European ATM base expands, despite falls in its two largest markets

(AllPayNews) - Retail Banking Research (RBR) has just published the latest edition of its highly respected annual survey, “ATMs and Cash Dispensers Western Europe 2010”. Some of the key findings from the 18-country study are presented here.

Despite the relative maturity of many of the region’s markets and the problems caused by the global financial crisis, the western European installed base of ATMs continued to grow in 2009 to reach 378,747. Given the economic backdrop, any expansion could be regarded as an achievement, but the increase of 8,459 installations was nevertheless the lowest absolute annual increase for 10 years. Percentage growth fell for the second consecutive year, to just 2.3%, also the lowest for a decade.
ATM Installed Base in Western Europe, 2005-2009

Source: ATMs and Cash Dispensers Western Europe 2010 (Retail Banking Research)

UK and Spain contract on IAD removals and branch closures

The region’s two largest markets – the UK and Spain – contributed the most to the slowing growth: the number of installations fell by a combined 1,252 ATMs in these two countries in 2009. In the UK this was due to a contraction in the independent ATM deployer (IAD) sector, particularly at surcharging ATMs, while in Spain it was caused by some banks closing branches in an attempt to cut costs.

Spain was not the only country to close branches – the total number of bank branches in western Europe fell by nearly 2,000 in 2009, leading to falls in the number of ATMs in Denmark, the Netherlands, Norway and Ireland.

Growth in Italy, Germany and France higher than in 2008

In contrast, the other three large western European markets – Italy, Germany and France – have seen higher absolute growth rates in 2009 than in the year before. Italy has contributed the most to the overall growth. The Italian market grew by over 3,100 ATMs, mainly due to expansion by Banca Nazionale del Lavoro, which has a long-term plan to migrate transactions away from the teller, and Banco Posta, which still has a large number of post offices without ATMs. Deployers in Germany and France installed a further 3,900 terminals, with notable increases in the number of ATMs deployed by Crédit Mutuel and German IADs.

Deployers upgrade to automated deposit ATMs

The popularity of automated deposit at ATMs in western Europe increased once again in 2009 – the number of terminals offering this facility increased by 23%. In eight western European markets over 10% of all ATMs now offer automated deposit facilities. At the same time, deployers have continued to withdraw envelope deposit terminals – the number of ATMs with this facility decreased by 11% in 2009.

Growth in the number of recycling machines exceeded that of automated deposit terminals. By the end of 2009, there were almost 10,000 recycling ATMs installed, 82% of which are found in Germany and Belgium.

EMV compliance approaches completion

Deployers have continued to improve the security of their ATM fleets by increasing the proportion of machines with chip card readers to 95%. EMV compliance has reached 92% across the region, and in eight countries – Denmark, Finland, France, Ireland, Norway, Sweden, Switzerland and the UK – all ATMs meet EMV standards.

Level of EMV Compliance at ATM in Western Europe, 2005-2009

Source: ATMs and Cash Dispensers Western Europe 2010 (Retail Banking Research)

Cash withdrawal volumes bounce back

After a striking lack of growth in 2008, the total volume of ATM cash withdrawals grew by 2.4% in 2009, marginally higher than growth in the number of ATMs. Average usage in the region rose slightly, to 2,786 withdrawals per terminal per month.

Cash withdrawal usage is highest in Finland, where the average volume is 8,737 cash withdrawals per ATM per month, while Italy has the lowest level at just 1,432. Finnish cardholders tend to visit ATMs frequently and withdraw small amounts on each occasion. Furthermore, Finland’s density of ATMs to population is the second lowest in the region. Italy’s low usage level is partly explained by its high average withdrawal value.

Outsourcing of first line maintenance rises

Cash replenishment is outsourced for 44% of installations overall, but it is outsourced for a much higher proportion of off-site terminals (87%) than branch machines (27%), as banks are more likely to have the personnel and resources to replenish their machines on their own premises than elsewhere.

First line maintenance is often carried out by bank staff for branch ATMs, but is still outsourced for 33% of branch installations. In contrast, first line maintenance is outsourced for 78% of off-site ATMs. In both cases, it is often performed by the provider of cash replenishment. Overall, the share of ATMs for which first line maintenance is outsourced in western Europe rose from 42% to 46% in 2009.

The vast majority of deployers in the region outsource second line maintenance for their branch ATMs and off-site machines, although some UK IADs employ engineers who are able to resolve major breakdowns.

Notes to editors

This information draws on RBR’s most recent analysis of western European ATM deployment: ‘ATMs and Cash Dispensers Western Europe 2010’. Since its first appearance in 1983, RBR’s annual survey has become the essential source of information to every major ATM supplier.
RBR is a strategic research and consulting firm with three decades of experience in retail banking, banking automation and payment systems. It assists its clients by providing independent advice and intelligence through published reports, consulting and newsletters. RBR is recognised as the leading provider of premium research reports on ATMs and payment cards. RBR also publishes Banking Automation Bulletin, a monthly research newsletter.
For more information, please visit www.rbrlondon.com or contact Andrei Charniauski on +44 20 8940 1398 or andrei@rbrlondon.com.

The information and data within this press release are the copyright of RBR, and may only be quoted with appropriate attribution to RBR. The information is provided free of charge and may not be resold to third parties.

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