue to be used for cheque deposits.