A senior analyst at Ovum, says the cashless society will not become a reality in the foreseeable future.
Quoting figures from the European Central Bank, which says the number of banknotes from the Eurozone is rising by around 9 per cent per year, Ovum senior analyst, Jaroslaw Knapik, said: “While there are continuing predictions about the declining use of cash, and forms of payment that could take over, the majority of retail transactions are still being settled with cash.
“There are also over 40 per cent more US dollar bills available compared to the beginning of the millennium.”
Given the fact that most cash is being distributed by ATMs, Knapik says this channel is expected to grow further. He said: “Asia Pacific is the fastest growing market and accounts for over 40 per cent of global ATM hardware shipments.”
Ovum believes competitive banks need to maintain or expand their ATM channels with a strong focus on efficiency, as the current focus on economic uncertainty is still a strong inhibitor to growth.
“The growing cost of managing the ATM channel is driving further technology investments, with the major focus being on lowering the cost base. Banks need to look at cost-efficient management of the ATM channel through integration of the various service components”, said Knapik.
While existing overall ATM models are functioning reasonably well, Ovum believes there is still a huge opportunity for increased efficiency through integration of the support model (sub-contract field engineers, CIT, telecommunications), more accurate resource management of the network peak times and optimisation of hardware replacement strategy – essentially creating a centre of excellence for the entire ATM channel management under one umbrella. Ovum expects this trend to accelerate in the coming years.
“Given the fact that vendors able to provide integrated services are emerging, such a reengineering of processes and the underlying infrastructure is becoming much more feasible to manage”, said Knapik.