booming, with the number of terminals set to reach 230,000 by 2010,
according to recent research. US-based ATM manufacturer Diebold has
just received another Chinese order, this time from Agricultural
Bank of China, adding to recent deals from Bank of China and ICBC.
Dan Jones reports.
State-owned Agricultural Bank of China (ABC), China’s
fourth-largest banking group, has become the latest Chinese
institution to sign an agreement with Diebold, the US ATM
manufacturer, as the bank looks to play catch-up with domestic
competitors whose ATM networks have expanded rapidly in recent
years. Diebold will supply ABC with 1,400 Opteva ATMs and Bulk Cash
Recyclers, helping ABC diversify the bank’s offering away from its
31,000 domestic branches and banking offices.
Go deeper with GlobalData
China’s geographic sprawl and large rural population, coupled with
its burgeoning financial services sector, have focused attention on
the ATM as a vital distribution tool. Manufacturers such as Diebold
have been able to corner a significant chunk of the market; along
with ABC, the firm has secured deals with Bank of China, the Postal
Savings Bank of China, Industrial and Commercial Bank of China and
China Construction Bank over the past year.
A recent report from Boston-based consultancy Celent predicted that
ATM growth in the country will be around 20 percent a year until
2010, pushing the number of ATMs from an estimated 102,000 at
end-2006 to 230,000 by 2010. Technological developments are also
expected to be leveraged in order to target the unbanked and
underbanked market. “In addition to regular ATMs, [markets such as
China] will witness high growth in innovative technologies such as
biometric ATMs that cater to the large and underbanked rural
population,” said Sandeep Hebbar, Celent analyst and report
co-author.
ABC’s expanded self-service facilities will enable customers to
make deposits without the need for a banking card, seen as helping
promote ABC’s service among Chinese farmers and agricultural
workers, who will now be able to simply transfer funds without
needing to visit an often-inaccessible branch office.
Diebold announced in January that it had sold more than 6,000
Opteva units to Chinese banks in the six months since July 2007,
though other market opportunities are also being explored. In
September 2007, the manufacturer agreed a deal with Sinopec,
China’s largest petrochemical company, which will see Diebold make
use of Sinopec’s 268 petrol stations in Beijing to better provide
off-premise services in the Chinese capital, with a view to further
expansion. Such agreements with petrochemical firms was a central
recommendation made by the Celent report, which also pointed to
m-banking, an offering increasingly being deployed by Indian banks
(see Dial M for Money), as a driver of future growth in
rural regions.
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By GlobalData“Because Sinopec owns nearly 30,000 fuel stations throughout China,
it is also an excellent opportunity for banks to leverage this huge
network, increase revenue and expand consumer touch points via
high-quality, around-the-clock ATM services,” said Daniel Hu,
Diebold vice-president and managing director, North Asia and
China.
But Diebold faces competition from both domestic and foreign
rivals. Wincor Nixdorf tripled the size of its existing Chinese
production facility in 2007 with the aim of “vastly expanding” its
market position over the coming years. Meanwhile, China’s largest
domestic ATM manufacturer, GRG Banking, posted a 157 percent
increase in net income for fiscal 2007, and has secured three
separate contracts with Bank of China alone in the past six
months.
