4 minute read
The ATM pool table
Shared provision and even outsourcing of ATMs is a growing global trend, but it’s not happening everywhere in the same way or at the same pace. Senior research analyst Laura Raus gives us a snapshot from RBR’s latest Global ATM Market and Forecasts report
As customers turn to digital payments, and demand for cash wanes, banks in an increasing number of countries are looking to pool their ATM resources, to keep cash accessible to their customers at an acceptable cost.
In many countries, one often sees several ATMs in close proximity, each carrying the branding of a different bank. A single ATM could meet customer demand, but multiple machines remain in place because each bank fears inconvenience for its customers and a loss of visibility and competitiveness if they remove machines. Nevertheless, excess ATMs are an increasing burden for banks. While it is already fairly common for banks to have agreements for the mutual use of ATMs, and to remove ATM fees for each other’s customers, full ATM pooling – whereby banks relinquish ownership of their machines to a single deployer, which operates a shared fleet – remains rare.
POOLING GETS UNDERWAY IN BENELUX
Comprehensive ATM pooling arrangements have existed in Finland and Sweden for a number of years and, more recently, pooling has gained a foothold in Belgium and the Netherlands, too.
Since 2019, the three largest banks in the Netherlands have been transferring their ATMs to a joint organisation, called Geldmaat. This has facilitated the removal of many ATMs from locations where the machines of different banks were in close proximity. The migration is due to be completed in 2021, after which all bank ATMs in the country will be managed by Geldmaat. Geldmaat ATMs do not carry the branding of individual banks and are located away from bank branches.
Following their Dutch counterparts, the four largest banks in Belgium announced, in 2019, that they would develop a network of ‘bank-neutral’ ATMs – a project that has been named Batopin (Belgian ATM Optimisation Initiative). The first such ATMs are due to be deployed in 2021, with the pooling expected to be completed by the end of 2025 at the latest. Participating banks aim to ensure that 95 per cent of the population has access to an ATM within five kilometres of their home or workplace.
Pooling agreements are easier to achieve in small markets with a limited number of ATM deployers. In the Netherlands, there were only four ATM-deploying banks in 2019, when the Geldmaat migration started. The one bank deployer that was not part of Geldmaat closed all of its nearly-300 ATMs in 2020, as they had become a target of explosive attacks.
Indeed, the frequent and increasingly powerful attacks on ATMs in the Netherlands was a factor in the decision by the largest Dutch banks to pool their machines. Similarly, in Brazil, a high number of physical attacks was one reason major banks there decided to hand over most of their off-site ATMs to joint organisation TecBan between 2014 and 2017.
AGREEMENTS STILL HARD TO REACH
In large markets where cash is still commonly used, or where the security issues are less severe, pooling agreements are harder to reach. One concern is that smaller banks would benefit more and some banks would lose competitiveness.
In South Korea, four major banks introduced joint ATMs, which carry the brands of all of them, at four Emart stores, in August 2020. However, it was reported in January 2021 that banks are hesitant to expand this initiative, despite recognising the efficiency achieved by the pilot.
In Thailand, it was reported in 2019 that interbank organisation National ITMX has decided to pursue a white-label model where a chosen third party would manage and possibly also own bank ATMs. In January 2020, two major banks – Kasikornbank and GSB – jointly launched a white-label ATM pilot project in five provinces, but have announced no further steps since it ended in October.
In Japan, some regional banks have set up joint ATMs, as well as joint branches, in recent years. Japanese megabanks, however, have not followed suit so far, only entering into agreements to remove fees.
SMALL-SCALE COOPERATION IS A GOOD START
Where a full pooling agreement cannot be reached, smaller-scale cooperation might be a stepping stone for the future. One factor that helped Dutch banks to agree on Geldmaat is that they had previously already handed over responsibility for cash replenishment and simple maintenance of their ATMs to joint organisation GSN, a predecessor of Geldmaat.
Dutch banks have also long been coordinating when it comes to ATM locations. The Dutch Payments Association operates an information system that helps its members estimate which ATMs are more essential for keeping cash accessible. This is on the back of an agreement made by various stakeholders at the National Payments Forum that cash should remain accessible in the face of increasing digital payments. This agreement has helped reduce any concerns that the Geldmaat project could lead to under-provision of cash services.
MORE ATM POOLING LIKELY
With the uptake of cashless payments, the pressure on banks to find efficiencies in cash services provision is only likely to increase. Accordingly, sooner or later, we are likely to see more agreements between major banks to pool their ATM resources in order to focus more on developing their distinctive digital channel propositions. n RBR’s annual report, Global ATM Market and Forecasts To 2026, covers 183 countries and is a comprehensive analysis of the development and future of the global ATM market.
