CEE ATM Market Grows 24% in 2006

Following growth of 27% in 2005, the central and eastern European ATM market expanded by 24% in 2006, reaching a total of 89,700 installations.

Retail Banking Research has just published ‘ATMs and Cash Dispensers Central and Eastern Europe 2007’. Already well established as the most comprehensive analysis of ATMs in the CEE region, two new countries, Belarus and Kazakhstan, have been added to this year’s research. Key findings from the new study, which now covers 15 countries, include:

• Central and eastern Europe (CEE) approaches 90,000 ATMs
• Deployers in Russia and the Ukraine install greatest number of new ATMs in 2006
• 59% of CEE ATMs installed off-site
• Average cash withdrawal increases to €90
• NCR remains largest ATM manufacturer in CEE
• Windows XP replaces NT as most common ATM operating system
• Cash replenishment is outsourced for just over a quarter of CEE ATMs

Central and eastern Europe approaches 90,000 ATMs

• In 2006 the number of cash-dispensing ATMs in CEE grew by 24%. Deployers in the region installed more than 17,600 new ATMs during the year, making CEE the second fastest growing ATM market in the world, behind the Middle East and Africa.
• The number of ATMs in CEE reached 89,695 at the end of 2006. Despite the high rate of growth, the region accounts for just 6% of the world ATM base.
• Russia, CEE’s largest market, now has 36,615 ATMs, a 32% increase on the 2005 figure. The Ukraine has been in second place since 2004, now with an installed base of 13,744 terminals. Between 1998 and 2002, Poland was the region’s largest ATM market, but it has now fallen to third place with 9,960 installations.
• Russia, the Ukraine and Poland represent two thirds of the region’s ATMs. Together with Romania and Bulgaria, these countries accounted for 87% of all new ATM installations in CEE in 2006.

CEE ATM Installed Base, 2002-2006

Deployers in Russia and the Ukraine install greatest number of new ATMs in 2006

• For the sixth year running, Russia witnessed the greatest absolute growth in its ATM base – deployers added more than 8,800 new  installations in 2006, over half the growth for the entire region. Ukrainian deployers installed nearly 3,200 new ATMs during the year.
• These high growth rates follow large increases in the number of cards issued in both Russia and the Ukraine. As cash withdrawals remain the dominant type of transaction, deployers are keen to ensure adequate ATM provision for their customers.
• Poland and Romania were the only other CEE markets where deployers installed more than 1,000 new ATMs in 2006. A combination of improved economic conditions, increased competition following EU accession and growing foreign investment have boosted growth in these markets.
• At 39%, the Romanian ATM market recorded the region’s highest percentage growth, in large part due to the expansion of bank branch networks. Russia, Kazakhstan and the Ukraine also saw high growth rates, of between 29% and 32% each.
• The Slovenian ATM market saw the lowest rate of growth, expanding by a mere 3%, equal to just 40 new installations. In 2005, Latvia was the only ATM market in CEE to shrink; in 2006, however, growth picked up again (to 11%) as a result of increased competition following the entry of new deployers.

59% of CEE ATMs installed off-site

• ATM deployers in 14 of the 15 countries surveyed prefer to install their machines off-site (i.e. away from the bank branch). Poland is the only exception, where the preferred location for ATMs is through the exterior wall of the bank branch.
• The share of off-site ATMs increased from 56% to 59% of the CEE installed base. At 75%, Estonia has the highest such share, followed by Kazakhstan, Slovenia and Russia, which have between 65% and 69% of their ATMs located away from the bank branch.

Average cash withdrawal increases to €90

• Over 3 billion cash withdrawals were made at CEE ATMs in 2006, an increase of 24% over the previous year.
• Nearly two thirds of these cash withdrawals were made at ATMs in the 3 largest markets. Russia’s 980 million cash withdrawals alone represent nearly a third of the regional total. The total volume of cash withdrawals in Russia and the Ukraine increased by more than 50% in 2006 compared to the previous year.
• Average ATM usage in the region peaked at 2,930 cash withdrawals per terminal per month in 2004, before falling as the increase in usage has not kept up with the expansion of the installed base. In 2006, there were on average 2,836 cash withdrawals per terminal per month, the lowest for five years.
• Belarusian ATMs recorded the highest average usage, with more than 6,500 cash withdrawals per machine per month, followed by Estonia with just under 5,900.
• A total of €275 billion was withdrawn from CEE ATMs during 2006, a 51% increase compared to the year before.
• Average cash withdrawal values per country differ widely due to the varying strengths of the local currencies and diverse banking habits. The highest average cash withdrawal value is €123 in the Czech Republic and Hungary; the lowest is €43 in the Ukraine.

