Bryan Cespedes
Information Technology Course # 103 Section: 004
Date: Sept. 27 2013
Research Paper: ATM Technology
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Introduction:
In today’s society technology has proven to play an essential part in our lives. People around the world are trying to improve upon what has been already invented or create something new and revolutionary all together. In the realm of technology, advances are being made every day, from communications to finances. There has been much improvement in the way banking has been handled with the installations of computer systems, security structures, and various payment methods. Unfortunately there hasn’t been an easy, quick, and accessible way to perform bank transactions until the 1960s. Prior to the 1960’s people had to get to their respective banks and accomplish their bank transactions via face to face interaction with the tellers. With the introduction of Automated Teller Machines, a computer based banking system whose software allowed various bank transactions to be completed quickly, easily, and at any time of the day, it brought various security concerns. The ATM is a controversial and vital technology that plays a key part in banking because of the contributions it provides to the world, legal, social, and ethical affairs connected to it, as well as the security it provides to its operator. To succeed in understanding how ATMs have revolutionized the way people conduct bank transactions in today’s society, one must research over and above.
Background:
The earliest models of ATMs were only able to accept cash and check deposits. At this time people were allowed make these two transactions at any point in the day, and was originally called a Bankograph. The Bankograph was invented by American inventor, Luther Simijan in 1960. The technology in this antiquated included various fundamental ideas and innovations that were proved upon to create today’s highly advanced ATMs. The ATM section of the History channel’s website mentions the following, “So that customers could trust that they would see their money again, there was a microfilm camera inside the Bankograph that took a snapshot of every deposit” (“Automated teller machines,” 2013, para.3). These early models of automated machines were not successful due to the bad reputation it received as the only customers that used these banking machines were gamblers and prostitutes. The adaptation of ATMs in that day’s society would require some time and more importantly a crucial enhancement from a Scottish inventor in the year 1967. John Shepherd-Baron a student from Edinburgh University and Trinity College devised the concept of Automated Machines that could dispense cash. He tested his new innovation in a bank in North London, the first ATM that could dispense cash 24 hours a day. John Baron knew that with this new application he must infuse some sort of way to make these machines secure and reliable. The introduction of the 4 digit Personal Identification Number (PIN) was used in terms of security for ATMs, also devised by John. Another security measure was the use of paper vouchers written in radioactive ink in which Baron’s ATMs interpreted. Many other bank competitors tried to replicate and outdate Barons prototype, but the closest and purest ancestor of today’s ATM would arise 2 years later in the United States. In September a former baseball player, Donald Wetzel was the first to renovate the way we interact with ATMs by introducing the addition of plastic cards with magnetic strips to which you swipe in order to help prove your identity. This technique paired with Baron’s 4 digit PIN code help solidify a strong secure base for financial transactions. Since Wetzel’s Automated Teller Machines first appeared in banks across the United States there have been many contributions to ATM security by various inventors and engineers. Software updates, encryption systems, camera set ups, and facial recognition tools are only a few of these contributions. With such technological advances one must ask themselves whether the advantages outweigh the possible dangers, and to do so one must first acknowledge the benefits of ATMs and their security updates.
Benefits:
Automated Teller Machines were created to help banks reduce the line of people waiting for bank employees to perform bank transactions. In modern ATMs, they provide multiple bank transaction options as opposed to the prototypes created in the 1960s. Many of these new ATMs can allow one to check your balance, switch funds from one account to another, print bank statements, check and pay credit card bills, and place limits on accounts used for purchasing goods without having to leave one’s vehicle. In addition all of these services can be accessed at any time of the day, giving bank employees more rest and free time. Due to this unlimited window of accessibility some banks earn revenue for each withdrawal of money made depending on one’s bank company. Credit card fees is also a factor to consumers regarding ATM usage, ATMs promoted cash payments for goods as opposed to using a credit card and be charged a fee. Another benefit is increased publicity and advertisement, the more ATM locations a bank has the more exposure the bank is receiving as well as informing the society that if one is to ever need cash but not have any; there are multiple ATM locations that can help with that problem. As Doug Steck mentions in his Nation’s Restaurant News article, “About 50 percent of all customers who use ATMs spend their money in the establishment where the ATM is located. Studies have shown that ATMs increase average purchases and impulse spending” (Steck, 2001). In terms of security upgrades, the benefits they bring to the customer are peace of mind, reliability, and financial control. Peace of mind comes from the printed receipts and statements supplied by ATMs. Reliability comes from the constant updates in ATM encryption, network, and operating systems. The financial control aspect arises from the introduction of credit cards with special coded chips integrated inside in addition to the magnetic strip, PIN codes, and fingerprint scanning. As with any technological improvements there are bugs and glitches that could lead to security compromises.
