The risk of ATM fraud

According to recent research, ATM fraud is on the rise in the United States and is expected to be the main form of fraud that customers will face in the coming year. All types of ATMs are under attack - from standalone to branch machines - and so banks and network operators need to consider how best to protect consumers from fraud in order to retain customer trust.

EMV is one of the best ways to prevent against fraud as discussed in previous posts. Most countries, including Thailand and the majority of the Middle East, are in the process of starting on the migration path, while countries such as Canada and Australia will be EMV compliant by the end of the next year. While some countries are putting in place the requirements to migrate, other countries including the U.S., are not planning to migrate to the standard in the near future. In the meantime, all non-EMV compliant countries need to ramp up their efforts to prevent fraud in order to protect consumers as much as possible.

There are several interim measures that ATM deployers can take and a recent article on Bank Info Security provides a comprehensive overview of the necessary steps to minimise the risk of skimming at non-EMV compliant ATMs. These include:

• Have a Plan and document it

• Educate Your Branch Employees

• Inspect All Locations

• Set ATM Standards

While the above measures, which have a high operational cost, can yield some results in preventing ATM fraud, it is clear that these are only temporary measures . The success of EMV in combating fraud in other regions, proves that this standard is currently the best form of protection against fraud at the ATM. As the risk and prevalence of fraud increases across the globe, it is critical that all individuals and financial institutions take the necessary action to prevent it and consider adopting EMV standards.

Ian Kerr