Automated teller machines (ATM) provide substantial revenue for financial institutions throughout the United States. Unfortunately, the industry is facing a major upheaval centered on antiquated operating systems that may put people’s card or transaction information at risk.
On April 8, 2014, Microsoft stopped providing support for Windows XP, in what’s become a routine strategy aimed at forcing PC owners to upgrade to the company’s latest OS product. While this may prove inconvenient for countless people, it’s a frightening prospect for financial institutions, which rely on Windows XP to operate the vast majority of ATMs. Right now, approximately 95 percent of all ATMs utilize Windows XP, meaning nearly all of these machines could be susceptible to aggressive hacking attacks in the near future.
Why? In simple terms, whenever a hacker finds a hole in one of Windows operating systems, Microsoft is quick to develop patches that prevent the attack. Now that the company is closing the book on XP support, there will be no new patches. This is great news for hackers, who are expected to ramp up attacks in the wake of Microsoft’s decision. For financial institutions, the news will force widespread upgrades and wholesale replacements, meaning extensive overhead related to the inevitable transition.
A Complicated Issue
Most financial institutions aren’t exactly giddy about spending countless dollars on new ATM upgrades, especially since many just completed upgrades and replacements related to recent regulations that forced all ATMs to be compliant with the ADA (American Disability Act). Complicating the issue are the many offshoots of the nation’s jumbled ATM network, which ranges from cash machines in convenience stores to national financial institutions which oversee thousands and thousands of terminals. While advanced fleets can perform OS updates over their networks, older ATMs have to be upgraded one at a time or replaced entirely if their computing power is too weak to handle newer, more demanding software.
Faced with such daunting and expensive tasks, many institutions have been dragging their feet. According to experts, only about 15 percent of ATMs in the U.S. were expected to be upgraded by Microsoft’s April 8th deadline. In turn, some larger institutions are paying Microsoft substantial sums for extended support, while they plan and execute large scale upgrades.
Opportunity in Change
According to experts, most institutions had been hesitant to upgrade ATMs to newer OS systems, because they’d been so satisfied with Windows XP. Now that they have no choice, some are taking the opportunity to implement new technologies that can help ATMs earn more money.
As financial institutions court younger, tech-savvy customers, many are turning to cardless ATMs, which allow users to withdraw money with just a few clicks on their smartphones. City National Bank and Wintrust Bank have plans to introduce this emerging technology by unveiling FIS Cardless Cash Access in large metropolitan markets. This cardless concept securely authenticates a user on his or her smartphone. Then, the customer chooses the withdrawal amount right on the phone before arriving at the ATM. Once there, the user simply scans a QR code on the ATM screen and, within seconds, the cash is dispensed and an eReceipt is sent to the phone.
This burgeoning technology isn’t just efficient and fast, it’s also more secure, since all of the information from Cardless Cash Access is held securely within the cloud and not on the smartphone, which could be lost or stolen.
In addition to cardless ATM technology, a new wave of ATM makeovers looks to be on the horizon, as new technologies enable these cash dispensers to do more. In fact, new machines are in the works that will allow users to purchase and reload prepaid credit and cell phone cards, while actually speaking with tellers via the ATM video screen.
Ultimately, as financial institutions are forced to make improvements and upgrades to their ATM infrastructure, many are seeing the situation as a great opportunity to implement new technology that can drive revenues upward.