Bank of England highlights the importance of ATMs

A recent speech by Andrew Bailey of the BoE touched on some interesting points. Cash is far from 'dead' as there are still some £45bn in notes in circulation and this number is rising despite the fact that cash is used for 60% of transactions compared to over 80% in the 1980s. This 'paradox' as Mr Bailey describes it is explained by the fact that the public still trusts cash and, given the low interest rates and current economy, see cash as a way to store value. This echoes some research we commissioned last Christmas when we surveyed consumers attitudes to spending. We found that consumers felt most comfortable making Christmas purchases with cash to control their spending, rather than using cards, at a time when budgeting is highly important.

Mr Bailey then went on to talk about the need to get more £5 notes in circulation as there is a high public demand for these.

The speech has some implications for the UK's ATM deployers. ATM withdrawals account for around 70% of cash acquisitions compared with 25% in the 1990s and, as a result, it is now more important than ever to keep this cash dispensing network available. This requires banks to implement extensive testing and monitoring for their ATM networks. Moreover, banks and IADs need to keep a close watch on bill mix combinations, and test these thoroughly, to ensure that demand for £5 notes is satisfied. Mr Bailey’s speech has clearly highlighted the strategic importance of the ATM channel and the visibility that any downtime will attract.

Ian Kerr