Door contacts, and heat detectors. The daily routine, which includes loading the machine, retrieving the seized cards, running totals, balancing the accounts & bringing the machine on-line again, should be done in presence of a very responsible officer. Some of the high cost security options include an on-line security camera along with the posting of a 24 hours guard.
Marjolijn (1900) has suggested the following ways to fight ATM frauds.
A. Fraud Policies
1. Develop written policies for ATM fraud prevention, investigation, and claim
settlement.
2. Review fraud policies and audit controls of all outside vendors.
3. Include ATM activity on suspicious activity reports.
4. Exchange fraud information with other financial Institutions in your market.
B. Card Issuance
5. Audit blank card stock on a routine basis.
6. If card processing is done in-house, limit employee access to blank card stock and
encoding machines.
7. Do not mail ATM cards to a post-office box or known mail drops.
8. Undelivered or returned ATM cards should be handled by a special section in the
organization.
9. Strictly limit employee access to PINs and PIN algorithms, and require dual control
procedures.
10. Limit the number of PIN access attempts by the consumer. The majority of bank
allows no more than three tries before capturing the card.
11. Ensure (hat your system docs not permit transaction when PINs cannot be verified.
D. ATM Withdrawals
12. If appropriate, limit withdrawals when operating in an on-line mode.
E. ATM Deposits
13. Consider limiting an immediate credit for deposits.
14. Require dual control for deposit verification.
15. Report ATM deposits in your kiting reports.
F. System Requirements
16- Encrypt both hardware and software to prevent fraudulent entry.
17- Upgrade system for full PIN encryption.
18. Select an impartial third party to analyze systems and procedures on an
basis.
19. Ensure that your system can Hot Card immediately after receiving a report of a lost
or stolen card.
G. Claim Processing
20. Require customers claiming unauthorized use 10 sign an affidavit.
21. Remind customers who claim fraud of the penalties for a false claim.
22. Refer false customer claims for criminal prosecution.
H. Employee Education
23. Inform employees of the organization’s fraud policies and claim processing procedures.
24.Refer any employees who are misappropriating funds to criminal prosecution.
I. Customer Education
25. Remind customers of PIN safety and how to report a lost or stolen card on a
routine basis.
2. Marketing; On the marketing front banks will have to spend heavily on creating a
general awareness about the benefits of using ATMs. They will also have to take up the
task of building up confidence of customers in using ATMs. Customers will have to be
educated about the uses of ATMs. They will have to be taught the proper use of ATMs.
Banks will also need to tie-up with government departments such as telephone and
electricity, and market the ATM service to them also. An aggressive marketing campaign
will have to be designed in the initial phase of the introduction of ATMs, so that the
subsequent years will yield better profits. Banks should follow a two-stage policy, first
should promote ATMs among non-users by offering them incentives and second they
should devise policies for retaining old users. It appears that banks would have to target
older customers as they constitute a major part of customer population. It will be slightly
more difficult to introduce technology based services to older customers due to their general resistance to it and preference for personalized services.
3. Purchases: Before making purchases of ATMs and related products, banks should
take a very clear undertaking about reliability, service and maintenance of ATMs from the
vendors. The ATMs should be suitable for Indian weather conditions. There should be
provision for the use of regional languages in the software.
4. Maintenance: The work of maintenance -should be given to professional agencies.
They should be completely reliable as it involves the question of security. In America
there have been cases of embezzlement by service engineers.
5. Area Selection: ATMs can be installed in areas where there are no branches. Locations having higher density of population can be selected for installing ATMs. Highways, shopping centers, Hospitals, Petrol pumps, and other similar locations which have more cash flow, and which have more customers, can be ideal locations for ATMs provided security is ensured. The Bank of America has installed ATMs in some university campuses. While, selecting location, the crime rate in particular area should also be checked.