The Asia-Pacific market is currently one of the most exciting parts of the globe for financial services innovation, with some of the world’s fastest-developing economies offering huge potential for forward-thinking financial institutions.
The push to encourage greater financial inclusion in the region has also been helping bring many more people into the formal financial system. This is something that has been reflected in greater demand for new ATM technology to ensure these individuals are well-served and have access to cash wherever they are.
Asia-Pacific leads the way in ATM growth
Recent figures from Retail Banking Research (RBR) revealed that overall, the number of ATMs deployed around the world grew by three percent in 2016, reaching 3.3 million. However, the pace of growth was significantly stronger in the Asia-Pacific region, where the vast majority of new deployments took place.
Asia-Pacific saw growth of six percent last year, which means that the region is now home to more than half the world’s ATMs. This is a trend that shows no sign of slowing down anytime soon, as RBR has forecast that there will be two million ATMs in Asia-Pacific by 2022 – equating to 54 percent of the global total.
Nearly a million of these will be in China alone, meaning that by 2022, China will have more devices than all North American and western European countries combined. Indeed, in 2016, this country added “by far the most” new ATMs. RBR observed that this is a result of smaller, local banks throughout the country seeking to gain new customers and improve their offerings to existing customers by expanding their ATM presence to more rural areas, as well as urban locations that were previously underserved by these devices.
However, the report noted that the rate of growth is slowing in China – but not necessarily due to a reduction in demand for such services. In fact, quite the opposite is happening, as banks turn towards alternative self-service terminals. RBR noted these machines are cheaper to install than ATMs and typically offer a wider range of functionalities, thereby freeing up more traditional ATMs for cash-focused transactions.
Financial inclusion efforts pay off
The growth in the region was far from limited to China. RBR also highlighted the likes of India, the Philippines, Pakistan and Bangladesh as among the nations that have recorded strong growth in ATM deployments. What all these countries have in common is strong efforts to boost financial inclusion.
RBR noted: “In these countries, financial inclusion initiatives by governments and banks have proven successful in bolstering the number of banked individuals. This in turn has helped swell demand for cash, heightening the need for additional ATMs.”
This illustrates how – despite suggestions from some quarters that such drives will primarily boost digital payments solutions – cash will still have an essential role to play, particularly as more people sign up for bank accounts for the first time. For many, physical currency remains the most comfortable and familiar way of making purchases, and this will not change as they are introduced to the banking system.