The emergence of
Automated Teller Machine(ATM)
ATM or Cash points, first introduced in 1961 by City Bank of New
York on a trial basis, allowed financial institutions provide their customers
with a convenient way, round the clock, to carry out varying transactions which
included withdrawal of funds, made deposits, check account balance, and later
on included features to allow customers pay bills, etc. There was no need for a
cashier to be present or for a customer to physically visit the financial
institutions premises to carry out such transactions.
ATM technology allows customers carry out the above-mentioned
transactions using an ATM card, which could be a debit or a credit card. An ATM
machine authenticates the card by reading and verifying the magnetic strip,
card number, expiration date, and an already provided or pre-selected PIN
number.
Like with most technological advances, there is always a flaw
which criminal-minded individuals identify and exploit to perpetuate fraud.
Technology is being constantly evolved so that ATM transactions
can be an enjoyable experience to its customers, especially if one has to pay
for goods or services in cash by 1.00am in the morning and has no money.
Biometrics
What better way than using Biometrics, which has successfully
been applied for identification purposes to validate passport and travel
documents, entry into secured areas, and in authenticating or securing
financial transactions, especially in developed nations.
Biometrics can be applied to uniquely identify an individual,
based on his/her physical or physiological or behavioural traits, features or
attributes, which include facial recognition (visage is such an example), DNA,
fingerprint, voice recognition, etc.
There is still the issue of fingerprint spoofing or cloning
(fake biometrics), but it is certainly easier to clone a card number, as it is
currently practised.
In different countries, biometrics technology (fingerprint
authentication to be precise) has been successfully used to combat ATM fraud by
financial institutions such as the Western Bank in the USA, Banco Falabella in
Chile, Groupo Financiero Banorte in Mexico, to mention a few.
In developing countries such as Nigeria, according to reports,
ATM fraud seem to be committed by mostly individuals linked to bank officers
who are able to provide pin numbers and other relevant information required to
commit such crimes.
With biometrics, such fraudulent incidents can be minimised, as
an added layer of authentication is now introduced that ensures that even with
the correct pin information and in possession of another person’s ATM card, a
fraudster will not be able to withdraw any money since the biometric features
of every individual is unique.
The continuous usage of services such as the ATM will rely quite
heavily on public perception and confidence that it is safe to use it for
everyday transactions that include cash withdrawals, payment of bills, prepaid
phone top up, and a host of other transactions which at the moment can only be
carried out by actually going to one’s local bank.
Investing in Biometrics
As Biometrics technology is becoming cheaper both in its
application and usage, financial institutions need to invest in this technology
as a way of securing transactions, both across the counter and whilst using the
ATM.
It is possible that in securing transactions in this manner,
financial institutions can provide even more services at the ATM which will
generate more revenue and cut down on the amount of services offered across the
counter.
By providing a wide range of services at the ATM, depositors and
customers can conveniently carry out banking transactions round the clock and
reduce the heavy reliance on across-the-counter services, which also is to the
advantage of these financial institutions.
Certainly, a winning business case based on ROI (Return on
investment) can be made for investing in using biometrics to secure ATM
transactions.
In the United Arab Emirates, Barclays Bank in 2007 successfully
implemented biometric technology to secure ATM transactions. In Bolivia and
across the Middle East, Biometrics has been successfully applied as mentioned,
providing confidence and peace of mind to bank depositors and customers in
these countries.
Off course with such technology, combined with further educating
depositors and customers, on the best practice – such as to always change one’s
pin number, not to use obvious numbers as one’s pin number like, one’s date of
birth, car registration number, etc This will certainly all go a long way in
reducing the level of ATM fraud currently experienced in developing countries.
Installing all ATMs in a secure, properly lit environment, with CCTV coverage
will also assist in minimising ATM fraud.
Also, in a country like Nigeria, a review of the relevant
procedures within the financial institutions that caters for how pin numbers
are generated, handled and delivered to the customer (at the least to minimise
the number of people who it passes it through) will also contribute in
combating this manner of fraud.
When the relevant technology is combined with best practice and
an effective procedure, the results can be rewarding but they certainly need to
be deployed hand in hand.
There is certainly no silver bullet method or technology
advocated that will guarantee a 100% eradication of ATM fraud completely (there
never is), since as mentioned, the emergence of new technology everywhere in
the world is followed closely by a subverting technique or method but can
certainly go a long way in minimising it.
The writer is an
international IT and Business Process Consultant.
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