Security Concerns:
Although most of today’s technological inventions are created with the positive objective and cause, there are some created with a negative cause like cyber-hacking programs. As of recently there has been a rise in cyber-hacking. As stated in a U.S Department of Justice Case, “A group of 4 Estonians were charged with 16 counts indictment charges for computer fraud, access device fraud, and aggravated identity theft. In short they used high-level hacking techniques to steal payroll credit card info which they in turn used to gain about 9 million dollars from ATMs across the world”(U.S Department of Justice, 2009). This is a prime example to show how cyber-hacking can exploit vulnerabilities in the ATMs network security. In another case virus and Trojan were the utensils hackers used as described in World: Two Germans arrested on suspicion of hacking online banking system, “Two individuals were arrested and charged for using Trojans to break into a victim’s computer and monitor, record, and relay financial information. They then would log in and create a new account for third-party transfers and gain access that way” (World: Two Germans, 2010). The ATMs built in camera was the key in identifying the culprits involved. It is safe to say once a cyber-hacker has the necessary financial information there is little an ATM can do from giving funds to the hacker or group members, but can help immensely in gathering pictures and information about the individuals in front of the ATM. While most hacking seems to be done from behind a computer and away from the ATM physically, hackers are finding new ways to gather financial information from the ATM’s location itself. Around the U.S there have been many reports that customers have discovered attached modules and separate cameras on the machines themselves. Hackers are using devices known as “skimmers”, these are devices that attach to the card reader on an ATM and record the information transmitted from the card to the ATM system. Most of these devices include a built in pin sized camera aimed at the keypad of an ATM. This allows hackers to gather all the essential information such as, PIN, account information, card number, and security code. These devices are modified to seem like they are a default part of the ATM. Now the majority of banks have implemented counter measures to this as stated in Detecting Skimmers and other ATM traps, “Banks have so far responded to such threats by installing all kinds of anti-skimmer preventions such as see through plastic card readers, warning stickers, and displaying images on the screen showing how the ATM should look” (“Detecting skimmers and,” 2013). Resulting from these new techniques and strategies hackers use created many debates in the legal spectrum.
Legal Issues:
ATM fraud has been the focal point of the legal world in terms of finance. It seems with every cyber hack or illegal decryption of financial information the perpetrators always end up at an ATM to receive their prize. This repeated pattern has led to debates on whether ATMs should be used at all. The idea in essence seems like a great innovation but the security flaws and vulnerability seem to cause more harm than good. There are some cases where hacker don’t even have to work as hard to acquire the information they need, as stated in a case study in Pakistan, “Since the breach has been thoroughly investigated, we, therefore, concluded that the banks’ internal control system had failed to detect the implantation of mapping bug which deprived the bank of more than 21 million Pakistani Rupees” (Shaikh & Shah, 2012). Cases like these around the world have angered customers to the point where they look for legal action against their banks or against the perpetrators themselves. In one legal case, an ATM owner failed to have any notification of the withdrawal fee on the machine resulting in a customer filing a lawsuit against the owner. The official claim for this case as stated by Greg Andrews in his journal article, “Pike ended up filing a class action federal lawsuit charging Nick’s ATM lacked a fee-disclosure sticker, putting it in violation of the federal Electronic Funds Transfer Act. The suit argues that Nick’s “frequent and persistent” non-compliance with the law entitles Pike and hundreds or thousands of other users of the machine to damages far greater than what they paid in fees” (Andrews, 2013). This is important because it lead to almost all ATMs to have multiple notices on the ATM and software updates showing on screen terms and condition statements asking the customer if they comply. Another aspect which is closely related to these legal issues is the ethicality of these machines and their technology.
