CARDS & PAYMENTS | Staff Reporter, Singapore

Powering up a new breed of ATMs in Asia

NCR, Trend Micro, and Diebold talk about ATMs leaping forward in functionality.

When global ATM provider NCR thought of creating a better generation of ATMs suited for the modern Asian customer, what came to mind were three words: faster, smoother, safer. ATM users in the region are starting to choose their preferred banks based on how well they perform in these three key areas of speed, efficiency and security of transactions – and the industry is embracing the challenge by exploring a swathe of smart technology.

“It is evident that automation, convenience and security are some of the key features consumers expect from ATM transactions today,” says Yiannos Papadopoulos, regional vice president for Asia Pacific at NCR. “It becomes imperative for financial institutions to meet these demands to make customers remain loyal.”

Facing a shift in preferences and behavior among Asian ATM users, NCR developed a new ecosystem called NCR Kalpana from which banks and other financial institutions could make machines that shine on these three fronts. The problem for banks is that upgrading their ATMs can be a slow and expensive process especially for those operating hundreds of machines.

In this regard, Papadopoulos says NCR Kalpana is a “game-changer” because it enables banks to deploy new ATMs in a fraction of the usual time, and is packed with the advanced security features that Asian users now come to expect.

“Services for consumers can take months or even years to bring to market as operators navigate through a myriad of vendors, including processors, switches, ATM vendors, regulators and software makers. NCR Kalpana can introduce new services at twice the speed of today,” he says.

“Kalpana enables flexible rapid deployments so banks can dramatically reduce costs and gain more freedom and choice. Its ground-breaking security model is designed to eliminate malware and offers the world’s first ATM security certification to PCI 4.0,” adds Papadopoulos.

Papadopoulos says Asian ATM users have become wealthier and very impatient, pushing banks towards full automation and self-service systems. Users want transactions completed almost instantaneously, and request for an array of services to be available in ATMs such as bank account opening and video tellers that assist virtually.

“Traditional banking services, which could typically require several tellers performing a host of transactions that vary from opening a new account to depositing cash, are now moving towards becoming completely automated,” says Phillip Bedford, marketing director, Asia Pacific at Diebold.

“The staff don’t even need to physically be in the branch. Instead, bank personnel can provide two-way communication through a video teller, which is similar to a Skype experience. These sorts of traditional banking services, which used to take days or weeks, now take only minutes,” he adds.

The growing demands for convenience and accessibility are two factors that are heavily shaping the future of ATMs, says David Siah, country manager, Singapore at Trend Micro. “International banks and financial institutions have been innovating to meet these increasing needs by setting up internet-enabled services such as mobile cash withdrawals, and moving the entire ATM networks onto the cloud,” he says.

Security threats
As more ATM systems and transactions take place online, these systems are becoming juicier targets for hackers. This has made combatting cyber security a primary consideration for newer ATMs.

“In recent years, there has been a rise of hackers capitalising on terminals such as mobile banking apps, ATMs, and online banking sites, to get around the existing system; after all, the attack is always aimed at where the money is,” says Siah.

“There are many ways a hacker could hijack an ATM. One common way of attack is via skimmers–devices that steal the data encoded on the magnetic strips of ATM cards,” he adds. Siah reckons another major concern for Asian ATM systems is malware, and countries like Malaysia have seen this issue come to the fore. He says that with around 90% of ATMs currently running on Windows, they are as highly vulnerable to malware as any ordinary computer.

“Just last year, 14 ATMs in Malaysia were attacked by a Latin America organised crime gang that embezzled approximately RM3 million (US$1 million). The gang hacked ATMs that utilised old operating systems by installing malware that exploited flaws in the authentication process,” says Siah.

“In addition, it was found that the malware (BKDR_PADPIN.A) could be manipulated to spew cash from selected ATMs, display information such as total amount stored and cash unit information, and could uninstall itself and dis-enable network connections between the ATM and banks,” he adds.
Siah attributes the increasing vulnerability of ATMs to the rapid rollout of such machines in Asia, giving potential attackers more avenues to perpetrate their crimes.

“In many markets in Asia, including Hong Kong and mainland China, the use of ATMs is on the rise as cities quickly scale up their banking infrastructure and install ATMs at almost every street corner to serve the growing demand. As more services that make withdrawing money from and storing money in ATMs easier for both consumers and banks are offered, the industry exposes itself to more potential cyber-attacks,” says Siah.

In fighting back, ATM makers are ramping up their security protocols, and Siah says it is highly probable that the industry could soon see sophisticated versions that requires reading off a QR code rather than a card for increased protection. Some ATMs are even starting to use iris scanning and other types of biometrics technology for transaction authentication.

Personalised experience
Financial institutions can use technology to create slick ATM features, but it is even better if these same features work together to deliver a more personalised experience than traditional ATMs and branch tellers.

“Consumers in Asia are looking for a personalised banking experience and financial institutions want to deliver tailored products and services that meet those expectations,” says Bedford.

As an example, Bedford says financial institutions can customise ATM user interfaces so that consumers can select and set their favourite options when conducting everyday ATM transactions. They can also provide an alphabetised screen instead of the usual numeric screen so users can easily perform advanced transactions on ATMs.

Many Asian users are not only making simple cash withdrawals via ATMs, but also advanced transactions such as opening an account or claiming a debit card. Bedford reckons consumers can even use their mobile phone to pre-stage a transaction and gain instant access to cash without using a debit card at all.

Technology and the customer
As ATM transactions become more complex, banks and other financial institutions are starting to analyse big data to identify what customised options they can start offering to clients. “When a consumer is at an ATM located within a branch, the staff have real-time access to that person’s data via a tablet which enables them to offer a product or service that is tailored to that particular individual. They can even make approvals, if required,” says Bedford.

ATM systems can benefit greatly from the current leaps in technology, but banks can only squeeze out the most value from such investments if they leave a memorable impact with customers. “We believe that transactions don’t supersede relationships and we see consumers continuing to use technology to grow strong emotional connections,” says Bedford.

“To ensure long-term success and to keep consumers happy, financial institutions must integrate the physical and the digital to create consistent, effortless and channel-less experiences – whether consumers are at home, on the go, or in the branch.”

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