How GRG survives in China ATM market US... · KFC is already quite localized in China Consumption habits have changed. ... E-banking Terminal VIP Room Private Bank Estimated Cost

How GRG survives in China ATM market

Experience from China

GRGBanking Equipment Co., Ltd.www.GRGBanking.com Tel: +86-20-6287 8545

Mark YipManaging Director of GRGBanking

Business Contact: Buddy Xu, Marketing [email protected]

GRGBanking · we move faster

Strategies of Chinese Banks

GRG Philosophy towards the Challenges

Challenges of ATM Market in China

Agenda


33094 39957 48966 60000 68000 82000 98000127600

167500214900

271000

333900

415600

520000

614900

730000

780000

25.2%

20.7%22.5% 22.5%

13.3%

20.6%19.5%

30.2%31.3%

28.3%26.1%

23.2%24.5%

25.1%

18.3% 18.7%

6.8%

0.0

800000.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

ATM quantity growth in the past 16 years in China

total installation

growth rate

• Fast growing 30 years of ATM in China: 1987 - 2017.• Annual Growth Rate in most of the years: 20% to 30%.• Growth Rate in 2016, dropped sharply and suddenly to 6.8%.

数据来源：人民银行

Have high speed growth stopped?Or will it come back again?

Data Source in this PPT：People’s Bank of China, Finance Times, RBR, Banks Statistics, GRG Researches

30%

20%

6.8%


68009000

11000 11100 1370017400

33800

5500059500

61000

75000

100741

85642

97153

113076

75153

0.00

30000.00

60000.00

90000.00

120000.00

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

ATM purchase quantity in every year since 2001

Purchase quantity in 2016 was only 75,200 units, dropped more than 30% compare to the 113,000units in 2015.

ATM purchase quantity in 2016 dropped back to 2011


ATM dispenser and recycler both declined

Total purchase quantity of dispenser and recycler dropped down by 33.5% (2016 to 2015)Dispenser: dropped down by 50.5%Recycler: dropped down by 29.3%


Cash recycler dominates ATM market

Recycler market share in 2016 had grown up to 85%, and some banks buy only recyclers now.

39630 39917

32391

2703722696

11242

35370

60824

53251

70116

90380

63911

0.00

25000.00

50000.00

75000.00

100000.00

2011 2012 2013 2014 2015 2016

Dispenser

Recycler

47%

60% 62%

72%80%

85%

Recycler Portion


21.5%

17.4%

12.9%14.4%

11.5%

5.6% 5.5%

23.3%

18.4%

12.9%

9.2% 9.2%

5.9%4.6%

29.5%

9.4%

16.6%

1.3%3.7%

2.5%0.7%

0.0%

7.5%

15.0%

22.5%

30.0%

37.5%

GRGBanking Hitachi YH NCR Diebold OKI Wincor-Nixdolf

Market share change of different ATM brands in China

2010 2013 2016

Local manufacturers took over the market

During the past 10 years, the market share of major ATM brands changed rapidly and the local brands increased very quickly.To be localized to survive.


What is behind the declining of the numbers?Quantitive change leads to qualitative change

ChangeExpectation to the future

ChangeTraditional channel

to Omni Channel

Cost Profitability

Efficiency

MIND

CHANGE

ChangeFintech competition


Almost all the daily payment can be done online and by mobile.

Consumption habits have changed

Alipay and Wechat pay

Profound industrial background changes



QR Code scanner

Bus ticket


Consumption habits have changedMetro station entrance

Quick pass with mobile Long queue waiting in front of ticket machine


Consumption habits have changedBook a taxi and pay on mobile

Uber and Didi Taxi Wechat pay for taxi


Payment at restaurants

KFC is already quite localized in China



In super-markets

This is common in most of the super-markets in China



At a fruit stand

Alipay is recommended



During the Chinese Spring Festival 2017

420 Millionpeople sent

46 Billion Lucky money pocketsthrough Wechet

A Chinese lucky money with a lucky amount



Even here

If by chance you don’t have any cash with you,

I also accept Alipay.