Ethical Issues:
Ethically hacking has been implemented just recently when a new ATM company tries to install an ATM at a new location, this was the case for the University of Abertay Dundee in Scotland. Cardline explains it best in NCR, University join to Fight ATM Fraud, “method known as “ethical hacking,” which occurs when a company contracts with a computer security expert to try to penetrate the company’s network to determine whether security holes exist that criminals could exploit” (Cardline, 2009). While this is a good method regarding ethics, some companies do much less to improve their ATMs from fraudulent attacks. Perhaps these unconcerned companies do not have the resources to counter act the constant evolution of cyber hacking techniques. This is why it is essential that banks stay up to date with their security software and to keep trying to implement new barriers to prevent and identify fraud. In modern society customer retention is another aspect which ATMs have to solve, but in order to understand this one must research further what affects the customer the most about ATM systems.
Social Issues:
Given today’s current reputation in terms of Automated Teller Machines, one can safely say without a severe increase in security there will be an all-time low for the amount of ATM users. There was a case study performed with various banks in Pakistan to find out what factor most correlated with customers staying with their bank provider when discussing ATMs. As resulted by group members, Hasan, Asif, Arif, and Khan, “Data was collected from different banks of Pakistan and result depicts that the satisfaction of the bank customers with ATM service quality leads to retain the customer with the bank. Bank managers need to focus on improving the quality ATM service to their customers in order to retain their customers with the Bank” (Hasan, Asif, Arif & Khan, 2013). This proves that customer satisfaction is the key to bringing people back to using ATMs in general to switch them from using credit cards to using cash, especially so if the ATMs do not charge any fees. One way to provide quality customer service is to create machines that cater to all types of people. Some banks went above and beyond to accomplish this; one prime example is a special Wells Fargo ATM which was installed just before the Olympics in Iowa. The reason this ATM was special is best explained in the magazine article, Talking ATMs have come to Iowa, Utah- Just in Time for the Olympics, which presented “That in 14 locations in Iowa, Wells Fargo bank has introduced talking ATMs. This tremendously helped those disabled with the inability to read and/or read brail. When someone with inabilities to see or read approached the machine all they have to do is plug in headphones and follow the instructions lead by the ATMs system” (Talking ATMs have…, 2002). This was a huge publicity success for Wells Fargo, and many of its competitors soon followed suit. As with any great leap in technology it is still only one more step closer to perfecting the invention. There are a couple of variable that need to be assessed so that ATMs across the world can be ultimately secure and reliable while providing quality service.
Further Research/Hurdles:
Since the main variables that are hindering the usage of ATMs in America as well as other parts of the world are security and providing customer satisfaction, those are the areas that need the most improvement. Further research from banking companies working along with IT security technicians could help create a security mainframe which is constantly changing not allowing hackers to predict or calculate a certain pattern and decrypt it. Also another great addition could be the use of the ATM cameras being able to send a real time picture to the mobile phone of the credit account holder to make sure it is in the right hands. Perhaps down the road when technological advances are more realistic to fund for all the ATMs in the world, there could be a retina scanner along with a palm reader. This combination paired with current identification techniques such as PIN numbers, and credit card chips could provide a fail-proof security system. Although if implemented it would increase the time a customer would spend at an ATM, but in retrospect it would significantly raise the level of trust the customer would have with the banking system henceforth bring more users. After evaluated all the subtopic above, one can clearly come to a concise and accurate conclusion about ATMs and the technology they use.
Conclusion:
After reviewing the research stated above one can come to the conclusion that at the moment ATMs prove to be more of a liability than a resourceful mechanism as reflected in the decline in ATM usage across the globe. It is not to say that ATM technology cannot one day become an essential tool in the financial aspect of everybody’s lives, but in order for this to be achieved, the security hurdles must be overcome, thus resulting in an increase in customer satisfaction. As these security measures are strengthened to be able to fight cyber fraud customers will finally have peace of mind when managing funds via ATMs.
