At face value, RBR’s latest research on the global ATM market shows an industry in remarkably good health. The number of ATMs worldwide increased by 7.6 percent to 2.4 million last year, led by exceptional growth in China, India, Indonesia, Iran and Russia.
The global ATM market is not a homogeneous unit, however, so the headline figures and high growth countries mask what is happening elsewhere. At the other end of the spectrum, 12 of the 65 largest countries included in the research, mostly in Europe, actually witnessed a decrease in the number of ATMs.
Does this mean that the global ATM market is actually made up of two distinct sub-sectors — less developed countries with high growth, and developed countries in terminal decline?
The numbers suggest that this conclusion would be incorrect. While there are several countries where the number of ATMs have declined for consecutive years, such as Spain and Greece, others such as the Germany, Italy and the UK declined in 2010 and grew again in 2011.
What appears to be happening in Europe is that the underlying growth rate is slightly positive, but this is overlaid with rationalization in particular countries in particular years, which leads to individual market falls.
To further complicate matters, several CEE countries that might be expected to be on a long term growth cycle, such as Latvia, Lithuania and Serbia, also declined in 2011.
In these markets the explanation is slightly different. It appears that growth over the past 4–5 years has exceeded demand and that some banks got ahead of themselves. As in western Europe, but for different reasons, they are now rationalizing their ATM fleets.
So where does this leave us?
At the high-growth end of the market, expansion will continue, to be joined at some point by other developing regions — for example parts of Africa, which are not currently on most people’s radar.
In more developed markets we will see continued turbulence for the next few years, but aside from a few exceptions, most ATM markets will continue to expand.
Reprinted by permission from Banking Automation Bulletin.
Dominic Hirsch is managing director of Retail Banking Research, a London-based strategic research and consulting firm.