ATM Future Trends Report 2012: the main findings
From mobile technology integration to cash recirculation, and government regulations to interchange reduction, automated teller machine (ATM) deployers, vendors and financial institutions expect the next five years to offer exciting opportunities and great challenges for the ATM industry. ATMmarketplace.com surveyed the global ATM industry to find out what stakeholders in each region thought would be the key trends over the next five years. The results, along with commentaries from industry insiders, will be published in the ATM Future Trends 2012 Report (see 'related links' below to pre-register for the report).
498 respondents, representing ATM deployers, manufacturers and processors, amongst others, participated in the global ATM Future Trends Report 2012. 50.4 percent of respondents were located in North America, 19.7 percent in Europe and 16.5 percent in the Asia Pacific region. Respondents from Africa, Middle East, Central and South America make up 13.4 percent of respondents.
Industry respondents from around the world agreed that mobile technology will have the greatest impact on the ATM space over the next five years. Exactly how that impact will manifest itself however, is something that remains unclear.
Figure 1: ATM Future Trends Report 2012: Over the next five years, which of the following do you believe will have the greatest impact on the global ATM industry?
The predictions on the top three trends to impact the industry differ slightly by region:
- Africa: Security / EMV1 (72.1 percent), mobile integration (49.4 percent), followed by cost reduction (45.6 percent).
- Asia Pacific: Security / EMV (64.1 percent), mobile integration (61.4 percent). An equal percentage of respondents (39.4 percent) expect major impact as a result of cash-in and recirculation at the ATM, as well as the adoption of new technologies and functionalities by suppliers.
- Europe: Mobile integration (57.9 percent), security / EMV (55.3 percent), followed by cash-in and recirculation at ATMs (42.3 percent).
- Middle East: Security / EMV (67.4 percent), mobile integration (56.1 percent), followed by outsourcing of ATM networks (43.6 percent).
- North America: Migration to chip and personal identification number (PIN) technology (65.6 percent), mobile integration (58.7 percent), followed by security standards and other compliance issues (56.3 percent).
Interestingly, when asked which would be the most popular trend in serving customers who prefer cash, respondents again pointed to mobile. In all regions surveyed, the deployment of solutions that integrate mobile-banking and marketing with the self-service channel was the number one trend identified. By all accounts, it would seem that the next five years will revolve around the impact of mobile technology on a variety of industries. The ways in which the ATM industry embraces or resists this trend will unfold soon, and it promises to be a captivating journey.
Migration to chip and PIN technology
The industry weighed in on the question of migrating to chip and PIN technology. When EMV will be fully implemented in North America remains a hot topic for discussion, with global respondents agreeing that the shift will happen within the next three years. Liability shift announcements from both Visa and MasterCard in 2011, further confirm the U.S.'s long-awaited transition to EMV.
In comparison, 86.3 percent of cards, 93.6 of points of sale and 96.6 of ATMs in Europe are already EMV-compliant as of mid 2011, according to latest data available. The subject is particularly relevant to European card issuers, given that card fraud is now migrating rapidly to points of least resistance, i.e. countries which have not yet implemented chip and PIN technology. Markets which continue to rely on magnetic stripe technology allow fraudsters to 'skim' (copy) data stored on the magnetic stripe. To-date, EMV-compliant cards issued in Europe also continue to carry the magnetic stripe as a secondary form of authentication. European banks are therefore increasingly liable for losses resulting from European card holders falling victim to fraudulent card payments made in the U.S for example.
In five years, what percentage of successfully completed ATM transactions will not be cash withdrawals?
The rise of mobile technology solutions and increasing transaction options at the ATM, including bill-pay, ticket purchasing, deposit and other functions, may have been on respondents' minds when they answered the question asking what percentage of ATM transactions will not be cash withdrawals in five years time.
The majority of respondents from North and South America, Europe, Asia Pacific and Africa said that they thought between 20 and 30 percent of ATM transactions would not be cash withdrawals. 50 percent of respondents from Central America however, predicted that more than 30 percent of transactions will not be cash withdrawals. The majority of Middle East respondents were split, with 30 percent saying more than 30 percent would involve transactions other than cash withdrawals and another 30 percent putting the number between 20 and 30 percent.
The ATM Future Trends Report 2012 also includes commentaries from contributors representing several segments of the industry who provided their insights on issues and trends that they believe will shape the ATM industry during the next five years (see 'related links' below for the commentary by Gerard Hartsink, European Payments Council () Chair, and Leonor Machado, Chair of the Cash Working Group).
One thing that remains clear is that all regions believe there is room for the channel's continued growth and success. Here's to the next five years.
Kim Williams is the former editor of ATMmarketplace.com.
To pre-register for the 'ATM Future Trends Report 2012', click here.
The 'ATM Future Trends Report 2012': Commentary contributed by EPC Chair Gerard Hartsink, and Leonor Machado, Chair of the EPC Cash Working Group, outlining the EPC initiative to standardise the size of ATM cash cassettes and cash transport cases and to create interoperability among Intelligent Banknote Neutralisation Systems.
Related articles in previous issues:
All Newsletter articles published in the 'SEPA for Cash' section
Time to Prepare the Eulogy - 'Six Feet Under' for the Magnetic Stripe in SEPA - Eurosystem recommends migration to chip-only cards ( Newsletter, Issue 10, April 2011)
1EMV is an industry standard to implement chip (and personal identification number security) for card transactions to combat fraud.
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