The Dragon and Tiger of the ATM Markets: China and India

by Wenli Yuan, November 26, 2007


Beijing, China Bangalore, India 26 November 2007

The ATM markets in China and India have experienced explosive growth over the past five years. The next three to five years will see an even greater increase from about 125,000 ATMs in 2006 to 350,000 ATMs by 2010.

While traditional ATM markets are on the decline, overseas markets are rapidly becoming attractive venues of growth. They are the destinations of choice for ATM industry players seeking to sustain profitability levels. In particular, the rapid development of banking and financial services in both China and India represents a significant opportunity for ATM growth.

In a new report, , Celent describes how retail banking across both countries has grown exponentially as consumers' buying power has risen, increasing the demand for more flexible and convenient access to bank distribution channels. With fairly large proportions of the population being either unbanked or underbanked, particularly in India, and with low branch density per capita in both countries, financial institutions face pressure to expand their retail distribution capabilities to meet growing demand. Given the extremely low penetration levels of ATMs in both China and India, better leveraging this cost-effective self-service distribution channel represents a key opportunity for meeting this challenge. 

Spurred by the high growth and competitiveness of the banking industries in both countries, ATM installations have seen double-digit growth in each of the past five years. Celent predicts that the best is yet to come. The next three to five years will see even higher growth in these two countries from about 125,000 ATMs in 2006 to 350,000 ATMs by 2010.

"Like India, China is experiencing rapid growth in ATMs, driven by its largely cash-based society, the low density of bank branches at a time when demand for financial services is accelerating rapidly, and the need to more aggressively deploy ATMs beyond the largest metropolitan centres to midsize and small cities and suburban regions," says Wenli Yuan, Celent senior analyst and coauthor of the report.

"In addition to regular ATMs, these markets will witness high growth in innovative technologies such as biometric ATMs that cater to the large and underbanked rural population of both countries," says Sandeep Hebbar, Celent analyst and coauthor of the report.

The 34-page report contains 29 figures. A table of contents is available online.

Members of Celent's Retail Banking research service can download the report electronically by clicking on the icon to the left.  Non-members should contact for more information.  

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].

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Table of Contents

Beijing, China Bangalore, India 26 November 2007

Executive Summary 03
Introduction 05
  China and India on the Rise 06
  Drivers of Growth 08
China 14
  Overview of Consumer Payments 14
  The Banking Network 16
  Rapid ATM Growth 17
  ATM Market Share by Bank 18
  The Rise of Cards 19
  ATM Usage Patterns 21
  Preferred Delivery and Ownership Model 21
  Rural ATM Networks 22
India 24
  The Banking Network 24
  Rapid ATM Growth 24
  ATM Market Share by Bank 26
  The Rise of Cards 28
  ATM Usage Patterns 29
  Fees Structure and Cost of Ownership 31
  Unique Market Characteristics -  Rural ATM Networks 31
Conclusions 32
Looking Ahead 33


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