Bibliography
(2001). Senate Judiciary Subcommittee on Crime and Terrorism Hearing: “Cyber Security: Responding to the Threat of Cyber Crime and Terrorism.”. Congressional Documents and Publications. Retrieved September 28, 2013, from http://search.proquest.com.mutex.gmu.edu/pqrl/docview/861804311/140D5A48E0B6152CD27/6?accountid=14541
Talking ATMs Have Come To Iowa, Utah – Just In Time For The Olympics! (2002, March). Braille Forum, XL(9), 41. Retrieved September 28, 2013, from http://search.proquest.com.mutex.gmu.edu/docview/198673516/140D0151444776D6B0A/1?accountid=14541
U.S. Department of Justice; Alleged International Hacking Ring Caught in $9 Million Fraud. (2009). Pharma Business Week. Retrieved September 28, 2013, from http://search.proquest.com.mutex.gmu.edu/docview/195413405/140CFE7FE5D4A9CE621/1?accountid=14541
World: Two Germans arrested on suspicion of hacking online banking system. (2010, August 10). Asia News Monitor. Retrieved September 28, 2013, from http://search.proquest.com.mutex.gmu.edu/docview/1242886332/140CFEC2C3A4C71CC1B/1?accountid=14541
ATM Security Features. (2013). Retrieved September 28, 2013, from Diebold Innovations Delivered: http://www.diebold.com/products-services/atm-self-service/terminals/atm-security-features/Pages/default.aspx
Automated Teller Machines. (2013). Retrieved September 28, 2013, from The History Channel Website: http://www.history.com/topics/automated-teller-machines
Detecting skimmers and other ATM traps. (2013, May 20). Retrieved September 2013, 2013, from IT Security: http://security.stackexchange.com/questions/36135/detecting-skimmers-and-other-atm-traps
Andrews, G. (2013, July 15). Nick’s ATM miscue spawns legal nightmare. Indianapolis Business Journal, 34(20), 4. Retrieved Septemeber 28, 2013, from http://search.proquest.com.mutex.gmu.edu/docview/1400431840/140D004C74332AD8F55/1?accountid=14541
Cardline. (2009, August 10). NCR, University Join To Fight ATM Fraud. American Banker, 174(152), p. 6. Retrieved September 28, 2013, from http://search.proquest.com.mutex.gmu.edu/docview/249457933/140D008C64D6AAD6603/1?accountid=14541
Hasan, A., Asif, U., Arif, M. I., & Khan, N. (2013, June). ATM Service Quality and its Effect on Customer Retention: A Case from Pakistani Banks. Information Management and Business Review, 5(6), 300-305. Retrieved September 28, 2013, from http://search.proquest.com.mutex.gmu.edu/docview/1425864226/140D010042D605BCE25/3?accountid=14541
Payment Alliance International. (2013, June 1). TOP 5 BENEFITS OF ATMS AT YOUR BUSINESS. Retrieved September 28, 2013, from payment alliance international: http://www.gopai.com/blog/ATMs/14/Top-5-Benefits-of-ATMs-at-Your-Business
Shaikh, A., & Shah, S. (2012). Auto Teller Machine (ATM) Fraud – Case Study of a Commercial Bank in Pakistan. International Journal of Business and Management, 7(22), 100-108. Retrieved September 28, 2013, from http://search.proquest.com.mutex.gmu.edu/docview/1327700239/140CFF353A43353D284/1?accountid=14541
Steck, D. (2001). Bank on it: Owning your own ATM can be economical way to draw customer traffic. Nation’s Restaurant News, 35(41), 20,48. Retrieved September 28, 2013, from http://search.proquest.com.mutex.gmu.edu/pqrl/docview/229335310/140CFD187BF7742D27B/1?accountid=14541
Verma, S. (2013). Invention Story of ATM. Retrieved September 28, 2013, from EngineersGarage: http://www.engineersgarage.com/invention-stories/atm-history
Types of Sources by title:
Reports:
Senate Judiciary Subcommittee on Crime and Terrorism Hearing: “Cyber Security: Responding to the Threat of Cyber Crime and Terrorism- (This source provided valuable information on ATM security vulnerabilities and gains credintials being a government document.
Magazines:
Talking ATMs Have Come To Iowa, Utah – Just In Time For The Olympics! (This source provided valuable information showing the social evolution in terms of ATM technology. The organizations involved in this are well known reputable groups.)
Trade Journals:
U.S. Department of Justice; Alleged International Hacking Ring Caught in $9 Million Fraud (This source provided valuable information in showing the security concerns aspect of ATMs and gains credentials as a government case.)
Nick’s ATM miscue spawns legal nightmare ( This source provided valuable information in showing the types of legal circumstances ATMs can be involved in, gains creditials for stating information gathered from a real legal case.)
Bank on it: Owning your own ATM can be economical way to draw customer traffic (This source provided imporant information on the topic of ATM and their benefits, and gains creditials as the author is the President and chief executive of E*Trade Access Inc., a well known ATM soltions provider.)
