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Financial inclusion and demand for cash boosts Asian ATM base

Cash withdrawals continue to be an essential part of the banking landscape, as despite the emergence of alternative payment methods around the world, many countries and consumers still have a huge reliance on cash.

Indeed, new figures from RBR revealed the number of cash withdrawals globally at the ATM grew by ten percent in 2015 to almost 100 billion transactions a year, with the value of cash withdrawn totaling just under $14 trillion. Today’s ATM is much more than just a cash dispenser – it’s an also an opportunity for financial institutions to reach the unbanked and promote greater financial inclusion through self-service.

Asian nations to lead the way

The importance of financial inclusion and access to cash is particularly true in Asia, where governments in many countries are turning to technology to tackle the high proportion of unbanked citizens in the region. RBR said that places such as the Philippines and its neighbors represent “some of the most exciting ATM markets in the world“.

The research firm observed that as ATM deployers and financial institutions are looking to rapidly expand their networks, as there are huge opportunities to deploy advanced ATMs that can take advantage of the wide range of services today’s technology can offer.

Self-service opportunities in the Philippines

In the Philippines, which is currently home to around 18,000 ATMs, there are particularly big opportunities. RBR noted that around two-thirds of the country’s population is still unbanked, with banking services notably lacking in rural areas. Therefore, the deployments of ATMs to these areas, backed by initiatives from the country’s central bank, will look to boost inclusion.

This will also require banks to expand their network. RBR noted that in order to provide services to the newly banked population, there will be a push to move transactions away from the teller to the self-service channel.

Potential for growth in ATM numbers

Improved access to ATMs will play a major part in this. According to recent figures from the World Bank, the Philippines has one of the lowest concentrations of machines in the region, with just 23 ATMs per 100,000. By comparison, the leading nations in Asia-Pacific are developed countries; South Korea (278 per 100,000 people), Australia, (164) and Japan (127)

At the other end of the scale, Myanmar takes the bottom spot, with just one ATM for every 100,000 people. However, even here, efforts are being made to boost the self-service channel. Vikram Kumar, country manager for Myanmar at the International Finance Corporation, stated that as banks in the country face additional demands due to improved economic growth, most financial institutions will need to upgrade their technology capabilities.  Myanmar is also expected to be one of the fastest growing ATM markets in the world in coming years.

China to expand services

Elsewhere, efforts are also underway to expand the range of ATM services and functionality in China. This is now the world’s largest market for ATMs, thanks to concerted efforts by banks to migrate transactions to the self-service channel. As a result, the country accounted for almost a quarter of global ATM transactions in 2015. The growth in China is so large that 80,000 new ATMs a year are continually being added to the install base.

For example, China Merchants Bank is looking to incorporate technologies such as facial recognition into its ATMs, to give customers more options and provide an experience they are already familiar with from other digital channels. This is an area that traditional retail banks may have to focus on closely in order to fend off challenges from emerging Fintech providers.

Zhu Sihua, retail banking deputy general manager at the bank’s Shanghai branch, told the South China Morning Post: “Banking of tomorrow will require more personalized, mobile services and traditional banks like us can better integrate online and offline resources such as ATMs.”

 

Written by Colin Gordon

Colin Gordon

Colin Gordon is a SelfServ Marketing Manager and is based at NCR's R&D Center in Dundee, Scotland. Colin is responsible for the marketing of NCR's financial hardware portfolio with a specific focus on Cash Dispense ATMs & financial trends.

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