Blog

New insights into anti-skimming and banknote degradation solutions

May 1, 2012 by Dominic Hirsch — manager, Retail Banking Research

The findings of RBR’s latest survey of European ATM markets have just been released. One of the things that makes the most recent research findings particularly interesting is that they include a number of new metrics for the first time. The survey previously covered security features such as cameras, EMV and Triple DES, but two new ATM security features have been added this year — anti-skimming devices and banknote degradation systems. Their inclusion reflects the ongoing challenge of ATM crime.

The research shows that 32 percent of ATMs in Western Europe and 58 percent in Central and Eastern Europe have an anti-skimming solution in place. These figures do of course mask significant variation between markets — there are two countries, Slovakia and Sweden, where all ATMs contain such devices, and one, Poland, where they are not used at all.

In contrast, the penetration of banknote degradation systems is not as advanced, with 5 percent of ATMs in western Europe and only 1 percent in CEE having such solutions. Sweden (26 percent), Italy (24 percent) and Norway (22 percent) are the only countries with relatively widespread use, while two-thirds of countries have no or negligible deployment.

We will have to wait until the next research is published to see how use of these technologies evolves, but both should become more prevalent, particularly in the short to medium term. Until skimming is no longer a problem, the number of ATMs with anti-skimming devices will continue to rise.

For banknote degradation systems, specific factors such as location and the level of threat will heavily influence deployment. Costs of banknote degradation systems are much higher than anti-skimming solutions, so banks must consider the business case more carefully. It is hard to see anything but an upward trend in their deployment, however, as criminals will continue to revert to physical crime as opportunities for other types of fraud, such as skimming, diminish.

There are two other noteworthy additions to the latest RBR research which are worth a brief mention here. They are both software related — the first is use of customer relationship management software and the second is use of cash forecasting and management software. The majority of European ATMs either do not have such software in place, or rely on proprietary, often relatively basic solutions, but use of both types of software is expected to grow — the former because it has huge potential to increase revenues, the latter because of its value in cutting costs.

Reprinted from Banking Automation Bulletin (www.rbrlondon.com/bulletin)