ATM Future Trends Report 2012

ATM Future Trends Report 2012

Table of Contents
Page 3 Page 6 Executive summary Tom Harper, publisher, ATM Marketplace Survey results All respondents Industry segment Region Industry perspectives Debbie Bianucci, president and CEO, BAI Daryl Cornell, president and CEO, Triton Lachlan Gunn, director and coordinator, European ATM Security Team Flora Hamilton, executive director, ATMIA Europe Ian Kerr, general manager, Clear2Pay Uwe Krause, vice president of banking, Wincor Nixdorf Peter Kulik, vice president, product innovation and strategy, Vantiv LLC Leonor Machado, chair, Cash Working Group and Gerard Hartsink, chair, European Payments Council Michael OLaughlin, senior vice president, NCR Financial Services Steven Rathgaber, CEO, Cardtronics Tim Robinson, CEO, Talaris Tom Stevenson, president, Cash Connect Thomas Swidarski, president and CEO, Diebold Inc. Alan Walsh, vice president of banking, Wincor Nixdorf U.S. Page 90 Page 93 Special section: The state of cash Mike Lee, CEO, ATM Industry Association Further reading ATM Software Trends and Analysis NetWorld Alliance Alan Fryrear, chairman & CEO alanf@networldalliance.com Tom Harper, president tomh@networldalliance.com
ATM Future Trends Report 2012 2012 NetWorld Alliance LLC. 13100 Eastpoint Park Blvd., Louisville, KY 40223. (502) 241-7545. All rights reserved. No part of this publication may be reproduced without the express written approval of the publisher. Viewpoints of the editors are his own and do not necessarily represent the viewpoints of the publisher. All information was contributed by the companies. Any errors or omissions are not the responsibility of NetWorld Alliance.

www.atmmarketplace.com Joseph Grove, executive editor josephg@networldalliance.com James Bickers, vice president custom media jamesb@networldalliance.com Emily Wheeler, managing editor of special publications emilyw@networldalliance.com Courtney Bailey, assistant managing editor of special publications courtneyb@networldalliance.com

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ATM Future Trends 2012 2012 NETWORLD ALLIANCE

Executive summary

Weve Come a Long Way:

A Peek into the Next Exciting Chapter of the ATM Industry

Tom Harper Publisher, ATM Marketplace

Many thanks to ATMIA for collaborating with us on this comprehensive analysis of the threats, trends and opportunities facing the ATM industry during the next five years. This is one of the largest perception surveys of its kind, with approximately 500 respondents representing every major ATM market in the world. The data and industry opinions on the following pages will equip financial institutions (FIs), ATM manufacturers, independent ATM deployers (IADs), retailers, ATM suppliers, government regulators, ATM service providers, transaction processors, industry consultants and ATM investors with actionable future intelligence. Below are some of the significant differences we noticed between the 2009 survey and this years report.

Industry segment

Based on the breakdown of responses according to industry segment, it is clear that more financial institutions participated in the survey, especially medium to large institutions. In 2009, approximately five percent of respondents were FIs with $500 million to $1 billion in assets, and in 2012, eight percent of respondents were that size FI. Also in 2009, 11 percent of respondents were FIs with $1 billion to $500 billion in assets, while in 2012, approximately 18 percent of respondents fit that description.

Other Other
21% 21%

2012 2012

35%
FI 35%

FI

2009 2009
Other
29% Other
29%

23%

FI 23%

FI

ATM parts ATM parts provider provider 5%

5%

ATM ATM manufacturer 12% manufacturer

12%

ATM parts ATM parts provider provider 6%

IAD 19% ATM manufacturer 12% EFT network ATM manufacturer 12%4%

EFT network 3% Processor EFT network

6%

IAD 20% 20% Processor 6%

IAD

3%

5% Processor

5%

IAD
19%

EFT network Processor

4% 6%

ATM Future Trends 2012 2012 NETWORLD ALLIANCE

Executive summary

Outsourcing

Interestingly, in the 2009 survey, when asked whether FIs will outsource their ATMs to IADs, the majority of FI respondents said it would be practiced by some, and most IADs believed it would be a dominant trend. In our 2012 survey, the majority of respondents in all three major industry segments FIs, IADs and manufacturers said outsourcing would be practiced by some. This represents a sea change for the independent deployers in our industry, as a onceviable business plan for most IADs has now faded. With the increasing regulations and requirements and the shrinking margins, IADs will continue to consolidate, and the small deployers that deliver exceptional customer service and unique offerings will be attractive acquisition targets.