Average Cash Withdrawal Volumes and Values at CEE ATMs, 2002-2006

NCR remains largest ATM manufacturer in CEE

• NCR is still the leading ATM supplier to the CEE region, with a market share of 44%, very slightly lower than the corresponding figure for 2005. Although this is less than the 50% market share it held at the end of the last decade, NCR still accounts for at least a quarter of ATMs in all of the countries surveyed apart from Kazakhstan.
• Wincor Nixdorf is the second largest ATM manufacturer in CEE with a 30% share, also very slightly lower than the 2005 figure. Nevertheless, Wincor has seen its share of the CEE ATM base rise from just 12% at the turn of the century.
• From 35% at the end of the last decade, Diebold’s market share of the CEE ATM market has fallen to 22%. It is, nevertheless, the leading ATM supplier to Croatia and Kazakhstan.

Manufacturer Market Shares of CEE Installed Base, 2006

Windows XP replaces NT as most common ATM operating system

• Many of the most interesting current ATM developments relate to software. The increase in use of Windows, TCP/IP and remote software distribution allow ATMs to take advantage of advances in internet technology, open platforms and multivendor software.
• In 2006, Windows XP overtook Windows NT as the preferred ATM operating system in the CEE region. 71% of the region’s ATMs operate over either Windows XP or NT, up from 59% in 2005. OS/2 continues to decline in popularity – its share fell by nine percentage points to 27% of the market in 2006.
• TCP/IP further extended its lead over x.25 during the year. It is now the most popular ATM communications protocol in the region, and saw its share rise by more than 10 percentage points to 74%. TCP/IP is the preferred communications protocol for ATMs in 12 of the 15 CEE ATM markets.
• 41% of CEE ATMs use open platforms over a CEN XFS base layer, up from 32% in 2005.

Cash replenishment is outsourced for just over a quarter of CEE ATMs

• When ATMs run out of cash, someone needs to refill them. Some deployers have their own staff for this purpose, others prefer to outsource it to third parties. In CEE cash replenishment is outsourced for just over a quarter of ATMs. Estonia is the only country where cash replenishment is handled by third parties for all bank branch-based ATMs. In only two other countries is this proportion over 50%: the Czech Republic and Latvia.
• In many countries, for example in Belarus, Russia and the Ukraine, the cash replenishment of branch ATMs is done in-house by dedicated security departments.
• The level of outsourcing of first line maintenance (which comprises simple ATM repairs) is relatively low (42%) and is more common for off-site ATMs than branch installations. Belarus, Croatia, the Czech Republic and Slovakia outsource first line maintenance for over 90% of their off-site ATMs.
• Second line maintenance (which comprises more serious ATM repairs) is outsourced for 95% of CEE branch ATMs. The proportion for off-site machines is slightly lower, at 92%. In 9 of the 15 countries, it is outsourced for all ATMs, both branch-based and off-site.

Notes to editors

This information draws on RBR’s most recent analysis of central and eastern European ATM deployment ATMs and Cash Dispensers Central and Eastern Europe 2007. The report provides the ATM industry with its most detailed and reliable country-by-country analysis of 15 central and eastern European markets, comprising over 600 pages and more than 650 tables and charts.

The following countries are covered in the report: Belarus, Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Kazakhstan, Latvia, Lithuania, Poland, Romania, Russia, Slovakia, Slovenia and the Ukraine.

The information in ATMs and Cash Dispensers Central and Eastern Europe 2007 is not available from any other source. The report is available in electronic and printed format from Retail Banking Research Ltd.

For more information, please visit www.rbrlondon.com or contact Mark Glover on +44 (20) 8940 1398 or mark@rbrlondon.com.

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

About RBR

Retail Banking Research (RBR) is a strategic research and consulting firm with close to three decades of experience in retail banking, banking automation and payment systems. RBR 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. Banking Automation Bulletin, a research newsletter founded in 1979, is published 12 times per year by RBR.

Other strategic market research reports published by RBR include:

• ATMs and Cash Dispensers Western Europe 2007
• Off-Site ATMs Europe – Third Edition
• Global ATM Market and Forecasts to 2011
• Deposit Automation
• Teller Assist Units
• Payment Cards Western Europe
• Payment Cards Central and Eastern Europe
• Merchant Acquiring in Europe
• Interchange Fees 

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