Trends toward both specialization and diversification are keeping manufacturers of automated teller machines busier than ever before, a survey by Mentis Corp. indicates.
The Durham, N.C., research firm found that the ATM industry continued last year to defy repeated predictions of a slowdown, increasing machine shipments by 37%, to 33,654. Total U.S. installations of ATMs and cash dispensers grew by 17%, to 132,358.
Almost as many machines are moving into the nonbank as into the traditional bank-thrift market, and limited-function cash dispensers are selling considerably faster than conventional, full-service ATMs.
"Nonbanks now account for nearly half of ATM terminal shipments and we expect this trend to continue," said James B. Moore, president of Mentis Corp. "Many of these nonbanks are retail firms that use ATMs to generate foot traffic and sales at their locations."
Banks are contributing to the "nonbank" trend by placing machines in off-premises locations like shopping malls and supermarkets. But they are also showing an increasing tendency to add functions like statement printing and check reading to at least some of their ATMs, running counter to the desire for quick service that many off-premises sites try to fulfill.
All this has sustained a near boom in business for the makers of the machines. The three perennial leaders-Interbold, NCR, and Fujitsu - increased their shipments last year by 23%, 35%, and 20%, respectively. Two smaller companies that make simplified cash dispensers almost exclusively for the nonbank market-Triton and Tidel-doubled or nearly doubled their shipments.
Interbold, the joint venture of Diebold Inc. and IBM, saw its share of installations shaved by three points, to 55%. NCR held steady at 35%, Fujitsu gained a point to 6%, and others led by Triton and Tidel doubled, to 4%.
Mentis is not the first to document the nonbank, off-premises, and cash dispenser phenomena. But it said it is the only data provider to be reconciling what financial institutions say they are doing with shipment data provided by vendors-with the vendors' active cooperation.
"We go directly to the banks and don't just use information supplied by the vendors or the networks," said Beth Phillips, the project manager.
"We count installations as opposed to just shipments, to see how many are actually acquired and installed by end users," she said. "Not all shipments are actual installations in the ground."
Mentis said it combines vendor data with its own bank technology survey statistics that are accurate within three percentage points at the 95% confidence level.
Faulkner & Gray's Bank Network News put the 1996 total ATM figure at about 139,000, 5% higher than Mentis. The Nilson Report said new U.S. ATM shipments grew 41% in 1996, to 34,307 units. Cash dispensers jumped by 67% and accounted for 60.9% of total shipments in 1996, Nilson said.
Mentis is projecting that banks and thrifts, which had 93,562 ATMs and cash dispensers in 1995 and 105,445 in 1996, up 12%, will rise 15% this year.
But at 16,122, the number of new units shipped to the nonbank/nonthrift market almost equaled the 17,132 going to depository institutions. Mentis said the nonbank/nonthrift installed base, 26,913 and 20% of all ATMs and cash dispensers, should grow by 58% this year.
On-premises installations by banks and thrifts rose 9% last year; cash dispensers in that category were up 93%; deposit-taking ATMs 6%. These institutions' off-premises machines were up 24%, with the growth rates of both cash dispensers and full-service ATMs about the same.
Half of banks in the Mentis survey said they had ATMs in convenience stores in 1996, up from 35% in 1995. The percentage with ATMs in supermarkets rose to 35% from 28%, and those in malls fell an insignificant one percentage point, to 19%.
Mentis said larger banks-those with more than $4 billion in deposits-are most likely to be adding features and functions to their ATMs. Of this group, 85% expect to be marketing services via ATM screens by yearend, up from 77% in 1996. Those doing statement printing are expected to rise to 69% fro 47%, document dispensing to 51% from 33%, and check capture to 43% from 15%.