The Chilean ATM market's robust growth is expected to continue, despite its already accelerated growth over the last six years. According to England-based Retail Banking Research Ltd., between 2002 and 2007, the national ATM estate in Chile grew 72 percent, far exceeding the 46 percent ATM increase the Latin American region experienced generally.
"During the last several years the biggest banks have made large-scale investments in expanding their number of ATMs to reduce costs, improve efficiency and increase customer loyalty," said Francisco Castañeda, finance professor at Universidad de Santiago.
At the end of 2007, Chile had 6,306 ATMs, and RBR estimates that the country will have around 8,500 ATMs by the end of 2013, because of a growing base of banked consumers, an increased number of bank branches and increasing competition among ATM deployers. The country's number of banked consumers also is growing, according to Chile's banking association ABIF. From 2003 to 2007, Chile's number of checking accounts grew from 1.58 million accounts to 2.02 million.
Diebold's comeback
After a decade of market retraction, Diebold Inc. is re-entering Chile with force. At the end of 2007, Diebold Inc. held only 3 percent of the country's installed ATM base.
The world's third-largest ATM maker had relied on distributors to maintain its presence in Chile. Over time, the company lost market share. So in 2006, after purchasing Chilean security firm Bitelco, Diebold acquired a direct presence in Chile. In 2007, Diebold signed Servipag, a national chain of bill-payment centers, to supply Diebold banking-correspondent terminals. And this year Diebold says it will roll out its full self-service range of cash-dispensers, automated-deposit-taking ATMs, and bill payment terminals.
Story continues below...
Engage Customers with Strategic ATM Marketing
So, you’ve taken the plunge and launched one or more targeted offers at the ATM. But, are you getting those 20% take-up rates you were hoping for? Phoenix customers are. Find out five ways to drive more revenue with ATM marketing.
Diebold has its work cut out of it, competing with the likes of NCR Corp. and Wincor Nixdorf AG. According to RBR, at the end of 2007, NCR held 66 percent of the installed base while Wincor held 27. Brazil's own Perto S.A. is another competitor to watch. At the end '07, it held 4 percent of the market.
But Robert Reton, vice president and general manager of Diebold's Latin America South region, says Chile's strong economy, growing banking sector and multinational network of banks are positives for the Chilean ATM market. In fact, Diebold sees Chile as a key market. Diebold is looking to build ATM and security deals with existing Bitelco customers, as well as direct relationships with the multinational banks it works with in other Latin America countries.
Security: A growing concern
The country's rapid ATM growth has not come without its own special challenges. Though often referred to as one of the safest banking countries in Latin America, Chile over the last year has seen a surge in violent ATM crimes. The country suffered more than 160 physical attacks on ATMs, with several gangs now specializing in ram-raid ATM attacks.
"If steps are not taken, this will continue or grow worse, and turn into an excessively high cost," Reton said.
A continuing wave of crimes could also damage the public's view of the ATM as a safe way to access cash, he says.
So companies like Diebold and IBM Corp. have introduced solutions such as ink-staining that they hope will curb the attacks. Chile's central bank is offering support, by its willingness to replace banknotes that are destroyed by the ink after attacks.
And to combat other ATM crimes, such as card cloning, BCI is equipping its ATMs with MagnePrint technology, and it's the first bank in the country to make the move, says BCI innovations manager Pablo Cousiño.
The Chilean ATM market also has seen the biggest banks focusing more on advanced functionality. In 2006, state bank BancoEstado became a pioneer when it introduced ATMs that accept envelope-free deposits, says E-banking manager Hernán Saavedra. And at the country's third-largest private bank, BCI, the ATM channel is of "maximum importance," being used by the bank as a strategic channel that can be leveraged to differentiate BCI from its competitors, Cousiño says. The bank's Perto-built cash-checking machines are taking ATM functionality to the next level.
Last year saw the country's biggest bank, Santander Santiago, launched Supergiro, a service that allows users to transmit funds via a home computer to a recipient who picks up the funds at an ATM using an ID number and a code that is emailed by the sender.
Ulric Rindebro is the banking editor of Chile-based Business News Americas. Rindebro periodically writes about Latin America for ATM Marketplace. To submit a comment about this article, e-mail the editor.
