RBR’s latest global ATM survey has revealed how different European countries approach ATM cash replenishment. The study, Global ATM Market and Forecasts to 2023, shows how central Europe increasingly resembles western Europe, while eastern Europe – Russia and its neighbouring states – retains a distinctive character shaped by historical practices and regulation. Within western Europe, distinctive practices can also be observed in the north and the south.
Western Europe: a north-south divide
RBR’s study shows that in most of western Europe, it is still common for bank staff to refill branch ATMs. This arrangement makes sense in large branches where workers are trained for such tasks, but is not always suitable for smaller branches with limited staff numbers. ATMs in the branch interior are usually straightforward for bank staff to refill, but ATMs installed through the exterior wall face the street, and for security reasons must usually be replenished by third parties. Italy, Denmark, Greece, France and Turkey all have high proportions of through-the-wall machines.
In some western European countries, however, the refilling of most or all branch ATMs is outsourced. In the Netherlands, Sweden, Norway and Finland, nearly all branch ATMs are replenished by private players, while in Germany the proportion is nearly three quarters. In the Mediterranean, figures are much lower with no outsourcing of cash replenishment of branch machines at all in Greece and Spain. This is despite the fact that southern European banks have a share of through-the-wall ATMs which is above the western European average.
UK moving away from outsourcing cash replenishment
Across most of western Europe, non-branch ATMs are routinely refilled by third parties. At the end of 2017, cash replenishment was outsourced for nearly 90,000 off-site ATMs, or almost two thirds of the total.
Cash replenishment is outsourced for all non-branch ATMs in Germany, Ireland, Italy, Portugal and Spain, and in most other western European markets for the vast majority of machines. The main exceptions are the UK and Turkey where around two thirds of off-site ATMs are refilled by the deployer and France where this is the arrangement for a third of remote ATMs.
The UK is the only market that has seen a significant move away from outsourcing – there, the share of ATMs for which cash replenishment is carried out in-house rose from 36% in 2014 to 67% in 2017. This is because the UK market is increasingly IAD-heavy, and these companies tend to keep cash replenishment in-house.
Regulation still an obstacle in eastern Europe
Several eastern European markets are challenging environments for would-be cash replenishment providers. Russia and Ukraine together account for 60% of central and eastern European ATMs; in Russia, cash replenishment outsourcing runs at 48%, and in Ukraine just 11%. In Ukraine, only licensed banks can carry out CIT and cash replenishment services, and this is also true of neighbouring Belarus. The limited outsourcing which does exist in these markets is to other banks, rather than commercial providers.
The same practice of outsourcing to banks still exists in Russia, but now covers less than 10% of the country’s ATMs. State-controlled companies such as Rosinkas and CCCB refill a third of the country’s ATMs, while private-sector providers such as Brink’s and Inkakhran are also active.
Cash replenishment is outsourced for most Polish ATMs
RBR’s research shows that central Europe may be more promising territory for CIT and cash replenishment providers. Poland, which is the second largest market in central and eastern Europe, is a more liberal economy without regulatory barriers, and has seen outsourcing grow fairly quickly in the last five years to 69% of all ATMs in 2017. IADs own nearly half of the country’s ATMs, but unlike British IADs, these companies often outsource cash replenishment rather than carrying it out themselves.
In Croatia, Czechia, Hungary, Slovakia and Slovenia, more than half of ATMs are already refilled by commercial providers. Opportunities remain in these markets, however, as bank staff still replenish more than 11,000 ATMs in these countries. Banks are keen to cut costs, meaning that new outsourcing providers still have chances to prosper if they can price their services competitively.
Opportunities remain for cash replenishment providers
Some eastern European markets will remain difficult for commercial providers to enter, but they may well open up in the future, as Russia already has. Even in central and western Europe, where there are few unexploited markets, the trend is still towards greater outsourcing of cash replenishment, and competition with established players can still open doors for new entrants.