Technavio analysts forecast the global automated teller machine (ATM) slide rails market to grow at a CAGR of 16% during the forecast period, according to their latest report.
The research study covers the present scenario and growth prospects of the global ATM slide rails market for 2016-2020. To calculate the market size, the unit shipments of the slide rails that are installed on a yearly basis in the ATMs have been considered.
Banks are looking for measures to reduce the cost of operations and with the introduction of the image enabled ATMs and self-service cash recycling machines, the banks can recycle and maintain cash automatically. As new cash dispensing machines are available, they not only reduce the overall manpower required by a bank but also help improve the efficiency of banks. With the introduction of such new machines, there has been revised demand for ATMs for a new market as well as for replacement market. Since ATMs are the de-facto end application for ATM slide rails, the demand for the ATM sites directly affects the demand for ATM slide rails.
ATM demand for anytime and anywhere banking
The major driver for the ATM slide rails is the increase in demand for ATMs as an alternative to a bank branch. As the banking industry is growing and there is an increase in demand to address the growing banking-related services and queries, ATMs provide an alternative for such branches. ATMs are a fast way to avail banking facilities and services beyond the normal working hours of a bank. Due to this ATMs are kept inside the bank, off the branch, and at specific locations where there is no requirement for a new branch, and ATM is sufficient to cater to the needs of end-users.
Navin Rajendra, an industry expert in embedded systems at Technavio, says, "With the growing demand from retail customers to avail banking services at convenient time and location, the ATM market is expected to grow. This, in turn, will drive the ATM slide rails market, as ATM slide rails are a key component of the cash withdrawal unit of ATMs."
Dominant role of small value transactions
Cash is a liquid asset, and there is always going to be a strong demand for it. In Americas, ATMs are still the best way for a retail customer to engage in banking services after the bank branch. On the other hand, cash plays an important role as a payment instrument in the small-value transactions. In the US, 75% of the population still uses ATMs as a cash-vending machine. In 2015, 40% of transactions done by the consumers for payment activity used cash as a medium for the transaction, followed by debit cards, which contributed to 25% of the market and credit cards, which contributed 17%. Thus, the ATM market and thus the ATM slide rails market will continue to exist if there is a requirement for cash as a major payment instrument.
Growing demand for cash recycling as an efficient way of cash management
There is an increase in demand for automatic cash recycling at ATMs, automated teller safes, and self-service cash recycling machines. Financial institutions like the banks want to achieve increased revenue growth, improved customer experience, and better cost optimization. There are certain areas, market places which require high cash deposit activity by retail customers, and there are certain market areas that require the frequent withdrawal of cash by retail customers, thus creating demand for frequent replenishment of cash. Such activity leads to a high cost to the bank in terms of labor cost for teller staff and the opportunity cost of keeping the cash in volume at ATM.
"Traditional banking structure involves a teller in a bank, which has to maintain the cash levels. When the cash available is high or low on reaching a certain limit, the teller must sell or buy the cash from the vault. Such a system involves multiple authentications and requires manpower like teller and supervisor," asserts Navin.
Impact of the income and spending power of a country
Different countries have a different number of ATMs per 100,000 adults. Based on the income, economies are classified into four types, i.e., high income, upper middle income, lower middle income, and lower income. For this analysis, 146 countries have been taken and based on the ATMs machines in the region as well as economic regions, the analysis has been done. This is important for the ATM slide rails market as the market for ATM slide rails is directly related to the ATM machines where these slide rails are used.
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SOURCE: Technavio Research
Copyright Business Wire 2016
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