Enhanced services and technological advancements aimed at increasing consumer convenience to drive the global ATM market

Posted On Mar, 15, 2016

Automated teller machine (ATM) market is poised to grow on account of technological advancements in wireless communicating device integration. Rising integration of wireless communication services with ATM in order to reduce transaction frauds is a major factor driving demand over the forecast period. Furthermore, advancements in ATM’s such as solar ATM’s, smart ATMs is expected to fuel industry growth.

Over past few years, the definition of ATM has changed from a mere cash withdrawing machine to an automated machine with multiple functionalities. Growing number of services at ATM kiosks increases consumer convenience, thus is expected to have a positive impact on market growth. In addition, leading banks are integrating their services with technology companies in order to deliver a seamless consumer experience.

Geographical mapping coupled with GPS has increased the ease of identifying potential areas for kiosk installation, which in turn is likely to augment demand. Competitive rivalry among private sector banks to increase market penetration leads to expanding existing number of kiosks which in turn is likely to augment growth. Moreover, with the entry of many other non-banking companies in ATM industry, the industry is bound to grow over the forecast period. In addition, growing consumer awareness regarding various services through ATM kiosks coupled with constant technology up-gradation by companies is expected fuel market growth.

ATM's with automated deposit feature would help countries to reduce the handling cost of cash fuelling the overall growth of ATM industry. Government policies of financial inclusions and ensuring bank account for entire population would further add to growth of ATM industry. However, the online fraud, network issues in developing nations is expected to hamper market growth. Furthermore, growing popularity of online transaction is expected to negatively impact growth over the next seven years.

The ATM industry is segment on the basis of application including on-site and off-site installations. ATM’s deployed within the premises of a bank are termed as on site ATM’s, whereas the machines deployed outside the premises are termed as off-site ATM’s. On site ATM’s are further segmented into work site ATM’s meant solely for the use by bank officials. The market is segmented on the basis of end-use as yellow label ATM for e-commerce transactions, pink label ATM aimed at for women bankers, green label ATM for agricultural transactions, and white label ATM include services provided by nonbanking financial institutions.

ATM industry growth would be led by Asia Pacific due to the presence of emerging economies including India and China. Rising prosperity among the lower middle class consumers coupled with changing consumer lifestyle in Asia Pacific is expected to drive market demand. Increasing efforts by various government institutions in order to upgrade existing technology infrastructure is expected to have a positive impact on market growth This can be witnessed from the rise in number of debit cards issued to people in countries such as Bangladesh, India, and Sri Lanka. These factors coupled with changing consumer lifestyle in the region are expected to drive growth over the forecast period.

Middle East and Africa are also poised to witness substantial growth due to presence of countries such as Iran which is a cash based economy along with the high customer demand and government support to promote electronic banking system. Moreover, the adoption of Cash Less policy by governments such as Nigeria and other East African countries in the region, increase the frequency of use of ATM’s, fuelling the growth of ATM industry.

Sluggish recovery of European economy is expected to hamper market growth. The slowdown has led to mergers of many banks leading to consolidation of branch locations and ATM fleet. The EURO ZONE crisis has also led to constraints in budget of ATM machines manufacturers, which has led to sluggish market growth. However, in countries such as Russia where the state owned banks are poised to drive growth and provide financial service to majority of citizens, ATM growth would be high. Moreover, due to high handling cost of cash, developed markets such as Europe and North America are expected to curtail costs, thus affecting overall demand.

Developed regions such as North America and Europe who have a lot of alternative payment options, ATM still remains a popular mode of payment owing to ease and convenience of paying for low value transaction. All banking companies whether small or big have ATM facilities. Banks Such as HSBC, Deutsche Bank, HDFC Bank, SBI, Axis Bank, Citi Bank, Commonwealth Bank, Bank of America, and other non-banking financial institutions such as Indicash which provide white label ATMs are new entrants. These banking and non-banking financial institutions are expected to offer more services such as paying utilities bill such as mobile bill, electricity bills and travel tickets. Technological advancements have also enabled these ATM service providers to provide continuous improvements in security for financial transactions. These service providers also provide facilities such as cash deposit and also have a features such as preferred language.

Source : ATM Market Analysis By Solution (Managed Services, Deployment) And Segment Forecasts To 2022

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