Newspaper:
World: Two Germans arrested on suspicion of hacking online banking system ( This soucre provided valuable information in providing evidence in ATM system vulnerabilites, and gains creditials by gathering its information from a government case.)
NCR, University Join To Fight ATM Fraud ( This source provided valuable information in providing proof of ethic issues that pertain to ATMs and gains creditials in involiving a reputable corporation and University.)
Websites:
ATM Security Features (This website provided important intel in terms of the different types of security technologies are being implemented at today’s current age, gains credintials from being a successful ATM distributor.)
Automated Teller Machines (This website provided important intel in terms of providing background information of ATMs and their technological developments, gains its credentials from being from a highly known Television channel known for providing accurate historical shows.)
Detecting skimmers and other ATM traps (This website provided important intel in terms of showing different ways hackers are physically altering ATMs, website gains creditials by being constantly reviewed and updated.)
Invention Story of ATM (This website provided important intel of the early contributors of ATMs and their technologies. This website gains credentials by being placed in the Knowledge Base section of an inventions website.)
TOP 5 BENEFITS OF ATMS AT YOUR BUSINESS ( This website provided important intel in terms of showing the benefits and the possibilities in revenue when ATMs security is at it’s highest, this website gains credentials by being named 2012 Division 1 Top Distributor winner of selling ATMs.)
Scholarly Journals:
ATM Service Quality and its Effect on Customer Retention (This source gains credentials by being a peer-reviewed scholarly journal as well as a case study. This source provided information on the social aspect regarding ATM technology.)
Auto Teller Machine (ATM) ( This source gains credentials by being a peer-reviewed scholarly journal as well as a case study. But was also used in the highly-reputable journal of International Journal of Business and Management. This source was helpful in providing accurate information about the security faults of ATMs and the amount of fraud cases filed against them.
Magazine, book, Journal Article extra requested source info:
Talking ATMs Have Come To Iowa, Utah – Just In Time For The Olympics!-
Publication title: Braille Forum
Volume: XL
Issue: 9
Pages: 41
Number of pages: 0
Publication year: 2002
Publication date: Mar 2002
Year: 2002
Publisher: American Council of the Blind
Place of publication: Oklahoma City
Country of publication: United States
Date Accessed: September 28 2013
U.S. Department of Justice; Alleged International Hacking Ring Caught in $9 Million Fraud-
Publication title: Pharma Business Week
First page: 1873
Publication year: 2009
Publication date: Nov 23, 2009
Year: 2009
Publisher: NewsRx
Place of publication: Atlanta
Country of publication: United States
Publication subject: Medical Sciences
Date Accessed: September 28 2013
Nick’s ATM miscue spawns legal nightmare-
Publication title: Indianapolis Business Journal
Volume: 34
Issue: 20
Pages: 4
Publication year: 2013
Publication date: Jul 15, 2013
Year: 2013
Publisher: IBJ Corporation
Place of publication: Indianapolis
Country of publication: United States
Publication subject: Business And Economics
Date Accessed: September 28 2013
Bank on it: Owning your own ATM can be economical way to draw customer traffic-
Publication title: Nation’s Restaurant News
Volume: 35
Issue: 41
Pages: 20,48
Number of pages: 2
Publication year: 2001
Publication date: Oct 8, 2001
Year: 2001
Publisher: Lebhar-Friedman, Inc.
Place of publication: New York
Country of publication: United States
Publication subject: Hotels And Restaurant, Food and Food Industries
Date Accessed: September 28 2013
ATM Service Quality and its Effect on Customer Retention-
Publication title: Information Management and Business Review
Volume: 5
Issue: 6
Pages: 300-305
Number of pages: 6
Publication year: 2013
Publication date: Jun 2013
Year: 2013
Publisher: International Foundation for Research and Development
Place of publication: Dubai
Country of publication: United Arab Emirates
Publication subject: Business And Economics, Library And Information Sciences
Date Accessed: September 28 2013
Auto Teller Machine (ATM)-
Publication title: International Journal of Business and Management
Volume: 7
Pages: 100-108
Number of pages: 9
Publication year: 2012
Publication date: 2012
Year: 2012
Publisher: Canadian Center of Science and Education
Place of publication: Toronto
Country of publication: Canada
Publication subject: Business and Economic– Management
Date Accessed: September 28 2013
Automated Teller Machine Technology 