Cash in Hand

Cash in Hand

Three ways to protect off-premises ATMs

If your bank, credit union or non-bank organization operates ATMs in remote locations, such as convenience stores or shopping malls, a bank heist that occurred in Japan last year probably caught your attention.

According to news reports, fraudsters used 1,600 fake cards to withdraw money from multiple ATMs belonging to the same South African bank. In just a few hours, the coordinated attack—focused on ATMs in convenience stores—drained the bank of more than $13 million.

While the magnitude of this fraud is rare, it should give ATM operators pause to consider the level of security they have in place around their off-premises ATMs.

Off-premises ATMs can be easy targets for thieves because they often don’t have the same level of security or surveillance that financial institutions have in their own branches.

Also, as ATM operators continue the transition to EMV or “chip” technology for bank cards, experts warn that self-serve ATMs and gas pumps are becoming more of a target for thieves. That’s because criminals are rushing to make a buck while magnetic strip cards, seen as less secure, are still being accepted by these channels.

According to credit scoring agency FICO, from 2015 to 2016, the number of payment cards compromised at U.S. ATMs or point-of-sale systems rose by 70 percent. Further, a full 60 percent of those compromises occurred at non-bank ATMs, following a similar pattern noted the previous year. In a recent report about ATM skimming, the agency said criminal activity was highest in places like convenience stores.

So what can banks, credit unions and non-bank operators do to better protect their ATMs and their customers? Taking a multi-layered approach to security is best.

Regularly Inspect Your ATMs

Operators should regularly inspect all of their off-premises ATMs. Are they functioning properly? Do they appear to have been tampered with? Are they located in well lit, high traffic areas?

It sounds simple, but taking the time to ensure that all of your remote ATMs are inspected in person can help prevent issues and detect suspicious activity sooner.

Deploy High-Quality Video Surveillance

Ensure you have adequate video surveillance in place. This means surveillance cameras capturing the ATM machine and its surroundings, but also ATM cameras inside the machines that capture clear views of patrons’ faces.

One recommendation is to use an ATM camera with High Dynamic Range (HDR), a feature that merges multiple exposures into one image with the best balance of lighting possible. This capability can be invaluable in ATM settings where patrons’ faces are often backlit with bright sunlight.

Proper video surveillance not only helps address crimes like skimming and card trapping, but it can also help deter other types of fraud, such as the depositing of empty envelopes or counterfeit checks.

Use Integrated Video, Transaction Data and Analytics

Regularly monitoring transaction data for suspicious activity is essential to thwarting ATM fraud like skimming or “cashouts,” where thieves drain the ATM of large amounts of cash through nefarious means.

By deploying a video surveillance solution that’s integrated with ATM transaction data and intelligent analytics, you can very quickly detect potentially fraudulent transactions, or even just suspicious activity, like loitering around machines.

Integrated video solutions allow you to very rapidly sort through all of your transactions and find irregular activity, such as the same person making multiple transactions with different cards or someone standing in front of an ATM for a period of time without making a transaction (a possible sign of someone installing a skimming device).

By configuring alerts, the system can automatically notify you when it detects this type of activity.

This article originally appeared in the September 2017 issue of Security Today.

About the Author

Daniel Caggiula is the banking solutions manager at March Networks.

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