Cashless society not in sight as ATMs are still in demand

Dubai - The ATM is still seen as the most common self-service channel for consumers to interact with their bank

Demand for automated teller machines (ATMs) is on the rise across the globe despite a move to promote cashless society and the trend will continue in near future, says an industry expert.
George Flouros, regional vice-president, NCR Financial Services for India, Middle East and Africa, said currently over 3.1 million ATMs are in operations around the world and will surpass four million mark by 2020.
Referring to retail banking research - global ATM market and forecasts to 2020, he said ATM market in the UAE is forecast to expand by 22 per cent between 2015 and 2020, to reach around 6,300 ATMs at the end of this period. This implies an average density of 1,119 ATMs per million people compared to 914 in 2014.
"Despite the growth in online, mobile and telephone banking - interestingly the ATM is still in many instances seen as the most common self-service channel for consumers to interact with their bank," Flouros told ?Khaleej Times during his recent visit to Dubai.
NCR is the foremost ATM manufacturer worldwide, providing CRM software as well. It has been active in Dubai for 50 years and their client portfolio includes the likes of NBAD, ADCB, UNB, ADIB, UAE Exchange, First Gulf Bank and Al Hilal Bank, among others.
NCR is headquartered in Duluth, Georgia, with over 30,000 employees and does business in 180 countries. It records more than 550 million transactions daily across retail, financial, travel, hospitality, telecom, technology and small businesses.
Investing in ATMs
Flouros said the number of ATMs will continue to grow as banks are keen on expanding their branch networks in an effort to extend their reach across the country. In a bid to encourage migration from the counter, a lot more banks will invest in lobby ATMs and more self-service areas. "Automated deposit and cash recycling ATMs are expected to increase over the forecast period as banks will use them to increase efficiency and reduce costs," he said.
He said the total volume of cash withdrawals is forecast to reach almost 370 million withdrawals a day by 2020, an increase of 54 percent on the 2015 total. Despite the expected increase in the use of payments cards for use at EFTPOS, growth in ATM withdrawals is expected to be strong in coming years.
To a question, he said NCR has provided about 800,000 ATMs worldwide so far.
"There are over 25,000 ATMs in GCC in total as per 2014-15 data - with NCR's market share being over 50 per cent," he said.
About the key factors influencing the growth of ATMs in the UAE, he said demand from customers is the strongest driver of growth in the emirate due to the large expatriate workforce.
"This segment of population is characterised by high mobility and low customer loyalty, as often they stay in the country only for a few years," he said.
Flouros further said the banking sector is very competitive, as customers can change bank accounts easily, and often tend to do so when changing employment. "This drives deployers to install new ATMs particularly offsite, and also to invest in new attractive functionalities, to increase brand awareness."
To a question regarding factors like increased customer demand for ATM services, newer functionality, and branch operations transformation led to growth in the sector, he was quick to respond positively.
"Yes. Mobile technology is transforming banking, given the sheer scale of mobile app and online banking users. It could start to influence how consumers engage and interact with the ATM channel too though.
"We are beginning to see functionality between mobile phones and ATMs coming together, enabling customers to withdraw cash using their smartphone; meaning they can leave their card in their wallet. These enhancements also allow people to customize the ATM experience, which is increasingly becoming similar to a smartphone or tablet in terms of usability and design," he explained.
He said more banks are transforming their branch operations to develop new revenue streams, optimising the range of operations and offering the use of alternative delivery channels in-branch, such as ATMs, contact centres, internet and direct sales.
"With new added features such as automated deposit functionality, banks are able to provide services for customers for which a branch would previously have been needed. Deployers are increasingly focused on expanding and optimising their ATM fleets, as opposed to operating new branches, as this has proved to be more cost effective and enables them to provide services to non-account holders."
Growth for the industry
Flouros said the surge of internet and mobile commerce, as well as rapidly changing consumer behaviour is driving the omni-channel revolution. Digitally savvy consumers want the freedom to do transactions on the move, whether it is bank, store, restaurant, airline or telecom service provider using omni-channel platforms such as online, mobile, kiosk or at the ATM.
"Today, organisations are investing in solutions that help them to transform their service offerings with innovative technologies, to help them create unique customer experiences, streamline operations and grow profitability while staying competitive," he said.
Other new features, such as Interactive Teller ATM's allow automated deposit functionality enabled by a LIVE teller, 24x7 to help complete over 95 per cent of all branch banking transactions right at the ATM, are increasingly able to provide services to customers for which a branch would have been needed. The priority for banks now appears to be the expansion and optimisation of their ATM fleets, as opposed to the operation and introduction of new bank branches - a cost-effective policy that also enables them to target non-account holders, he said.
ME innovation hub
To a question about rise of wearable technology and digital banking in the region, he said wearable technologies have seen majority of movement in the US for now. We are now seeing that trend begin to slowly move to Europe and infiltrating Asia and the Middle East
"The Middle East is fast emerging as a hub for innovation, with new start-ups and new products transforming the entire transaction process. Commerce is constantly evolving and technology continues to transform the way consumers, businesses, citizens and governments connect, shop, buy and transact," he said.
Flouros said future purchases will be dominated by connected devices that will provide seamless transactions whilst generating exponential amounts of data. Smart devices will anticipate customer's needs and save them time by purchasing products for them.
"This convergence of physical and digital commerce is often referred to as a futuristic concept yet it's not futuristic at all, it's happening now. Consumers are expecting smarter ways to pay, giving retailers the opportunity to capitalise on creating better and memorable customer experiences."
From developing the cash register in 1884 to launching the first self-service check-out technology in 1992, he said NCR has led the world in providing innovative technology solutions for financial transactions.
"We have a rich legacy of recognising future market demands, predicting customer needs, and delivering disruptive technology solutions to address them. Today, we are helping businesses evolve their legacy processes and effectively engage digital consumers at every touchpoint in the consumer journey."
"Channel integration and transformation are synonymous with digitization, and NCR is building global, omni-channel capabilities and rewriting our operations playbook with these changes at the core. Omni-channel has evolved. It is a strategic, end-to-end solution and a horizontal opportunity fuelled by the Internet of Things, mobile devices, the cloud and big data," he added.
Future of ATMs
To a question about the UAE efficacy in adopting next-gen banking solutions, Flouros said with new added features such as automated deposit functionality, banks are able to provide services for customers for which previously a branch would have been needed. Deployers are increasingly focused on expanding and optimising their ATM fleets, as opposed to operating new branches, as this has proved to be more cost effective and enable them to provide services to non-account holders.
"More banks are transforming their branch operations to develop new revenue streams, optimising the range of operations and offering the use of alternative delivery channels in-branch, such as ATMs, contact centres, internet and direct sales," he said.
- muzaffarrizvi@khaleejtimes.com