Emerging Trends In ATM Industry And Its Complete Market Analysis

Limited working hours and a large number of customers trying to get their regular banking tasks done within that time, created several problems for the banking sector. To address this problem, the development of ATMs took place, offering customers the flexibility to carry out various banking activities outside of the limited banking hours. With the various benefits on offer, ATMs have quickly become the preferred mode of banking for customers. As per the latest ATM industry statistics, the ATM market will continue to expand driving the growth of the cash-in-transit industry which is growing at a rate of approximately 4.4 percent till the year 2020.

With a high density of population, developing countries in the Asia Pacific require a better density of ATMs to cater to the requirements of the banking customers. This bodes well for the ATM market, which is expected to register exponential growth in the region, compared to developed regions of the US and Europe. In the developing markets, customers will be driven to complete multiple tasks without visiting the bank and that too round the clock.

Importance of ATMs

ATM or Automated Teller Machine is a portable electronic banking system that allows customers to complete regular banking tasks without any need to visit physical banks. Customers can use their debit cards, credit cards or personal details to access their account through an ATM. As ATMs are accessible round the clock, they have become very popular amongst the customers for it offers them complete flexibility regarding their account operations. Some of the tasks that can be completed with an ATM are cash deposits, cash withdrawals, money transfer, change of PIN and much more.

As bank branch personnel are burdened with several tasks, ATMs have come as a welcome relief. Most users can complete regular tasks with ATMs, reducing the pressure on the bank staff, thereby increasing their efficiency. ATMs also have played an important role in democratizing the banking sector, where each customer is given equal importance irrespective of his/her status in the society. With round the clock functionality, ATMs have relieved banking customers of waiting in long lines. Now, customers can complete their banking tasks as per their convenience and from any network ATM.

Emerging Trends in the ATM Industry

The rapid progress of technology has an important role to play in the progress of the ATM market. As the latest technological innovations are enhancing the functionalities of ATMs, some interesting trends are being witnessed in the ATM industry.

  • Between the years 2015-18 in the Asia Pacific region, India and China witnessed rapid growth in the number of ATMs. Both these countries have witnessed rapid expansion in the percentage of the population having access to banking services. In comparison, developed countries in regions like Japan, Australia, and South Korea already have well-developed ATM networks.
  • Since almost 80 percent of the global consumer transactions take place through cash, ATMs have excellent growth potential. POS (Point-of-Sale) machines have become popular, but their usage is far behind that of ATMs. Due to habit or reluctance, customers prefer withdrawing cash from ATMs for purchase rather than using POS machines.
  • As many ATMs are located away from banks or in isolated locations, there are chances of criminal elements on work around there. As a result, there is a growing trend where most banks have outsourced the cash replenishment duty to specialized agencies in the cash-in-transit (CIT) industry. These agencies have an established, secure process, which reduces the chances of criminal incidents. Stringent guidelines from banks regarding the transfer of cash from one place to an ATM have created tremendous growth opportunities for the cash-in-transit market.
  • To make ATMs safe from acts of crime, specialized agencies are now also equipping the ATMs with improved security features. This requires old ATMs being replaced with latest ATMs with better security features. This trend is contributing to significant growth in the ATM market as all banking institutions are striving for a secure transaction environment in their ATMs.

Despite the excellent growth being witnessed, the ATM market is facing some stiff challenges also. With the rising popularity of cashless transactions, the number of ATM users is expected to fall steadily. The cashless payment market is expected to growth at a steady pace across developed regions of Europe and the U.S. Even in developing regions, more customers are opening to the idea of using POS machines for payments. This would result in fewer customers using ATM services in the coming years.

Although the rising popularity of cashless transactions is posing some challenges for the ATM industry, the culture of using cash for consumer transactions is very deep-rooted in the psyche of the customers. Moreover, with banks in developing regions like Asia Pacific, Africa and the Middle East trying to make banking services more accessible to customers, the ATM industry is expected to witness steady growth for many years to come.

Peter