Profound industrial background changesE-payment and M-payment increasing

Trillion CNY


Profound industrial background changes

Alibaba one-day sales on Nov. 11 2016USD 17.8 BillionSurpass 1 month Amazon sales

Incredible E-commerce in China

million CNY


e-Commerce

Online

search

Social

media

Ad

union

IM

payment

Security

Financial

servicesEntertainment

Smart devices

O2O

ads

Yu’e Bao: AuM

$93+ billion

Sesame Credit: credit score for

300+ million

Alipay: 800+ million Number of

registered accounts

Ant Micro Loans: SME loans $12+

billion

WeBank: Total loan credit line for SMEs:

$300+ million

WeChat: Social and mobile wallet app with

650+ million monthly active users

Profound industrial background changesFintech in China


Recent developmentsATM new functions

Finger vein identification instead of signature

Finger vein module equipped ATM for anti-fraud

Finger Vein

Self Remote Sorting and Settlement

Biometrics Identification for Cardless withdrawal

Serial Number Recognition and Recoding


Digital currency and Blockchain

People’s Bank Of China

(PBOC) set up Digital Currency Task Force, Research Institute.

Digital bill management system based on Blockchain technology was successfully applied.

Lately happened


What we believeChange in time is the only way to survive

ATM high speed growth era ended.

Banks need to change to suit the new situation.

ATM manufacturers also need to change together with the banks proactively and quickly.

The circulation of the cash is decreasing.However, cash will not disappear.

If banks don’t change themselves, we will

change them.

Jack Ma

President of Alibaba Group






Agenda


Strategies of banks


More branch intelligent machines to reduce the HR and TCO

Need quick response to the new technologies

Full function ATM and cost effective solution

ATM manufacturers need to be localized enough to provide localized solution, customized products and comprehensive services


Categorized branches for different functions

2

1

3

Flagship branch

Comprehensive branch

Compact branch Individual basic retail service

Comprehensive standard service corporation business service

China Construction Bank experience

Financial product, wealth management service, VIP service

+

+


Configuration Flagship branch Comprehensive branch Compact branch

ATM

TAU

Queuing Machine

Multimedia Screen

E-banking Terminal

VIP Room

Private Bank

Estimated Cost 20 Million 6 Million 1 Million

Different kind of branch with different configurationChina Construction Bank experience


Flagship branch

Fully equipped with ATM, TAU, Queuing machine and all kinds of terminals and multimedia screens.

Provides interactive and intelligent financial services.



Comprehensive branch

Branch intelligence and self service machine to reduce the work load of the branch teller



Compact branch

Self service machine to provide fast service without teller assistance onsite.



ATM outsourcing in plan

• As a traditional banking service channel, ATM is becoming a burden rather than a channel.

• Cost of ATM maintenance, management and CIT is expensive.

• A professional company to provide ATM maintenance, centralized management and CIT is the trend.





Agenda


Annual output: 40,000 ATMsGlobal installation 220,000 ATMs

Manufacturing center to total solution and service provider

Hardware & Software

ATM

VTM

Sorting Machine

AFC

Branch Intelligence

Biometrics & Security


Service Station: 900+Technical Engineer: 6,000+CIT Company: 23CIT Employee: 7000+

Solution & Service

Branch Transformation

ATM Maintenance

ATM Monitoring

ATM Networking

CIT

Vault Cash Sorting

Manufacturing center to total solution and service provider



GRG philosophy - Localization and Win-win cooperation


Localization Local entities and partners for sales, service, development and production

Cooperation Sales

Joint Venture and more flexible partnership globally

• Distribution• OEM

Service

• Service Partner

Development

• ODM• Local Software

Partner

• Local Factory

Production

Capital Investment


Thank you！for more information: www.grgbanking.com booth:220/222

Business Contact: Buddy Xu, Marketing [email protected]

Documents

How GRG survives in China ATM market US... · KFC is already quite localized in China Consumption habits have changed. ... E-banking Terminal VIP Room Private Bank Estimated Cost