The ATM in Japan: Part 1

Trend Toward a Services Model and Modularization
by Eiichiro Yanagawa, May 30, 2012
Asia-Pacific

Abstract

In Japan, the era of ATMs as uniform and unchanging is nearing its end. A new report analyzes vendor trends relating to the modularization of ATM products and services and addresses the unbundling of business models and sourcing models at financial institutions.

New methods of offering ATM services, such as inside convenience stores, are spurring change. This change is empowering financial institutions with strategic options to separate ATMs from their management resources and to outsource them as a new service platform that goes a dimension beyond what can be classified simply as an in-house or external ATM, according to a new report, The ATM in Japan: Part 1: Trend Toward a Services Model and Modularization.

The trends discussed in this report promise to bring a array of change to the procurement and operation of ATMs in Japan. Robust, high quality ATM networks combined with extensive penetration of advanced ATM software and hardware enabling a high degree of operational and maintenance performance have allowed banks to shift from branch-manned teller windows to automated services.

Source: Celent, based on FISC data

“The banking industry is eagerly awaiting proposals for the establishment of new ATM sourcing models that will accommodate the unique and constantly changing business outlooks and technology strategies of individual institutions,” says Eiichiro Yanagawa, Senior Analyst with Celent’s Asian Financial Services group and author of the report. “It is safe to say that Japan has reached an era of competition in the realms of ATM procurement and operations.”

This is the first of two reports covering the current state of ATMs in Japan. This report examines the ATM business environment in Japan by exploring, among other things, the historical background and current state of the market as well as distinguishing attributes of ATM-related systems and services in Japan.

In Part 2, based on this background and current market circumstances, Celent explores three technical trends: hardware modularization, software as a platform, and increasingly service-focused business models. The report addresses the potential of new ATM-related business models that have been thrust into relief by surveys of the latest in ATM fees and business alliances. Finally, Celent considers how ATM sourcing models can be improved.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

3

introduction

4

 

The ATM at 40

4

 

ATM-Related Reports from Celent

4

 

Objective and Conclusions of this Report

5

ATM History

7

 

The Development of the Online Banking System

7

 

The Proliferation and Evolution of ATMs

8

ATM Strategies: Characteristics and Change

10

ATM Market

13

 

Installed Base

13

 

IT Spending Trends and Shared System Adoption in the Banking Industry

15

ATM Networks and Services

21

 

ATM Networks

21

 

Diversification of ATM Services

25

Preview of Part 2

28

Leveraging Celent’s Expertise

29

 

Support for Financial Institutions

29

 

Support for Vendors

29

Related Celent Research

30

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