According to the findings of a new study carried out by Retail Banking Research (RBR) the number of ATMs in China reached 208,000 by the end of 2009. The ATM installed base in the country increased by a record 42,000 units, beating by some margin the 36,000 increase the previous year, which itself had been a record. This phenomenal expansion occurred despite a slowdown in economic growth in the country last year 2009 will also go down in history as the year that China overtook Japan to become the world’s second largest ATM market, behind the USA – Japan and the USA have been the two largest ATM markets since 1972, thirteen years prior to China even installing its first ATM.
China ATM Installed Base, 2005-2009
The new report explains that one of the major contributors to the Chinese growth has been the transformation of the bank branch from a mere transaction point to a service outlet, thereby stepping up the pressure to migrate basic transactions to self-service. Moreover, the density of ATMs to population and branches remains relatively low in China, leaving plenty of scope for yet further growth.
In addition to the continued role played by China’s “Big Four” state-owned banks in driving growth, another sector of the Chinese ATM market has gained in significance in recent years: ATM Outsourcing Service Providers (AOSPs). ATM deployment and operation are subject to strict governmental regulation in China, and non-banks are not allowed to deploy terminals without a bank’s involvement (and only under a bank’s branding). To address these requirements a “co-operative deployment model” has evolved whereby banks outsource ATM deployment to AOSPs, and pay them a service fee and a share of transaction fee income. This segment has grown relatively recently, but already accounts for nearly 10% of the ATMs in the country.
As well as experiencing rapid growth, the Chinese ATM market is becoming more sophisticated, although the provision of facilities still varies widely. The situation is complicated by the fact that new transaction types are not always uniformly introduced across bank fleets. ATM functionality is particularly impressive in terms of deposit automation, although a lack of clear regulation pertaining to the use of this technology continues to inhibit some deployers from activating the recycling capability at their machines.
These figures and insights are based on a new study, “ATMs in China 2010”, the most detailed analysis ever published of the Chinese ATM market. For more information please visit www.rbrlondon.com/reports/china.