2012
Offering prepaid-card dispense at the ATM or other self-service channel ATM manufacturer 11%
7%

2009
Deploying solutions that integrate mobile banking and marketing with the self-service channel 38%
FI 45%

2009
0%

Offering prepaid-card dispense at the ATM or other self-service channel ATM 11% manufacturer
11% 0%

2009

FIs, independent deployers and retailers partnering EFT network to reach unbanked and 14% underbanked consumers 18%
Processor

FIs, independent deployers and retailers partnering to reach unbanked etwork EFT nand underbanked consumers 18% 18%

Deploying solutions that integrate mobile banking and marketing with the self-service channel FI 38%
38%

Reaching out 16% to digital natives, those who grew up with digital and mobile technology 12%

IAD 18%

Advanced self-service solutions, such as bill payment and check cashing 21%

12% Reaching out to digital natives, those who grew up with digital and mobile technology 12%

Processor

IAD 21%

Advanced self-service solutions, such as bill payment and check cashing 21%

Popular trends

FIs and IADs agree that mobile technology will have the greatest impact on the global industry over the next five years; however, the majority of manufacturers (37 percent) said cash recycling would make the biggest impression.

Greatest impact on the global ATM industry 2012 2009

Mobile technology Cash recycling Govt regulations Interchange Reduction Technology/equipment to protect cardholder PINs 42% 14% 9% 9% 9% Technology/equipment to protect cardholder PINs Deployment of more Windows-based ATMs Self-service software upgrades/patches Movement to virtual private networks (VPNs) Working with outside vendors compliance standards 29% 20% 17% 13% 12%

ATM Future Trends 2012 2012 NETWORLD ALLIANCE

Executive summary

All segments cited deploying solutions to integrate mobile banking and marketing with the self-service channel as the most popular five-year trend. Indeed, as I said in 2009, banks are still leading the way in mobile applications, perhaps because they still view ATMs as one channel among many.

Most popular trend 2012

Deploying solutions that integrate mobile banking and marketing with the self-service channel Advanced self-service solutions, such as bill payment and check cashing Reaching out to digital natives, those who grew up with digital and mobile technology FIs, independent deployers and retailers partnering to reach unbanked and underbanked consumers Offering prepaid-card dispense at the ATM or other shelf-service channel 45% 19% 16% 14% 7%

2009
Deploying solutions that integrate mobile banking and marketing with the self-service channel Advanced self-service solutions, such as bill payment and check cashing FIs, independent deployers and retailers partnering to reach unbanked and underbanked consumers Reaching out to digital natives, those who grew up with digital and mobile technology Offering prepaid-card dispense at the ATM or other shelf-service channel 29% 20% 17% 13% 12%

Growth of ATMs

In 2009, Retail Banking Researchs Global ATM Market and Forecasts to 2013 study predicted that the global ATM installed base would reach 2.5 million installations by 2013. With the number sitting at more than 2.3 million, that forecast appears to be right on track. RBRs most recent report puts the number of installed units at 3.4 million by 2017. This corroborates my own 10-year prediction back in 2007 that we would double the 1.56 million machines then in existence. Lets hope were all correct and that we add another million or so ATMs to todays footprint! I agree with ATMIA CEO Mike Lee that the use of cash will continue to grow, fueling the aggressive expansion in our industrys collective crystal ball. The next five years will be exciting, indeed.

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ATM Future Trends 2012 2012 NETWORLD ALLIANCE