The global economic crisis continues to take its toll on ATM-distribution growth in some parts of Europe, but Russia’s ATM growth remains strong, new data show.
As the Central and Eastern Europe ATM market has matured, growth in deployments has slowed from rates that were as high as 30% in the mid-2000s. The global recession also has played a role in reducing ATM-deployment growth in the region, which still registered a 10% jump in 2011, says London-based strategic research and consulting firm RBR.
ATM deployment growth in Central and Eastern Europe was 28% in 2008 and 11% in 2009, according to RBR data.
Russia, which added 15,000 of the 18,000 new ATMs in the two regions, drove much of the deployment growth last year, according to RBR’s May 15 report “ATMs and Cash Dispensers Central and Eastern Europe, 2012.” By comparison, ATM deployments in Lithuania fell by 20% last year because the country’s third-largest deployer filed for bankruptcy, RBR said.
Without Russia’s ATM activity, the region’s deployment-growth rate was just 3% last year, down from 4% in 2010.
The drop is directly related to the global recession, Andrei Charniauski, an RBR associate, tells PaymentsSource. Mergers and acquisitions, bankruptcy filings, and the sharing of networks to widen access and reduce “disloyalty fees”–those charged for out-of-network withdrawals–all led to a reduction in the need for more ATMs, he says.
“The fact that (banks’) business isn’t growing as fast as in the past forces them to reassess their plans for new ATMs, (and) that’s why we’re seeing slower growth in most countries,” says Charniauski. “It’s a sign of caution. Many markets exploded five to seven years ago, and a lot of banks went for it in terms of ATMs and didn’t really think about how this relates to the growth of their business.”
That region’s 10% boost in ATM deployments last year still was significantly greater than the 1.4% for Western Europe, according to RBR’s April report on ATM deployment in Western Europe.
The economic uncertainty in the Eurozone was a chief contributor to the difference in deployments within the regions, David Albertazzi, a senior analyst at Aite Group, tells PaymentsSource.
“Bank profitability is really under pressure and so banks are being more conservative in terms of their investment,” says Albertazzi. “It’s directly linked to how healthy the financial institutions are and how willing they are to invest.”
New technology is featured in the ATM-deployment growth in Central and Eastern Europe, the report notes. The number of new ATMs that can accept deposits jumped 37% in 2011 in the two regions, to nearly 26,000, RBR said.
Also growing is the use of security technology.
Seventy-three percent of all ATMs in the two regions were covered by security cameras, while 96% were compliant with the more secure EMV smart card standard, 99% supported high 3DES encryption, and “over half” had antiskimming devices, the report said.
Some of the regions’ markets also added ink-staining and biometric-identification technology in their ATMs, the report said.
The growth in the number of ATMs in Central and Eastern Europe will provide plenty of opportunity for ATM-related businesses, says Albertazzi.
“A lot of the banks are in the process of modernizing the infrastructure, so that’s what’s driving the growth,” he says. “Going through that process of modernizing infrastructure, there’s a lot of opportunities to leverage common software platforms.”
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