The increase of ATMs installed away from bank branches is being driven by factors including banks’ efforts to be more cost-effective, and the rise of independent ATM deployers, new research from RBR suggests.
The amount of ATMs that are located away from bank branches has risen to 51% globally in 2015, according to the strategic research firm.
A key reason has been the well-documented decrease of the amount of people visiting branches, with them finding answers to their financial problems online or other ways. Subsequently, banks begin to close more and more branches, with over a 1000 high street branches being closed in the last two years alone.
Therefore, faced with rising costs of operation and decreasing amount of in-branch visits, banks are “streamlining their branch networks” and turning to off-site ATMs, in order to be more cost-efficient. In the Netherlands, the closure of 900 branches between 2011 and 2015 was actually accompanied by the installation of 800 off-site ATMs.
It goes a long way to explain how, despite the aforementioned bank closures in the UK, cash withdrawals are still rising. According to the latest data from LINK, UK’s ATM network. Friday 23 December 2016 set a new record for LINK cash machine withdrawals with £730m being dispensed by ATMs on that day. This was the largest amount withdrawn in a single day, LINK says. Importantly, it’s a huge increase on last year’s total of £634m.
RBR suggests that banks see ATMs as a less costly alternative to branches. It says that banks struggle in countries with large rural populations because they would be unable to open a branch in each village or small town and thus ATMs provide a crucial, cost-effective service. They can be the only point of contact between banks and customers and are therefore crucial in increasing financial inclusion.
The increase of independent companies has also contributed to increasing growth of off-site ATMs. These independent ATM deployers (IAD) now comprise 16% of the ATM terminals globally, most of which are set up in non-branch locations.
Rowan Berridge, who led the RBR research, commented: “As IADs expand their fleets, more and more retail centres, transport hubs and other non-branch locations will host ATMs. Coupled with increasing off-site deployment by banks, in future it will be even easier for customers to find a convenient ATM away from branches.”
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