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For Europe's ATM deployers, innovation trumps expansion

The European installed ATM base shrank considerably in 2013, but saw a significant rise in the number of units boasting cash-recycling functionality.

October 17, 2014

A new report from RBR, "ATMs in Europe 2014: Hardware, Software and Services," reveals that banks are increasingly focusing on improving their existing ATM operations rather than on deploying more terminals.

The report shows that, with the exception of the Russian and Turkish markets, which saw significant growth, the European installed base shrank by more than 15,000 machines in 2013. Despite this, the market saw a significant increase in the number of automated deposit ATMs featuring cash recycling technology and in deployers using cash forecasting solutions.

The cost-benefit analysis

Higher purchase costs typically have made many banks reluctant to deploy ATMs with cash recycling technology. Some banks have focused on placing them in locations with a roughly even number of deposits and withdrawals.

The report shows, however, that banks now view the potential savings in cash management as compensation for the increased purchase costs. In Europe as a whole, the number of ATMs featuring cash recycling technology increased by 18 percent in 2013.

Areas of growth

There were 28,000 cash recycling ATMs in Europe at the end of 2013, of which nearly half were installed in Germany. These machines are much more common in western Europe, where cash recycling is a feature on 7 percent of terminals, compared to less than 1 percent in central and eastern Europe. Russia accounts for almost half of all cash recyclers in CEE, but this represents only a tiny fraction of the Russian installed base.

As Spain was one of the countries hardest hit by the eurozone crisis, deployers there have had more reason than most to focus on profitability over growth. This market saw the greatest reduction in ATM numbers of all European markets surveyed, with the removal of more than 4,000 machines. However, Spanish deployers installed almost 4,000 automated deposit ATMs in 2013, making Spain the largest western European market for these machines outside of Turkey.

Controling the cost of cash

Deployers in Europe also are using cash forecasting and management software to increase efficiency and reduce costs for cash handling and CIT. Such software is now used on 370,000 ATMs in Europe, an increase of 28 percent since the end of 2011.

RBR said that expected future developments in cost-savings will include increased recycling at the branch level to reduce CIT and cash handling costs and the use of more sophisticated cash management software.