Smart ATM Deposit Gains Popularity with Banks and Customers

Banks are turning to automated deposit to reduce the cost of branch operations.

The number of ATMs that allow customers to make real-time cash deposits in continuing to increase, according to London-based RBR’s Global ATM Market and Forecasts to 2023 report. At the end of 2017, automated note deposit (also known as “smart” or “intelligent” deposit) was available at 1.2 million ATMs worldwide, up by 10 percent compared to a year earlier. The share of ATMs offering this service is also increasing, from 34 percent to 38 percent over the period. This includes both recyclers — machines that dispense the same notes that have been deposited — and less complex devices in which the deposit and dispense modules are completely separate.

Automated deposit is particularly popular among banks that are transforming their branches in a bid to enhance profitability. Deposit ATMs enable banks to reduce costs by encouraging customers to perform everyday cash transactions at self-service terminals rather than over the counter. They also allow deposits with immediate account crediting outside traditional banking hours, a service that is increasingly sought by both retail and business customers.

Automated deposit is most widespread in Asia-Pacific, while Latin America lags behind.

RBR’s report shows that automated deposit is most commonly used in Asia-Pacific, where it is available at more than half of all the region’s ATMs, and it is particularly widespread in China, Japan and South Korea. Western European banks are also keen on automated deposit — a third of all ATMs in the region offer the facility.

By contrast, automated deposit terminals make up less than 30 percent of all ATMs in other regions, according to the research. The share of such ATMs in Latin America is particularly low because many banks in Brazil, the region’s largest market, still offer envelope and not automated deposit. This is starting to change, although still only 1 percent of Brazilian ATMs accept automated note deposits.

Shares of ATMs by Deposit Functionality, 2017

Source: Global ATM Market and Forecasts to 2023 (RBR)

Recycling allows banks to reduce cash transportation costs.

Deployers of automated deposit ATMs are increasingly installing recyclers because of the added efficiency they provide, reducing the frequency with which cash-in-transit companies are needed to refill ATMs. At the end of 2017, almost two thirds of automated deposit ATMs were cash recyclers. As with automated deposit more generally, the share of recyclers is highest in Asia-Pacific, where 79 percent of deposit ATMs redispense deposited banknotes. This was the first region to see recyclers (pioneered by Japan’s OKI), and there is strong demand for these terminals in a number of Asian markets.

Automated deposit will continue to grow as banks look to migrate transaction to self-service.

Banks are expected to continue expanding their fleets of automated deposit terminals, even as the number of ATMs overall begins to shrink slightly. Rowan Berridge, who led RBR’s research project, said, “Banks are increasingly looking to migrate deposit transactions away from the teller, and automated deposit terminals will continue to be a key tool in helping them to do so.”

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