GLOBAL ATM MARKET
The rising demand in the banking sector for automation in many developing and developed countries is driving the growth of the ATM industry.
Over the last decade, the global banking industry has undergone many technical developments. Instead of having to hit the bank, an ATM helps clients to quickly withdraw cash at their convenience.
It also allows consumers to execute a variety of other activities, such as allowing bill payments and exchanges of interbank and intrabank assets. It also provides other banking services, including balance inquiry, PIN update, cheque book applications, among others. Several such features also expanded the use of ATMs by customers.
In 2018, ATM Industry Association launched the next gen API app model for ATMs. According to ATM Industry Association, more than 325 global ATM companies currently participated in this development. This new model will enable customers to transact at ATMs for cash and value-added services via their mobile devices. North America is expected to dominate the next-gen ATM market.
COVID 19 AND MOBILE ATM
The epidemic of COVID-19 and the imposition of social distancing steps restricted people’s travel. The main challenges faced by ATM market are decline in cash flow and credit, reduced face to face interaction and thus difficulty in ATM service operations.
The rising market demand for cash has also prompted many banks to open mobile ATMs to satisfy consumers’ banking needs. Revenues from the mobile ATM sector are expected to rise dramatically over a few months of the coronavirus pandemic as they remove the need for customers to travel out of their locality to withdraw their currency.
Following the devastating impacts of the COVID-19 pandemic, and taking into account the results of the member survey in April 2020, including the list of pain points experienced by members during the crisis, ATMIA took actions by launching new plans, e.g., global ATM and Cash Revival Plan.
On top of asking ATMIA for guidance in setting new standards for sanitizing ATMs in a post-pandemic world, the respondents outlined their preferences for new ATM functionalities in future, including NFC-enabled ATMs, pre-staged App-based transactions, Global Money Transfers, recycling ATMs, bitcoin and crypto-currency services at ATMs, contactless ATM transactions, charity donations, transport ticketing, bill payments, video ads and video telling, card dispensing, transport tickets, biometric authentication and AI.
The respondents outlined their preferences to ATMIA, for post covid world. They expect features like NFC abled ATM, recycling ATMs, AI and biometric authentication. They also expect few services like bitcoin and cryptocurrency services, video telling, card dispensing etc.
Customers in the post-pandemic world are likely to embrace these fast, contactless ATM transactions.
Almost half of the world’s major markets saw an increase in the use of ATMs over 2019, despite the global push towards cashless payments which has intensified due to the coronavirus outbreak in recent months.
The biggest rise was seen in India, which experienced its fastest growth since 2016, adding more than 7,000 machines. India’s Independent ATM deployers (IADs) installed three times the number of ATMs over 2019 compared to banks, suggesting the growth is in part down to financial inclusion efforts by non-bank institutions attempting to tap consumers in rural areas.
It can be expected that cash would remain important to vast portions of the world’s population, either because they lack the resources to compensate by other means, or simply because they still have a deep personal desire for cash.
With banks less willing than before to maintain large branch networks, ATMs will be key to delivering cash to these customers. With banks less likely than before to retain large branch networks, ATMs would be the secret to supplying cash to these clients.
FUTURE OF ATM MARKET
About half of U.S. banking customers either never used their banks’ mobile apps or used them infrequently. ATMs are now a vital instrument that banks use to cross the digital and physical financial environments for their clients, however, as with all goods and services, they cannot remain static.
When technology advances, consumers will demand technology innovations to be incorporated into the experience they have of any companies with which they communicate, and ATMs are definitely no different.
The technology transition already underway in the financial services sector has now been accelerated. Now that banks are re-opening physical branches or planning to close those branches, their next task is to combine digital with in-person banking to completely improve customer experience.
From upgraded ATMs to smartphone applications and virtual bank tellers, banks are embracing innovative tools and technology to accelerate creativity as they welcome customers back to the newly-enhanced physical branches.
For the foreseeable future, cash will continue to have a strong presence in the marketplace. Its ease of use and ubiquity continue to make it a preferred payment method for small transactions across all demographics.”
Federal Reserve in their 2019 report said that over 20% of US population are unbanked and continue to rely on cash as a primary form of payment for transactions of all sizes. So, there must be more percentage of unbanked population in developing and under developed countries. Thus, cash is not fully disappearing.
PRODUCT DEVELOPMENT AND COMPETITIVE LANDSCAPE
The market leaders are involved in a tough battle to gain a larger slice of market share, with intensive research and development, as well as focus on multi-function devices becoming the norm. Some of the recent developments to have taken place are:
- In September 2019, the National Bank of Bahrain (NBB) announced that it was deploying SelfServ 80 ATMs from the NCR Corporation. The latter would also be providing the NBB with the NCR Direct Connection (NDC) Enterprise software to assist NBB in delivering a consistent consumer experience across physical and digital channels.
- In June 2019, Diebold Nixdorf introduced a series of self-service solutions, called the DN Series™, with major brands in banking such as Fifth Third Bank and BNL Gruppo BNP Paribas among the 18 financial institutions piloting the DN Series in 13 countries. Through this, the customers are expected to have a personalized, modern experience.
- NCR Corporation, a banking software and services leader, on October 2020, announced the release of NCR’s next-generation ATM software platform, NCR Activate Enterprise NextGen. The Activate Enterprise NextGen ATM platform makes it easier and faster to offer new digital services through the ATM by integrating physical and digital for a consistent customer experience. The software platform is hardware independent and enables banks to deploy new customer experiences such as video teller collaboration and contactless technology in a simple manner.
- Huntington has announced it’s upgrading the software of its entire ATM network and replacing 400 machines by year-end of 2020. The upgraded ATMs will run on state-of-the-art Hyosung MoniPlus2S software and will provide customers with greater security, speed and flexibility. It will also allow customers to choose bills in denominations of $1, $5, $20 or $50.
- Euronet Worldwide, a leading global financial technology solutions and payments provider, announced the completion of the acquisition of Dolphin Debit, a U.S.-based full-service ATM outsourcing company on April 2020. ATM outsourcing in the United States historically has been limited to cash dispense and deposit transactions without any advanced processing services available. Euronet can now offer more to these customers with their technical abilities to process any transaction – digital or cash – worldwide. These are the services banks in the U.S. are increasingly being asked for by mobile-savvy customers and they believe they will be in an excellent position to elevate the technical profile and product portfolio of any bank through their outsourcing services with Dolphin.
- In February 2019, CaixaBank, a Spanish financial service company, deployed technologies by FacePhi and Fujitsu to introduce facial recognition Automated Teller Machines, with 4 branches in Barcelona doing the honors of unveiling the technology. Customers using the ATM would be able to choose between PIN identification and facial recognition.
In the coming years, increasing digitization in developing countries may adversely affect market revenue from the automated teller machine (ATM) market.
The payment industry is seeing the evolution of digital payment options, such as online & mobile banking and digital wallets & Bitcoin transactions and evolution of Neo banks. As they offer easy, fast, and safe transactions, consumers are increasingly choosing online banking platforms.
But with mobile ATM adoption can also make them stand up in this competitive landscape. The companies should adopt a more customer centric approach.
Creating an experience that provides consumers with the choices they desire, in a safe and stable environment that is easy to enforce – that is what businesses will need to do to gain customer loyalty.