In the cash-friendly UAE, banks are adding 200 ATMs a year

Cash, so the adage goes, is king. And this is especially true in the Middle East.

According to MasterCard’s most recent Cashless Journey study, despite the growth in electronic payments in Middle East markets, 85 to 90 per cent of retail transactions are still being conducted by cash and cheques – almost double the US figure, where cash and cheque payments account for 47 per cent of all transactions, according to figures that the Federal Reserve released last year.

As a result, there continues to be a growing need for ATMs in the region – which is in turn fuelling the growth of the ATM market.


Internet and mobile have also surged in popularity – in particular across the GCC. This is changing consumer behaviour in these markets, and these consumers are increasingly looking for more sophisticated banking experiences – forcing banks to innovate to create unique customer experiences.

In the UAE, to use just one example, the ATM industry has come a long way since Mashreq deployed its first ATM machine in 1983. More than 30 per cent of all ATMs now support cardless cash withdrawals, a feature that is particularly popular among the young tech-savvy segment of the population.

And in 2013, Emirates NBD launched an Interactive Teller Machine, a feature that allows customers to interact with a ­human teller using video technology.

With new added features such as automated deposit functionality, banks are increasingly able to provide services to customers for which a branch would have been needed. The priority for banks now appears to be the expansion and optimisation of their ATM fleets, as opposed to the operation and introduction of new bank branches – a cost-effective pol­icy that also enables them to target non-account holders.

Expo 2020, rapidly approaching, will also fuel the growth of the ATM industry. The Central Bank of the UAE, as well as the country’s various banks, will want to ensure that ATMs are available for the flood of tourists and visitors. As a result, ATMs will be avail­able in locations that are not currently provisioned for.

The installed base in the UAE is expected to reach 6,300 ­machines by 2020, with about 200 installations per year on average. Functionality is expected to increase, with NFC-based cardless cash withdrawals expected to become more widespread, in addition to mobile phone to pre-stage transactions and biometric authentication.

Nonetheless, despite the vast growth potential of ATMs in the country, branch banking will continue to play a critical role in the overall channel strategy, with many financial institutions repositioning their branches as destinations primarily vis­ited by consumers for complex transactions, product sale completion and advice. By shrinking the physical footprint of the branch, adopting a sales attitude and evolving the branch network to align with growing digital consumer habits, the branch channel will continue to play a key role in expanding customer wallet share, driving new revenue streams and supporting a positive return on investment.

In the context of our own company, NCR will continue to develop interactive services such as these and introduce them in the UAE and region. Last year, for example, Emirates NBD mig­rated all of its ATM terminals to NCR’s Aptra Activate application software, allowing the bank to introduce new functionalities such as cardless ATM transactions, cash recycling, bio­metrics and document scanning.

There will be challenges, to be sure. But while it is still predominantly a cash-based society, omnichannel solutions such as ours bode well for the country, and the wider region. Technology developments in the ATM banking ecosystem will allow more flexibility, greater efficiency and more security and safety – driving growth across the sector.

George Flouros is the regional vice president for financial services in India the Middle East and Africa at NCR, which builds consumer transaction technologies

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