Academic journal article ABA Banking Journal

Protecting Consumer Trust in the ATM

Academic journal article ABA Banking Journal

Protecting Consumer Trust in the ATM

Article excerpt

It has been more than 35 years since the world saw the first transaction processed on a device known as an automated teller machine, or ATM. Today, more customer transactions are processed on ATMs than in branches within the United States banking system (about 14.2 billion at the ATM compared with 13.3 billion in branch). The reasons consumers have so readily and enthusiastically adopted the technology is fairly simple--the ATM gives bank customers unprecedented access to funds without regard to time or place. But an unseemly problem comes along with this convenience. Specifically, the opportunity for new types of fraud and criminal activity targeting the ATM and the people who use them.

Twenty-four hour convenience and trust underpin the key role of the ATM in retail banking strategy. The essential task of protecting the integrity of the channel against the threat of fraud depends on best practice implementation of innovative technology.

For the criminal, there are three primary options: copy the card, steal the card, or go direct for the cash. Of course, to be effective in terms of accessing cash via the ATM, the first two options must also involve theft of the personal identification number (PIN).

Significant global attention has been given to the introduction of the chip card and the impact this will have in offsetting counterfeit fraud and card skimming. The fact is, however, that this has not yet been universally adopted and there remain other, in some instances less sophisticated, frauds that are equally prevalent.

Fraud migration is a fact of life, both in terms of modus operandi and geography. As witnessed in France, when chip technology is introduced, counterfeit fraud migrates to those neighboring countries that are slow in moving to this technology. …

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