Diebold Inc, one of the biggest makers of automated teller machines (ATMs) in the world, said it would strive for better service and increased security this year, rather than more products.

The new objective is an attempt to combat fierce competition from foreign banks.

"Compared with our major rivals, security and quality service is our striking advantage," said Daniel Hu, managing director of Diebold China. "Bank customers want convenient, comfortable and safe service, but security remains their primary concern."

By the end of 2004, Diebold had grabbed more than 30 per cent of the market, making it one of the biggest players among 20 market contenders in China. The other major players are US-based NCR and German-based Wincor Nixdorf.

"After China's entry into the World Trade Organization, Chinese banks have to get better prepared for more fierce competition from foreign banks and quality service will be one of the key factors," said Hu.

One of Diebold's focuses for 2006 is helping banks transform their branches in attempt to make their services more competitive.

China Merchants Bank's Shenzhen branch recently launched a "Diebold Wealth Management Channel." The Fuzhou branch of Industrial and Commercial Bank of China (ICBC) also set up a wealth management centre with the self-service business from Diebold.

Setting up an upgraded ATM channel is what Hu calls "a competitive weapon" to reach more customers in a quick and low-cost way, Hu said.

Statistics indicate that the Chinese own about 40 ATMs per 1 million people, compared with more than 1,000 machines per 1 million people owned in countries like the United States.

"There is huge market potential," Hu added.

The Beijing 2008 Olympics and the 2010 World Exposition are increasing demand from Chinese banks for efficient and reliable equipment to compete with international counterparts.

With service centers covering more than 40 cities in China, Diebold has signed some big deals with China's major banks,

Last December, the company signed a multi-million dollar agreement with the Bank of China to provide it with 642 Opteva ATMs.

It also launched a special Website for ATM security service, the first of its kind in the world.

(China Daily 01/06/2006 page10)