Article

How will the ATM industry keep up with escalating fraud?

Execs from Wincor and Diebold explain how a global ATM security association will help make the response to criminal exploits faster and more efficient.

July 24, 2014 by Suzanne Cluckey — Owner, Suzanne Cluckey Communications

Dealing with fraud is like walking down an up escalator: Try as you might, you never get to the bottom of it.

Worse, as criminal gangs become increasingly well organized and digitally proficient, the speed of this escalator is, well, escalating.

For the ATM industry, this means that all sectors must work faster to keep up with enterprising criminals. But with so many players involved — vendors, suppliers, networks, IADs, FIs and others — moving with speed and efficiency to stop new security threats can be difficult. Very difficult.

In a meeting earlier this year, executives from Diebold Inc. and Wincor Nixdorf AG found themselves discussing the need for greater speed and coordination of effort in combating fraud.

They also discussed a possible solution: an industry-wide organization serving as a central point for gathering data about ATM fraud — whether at the machine itself or in backend systems — and sharing information about methods and procedures to thwart specific criminal exploits.

Last week, the two companies announced the formation of this new security entity and, this week, Joerg Engelhardt, VP of product management and marketing at Diebold, and Uwe Krause, VP of banking at Wincor, talked with ATM Marketplace about their vision for the association — starting with the obvious:

What are you calling the organization?

UK: We have no name at this time because our plan is that we want to formalize the association in August, and in August we are also finalizing the name. At the moment we are collecting the best of the international names.

Why form another industry association?

UK: [I]t makes no sense if a lot of suppliers and ATM vendors are recognizing the same type of attack and each of these guys is reacting in another way. And so our idea was to bring a real value-add to the customer by defining standards. Especially [because] 50 percent or more of our installations are in a multi-vendor environment. ...

And then the idea was born not to be in competition against all the other organizations but to bring to bring value, and this value must come from vendors and suppliers. And that was the idea, then, that we started with.

JE: It's basically really an execution-driven time-to-market approach here in a multi-vendor environment that we are all in — protecting our consumers and basically our customers with much better time to market against fraudsters, and significant skimming solutions in the future.

What do you see as the scope of security issues handled?

JE: This will be an association that will be led by an industry-independent chair. So it will be up to the organization to make these prioritizations that are obviously driven by the members — and the input is coming from the members.

How do you seeing the information-sharing working?

JE: This will be handled by the association that we are formally setting up, so there will be a clear definition on how information will flow. I think the most important piece ... is that this information will be handled in a very secure and auditable way. And I think that the foundation of what we are trying to set up is giving the confidence that information will be handled in a secure and very fast way.

Banks are known for being reluctant to share information. Will that be an obstacle here?

UK: I am absolutely sure with all the discussions we have [had] that there will be a real openness, that they will discuss it, that they'll bring things [to] the table because they have an issue.

JE: Many of them are working in a multivendor environment where these forces are attacking them and they have to protect — in a very fast and efficient manner — their consumers. So better information and a quicker time to market is just in their best interest. I personally do believe that they will open up and share information.

Is it really possible for industry members to set their competitive interests aside in order to work together?

JE: We do believe that within criminal attacks there is no competition. So this is best practice already in other industries — this type of collaboration — and that's just what we are trying to implement.

I do believe that competitive effort has to step back when our customers — the financial institutions and consumers — are attacked.

How are industry members receiving this idea?

UK: At the moment we have received the first feedback from suppliers and also from customers — from financial institutes — and also from a few, at the moment, of our vendors.

And they are discussing with us what are the next steps, how they can participate, what are the values and so on — like we are sharing now here. So there is a huge interest on an international basis from suppliers, vendors and also — I think very, very important —from the customers that are thinking it can bring a real value to their solutions.

Is this an organization that ISOs and IADs would also want to join?

UK: Yes, they are also involved, they can also participate because especially, if you look to attack the thing, we have to help this industry to protect money.

If a customer, a consumer, is losing trust [in the] ATM, it doesn't matter if the owner or the operator is a financial institute or an IAD. And so we have invited these parties — and also other network providers, not only IADs.

Ideally, who will the members be?

JE: I think a global profile is absolutely relevant to what we are talking about. ... At least on our end, all the feedback we're getting so far through customers, through our sales channels, through suppliers, is very positive ... there is a very strong will to participate.

At this time, inquires and communications about the ATM security association are being managed through email via information@ATMsecurityassociation.com. As the association begins to take shape, the companies intend to establish a formal presence with a website.

ATM Marketplace will provide ongoing updates as the association is formalized, named and ready to begin development of standards and procedures.

cover photo courtesy of khairul nizam | flickr

About Suzanne Cluckey

Suzanne’s editorial career has spanned three decades and encompassed all B2B and B2C communications formats. Her award-winning work has appeared in trade and consumer media in the United States and internationally.

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