Automated Teller Machine: Its Usefulness, Caution & Possible Malpractices.

Automated Teller Machine: Its Usefulness, Caution & Possible Malpractices.

Introduction

Obviously, the invention of Automated Teller Machines (ATMs) as brought unprecedented convenience to the banking and computer-literate world. Financial transactions are seamlessly consummated without any need to visit a banking hall. In my Questionnaire; most of the respondents described as hectic, frustrating and time consuming the stress of having to wait for long hours in nerve-wrecking queues in banking halls but the advent of the ATM as unarguably eliminated that.

Wikipedia defines an Automated Teller Machine (ATM), Automated Banking Machine (ABM), cash machine, cashpoint, cashline, or colloquially hole in the wall as, 'an electronic telecommunications device that enables the customers of a financial institution to perform financial transactions without the need for a human cashier, clerk or bank teller'. On most modern ATMs, the customer is identified by inserting a plastic ATM card (which could either be a credit or debit card) with a magnetic stripe or a plastic smart card with a chip that contains a unique card number and some security information such as an expiration date. Authentication is provided by the customer entering a personal identification number (PIN).

Alternatively, the ATM could also be referred to as a banking terminal that accepts deposits and dispenses cash but the ATMs are technologically modernized on a daily basis to do much more than these two traditional functions. ATMs are activated by inserting a cash or credit card that contains the user's account number and PIN on a magnetic stripe. The ATM calls up the bank's computers to verify the balance, dispenses the cash and then transmits a completed transaction notice.

Brief History

The historical development of the Automated Teller Machine is broad and confusing. But for clarity sake, it would be narrowed down and discussed under two different headings. They are discussed in the preceding paragraphs; 

·        The Bankograph- the United States Patent record credits Luther George Simjian with developing an "art device" in 1960 which was then called The Bankograph. An experimental Bankograph was installed in New York City in 1961 by the City Bank of New York, but removed after six months due to the lack of customer acceptance. The Bankograph was an automated envelope deposit machine (accepting coins, cash and cheques) but did not have cash dispensing features.

·        John Shepherd-Barron- On the 27th of June, 1967, The Automated Banking Machine (ABM as it was then called) was put into use by Barclays Bank in Enfield Town, North London, United Kingdom. This instance of the invention is credited to John Shepherd-Barron of printing firm De La Rue. This design used paper cheques issued by a teller or cashier, marked with carbon-14 for machine readability and security, which in a latter model were matched with a personal identification number. John Shepherd-Barron is largely regarded as the Father of the modern day ATM because subsequent technological advancements were based on his earlier invention.

 Features & Merits of the ATM

The origination of Automated Teller Machines is a significant milestone in the financial services industry and beyond. Most of my respondents gave various reasons why they believe that the automation of financial transactions which the introduction and development of ATMs and other Electronic channels as made possible is one of the greatest technological innovation of our time. Their opinions are summarized below;

·        Excellent & Convenience – A great number of the people surveyed believe that services offered by ATMs are excellent and convenient. I believe that everyone would agree with this assertion. ATMs and other Electronic channels offered by the financial institutions are very helpful and user friendly. Mobile Money, Internet Banking, Online Banking, ATMs amongst other electronic platforms has made banking and execution of financial activities too good to be true.

·        Homogeneity- At the initial stage when banking and accounting originated, the most common way of keeping records and consummating financial transactions was relatively manual. Pens and papers where used to calculate and record customers’ account balances. It was impossible for a bank customer to transact in his account from other branches of the same bank but the development of computer-based record keeping and automation of bank transactions has unarguably eliminated that. Then, you can only transact in a branch that your account is domiciled before the synchronization of bank's records. Now, a UBA customer does not need to have a Sterling Bank account before the Bank's ATM would dispense cash to him as long as everything is in place.

Additionally, the ATM could also be upgraded to offer some Value adding services like Printing of Bank statements for a limited period of time, cheques processing, Purchasing flight tickets, movie and concert tickets, lotteries, donating to charities and ultimately biometric features; where the automation of transactions would be based on fingerprints, face recognition amongst others. (Kenechukwu Ewelukwa, 2015)

According to the popular saying that, "there are two sides of a coin", there are numerous disadvantages that these convenient and excellent services have brought. Financial misappropriations, sabotaging of financial records, hacking into bank's databases, ATM card theft, ATM fraud amongst others are on the increase. These fraudulent persons, in most cases go as far as conniving with banks officials to perpetrate fraud.

Ironically, most of my respondents believe that using the ATM and other electronic channels is more secure than the conventional way which involves having to wait in long queues to be attended to individually. However, they gave a list of several options on how Automated Teller Machines can be made more secure for regular users.

·        Built-in Firewalls- (Kenechukwu Ewelukwa) believes that the ATMs should be enhanced with built-in security firewalls that would lockdown the machine and send a distress signal to the nearest police station once the machine detects any frivolous attempt to break into it. This move would make it impossible for any criminal to break into the ATM because we have heard of these cases uncountable times. These security firewalls should be upgraded regularly.

·        More Security Presence- (James Ameh) states that one of the ways to improve services and guarantee safety of ATM users is to provide adequate security at ATM points, especially in suspected area of high tendency for criminal activities. The story of how a man was shot dead in the early hours of a day, sometimes last year in the Lekki axis of Lagos is still fresh in our minds. The provision of adequate security personnel around these ATMs speaks volumes because most of these street urchins and other criminals hang around these points at wee hours to carry out nefarious acts especially in quiet neighbourhoods.

·        Encryption of passwords (Kenneth Okonkwo) - This respondent believes that one of the ways the Automated Teller Machine can be fortified is to ensure that PIN codes and other security information are encrypted so that only the card holder can access the card, I totally agree with this tip. In light of some shocking revelations of how some bank's staff take advantage of their vantage position to certain information to carry out unimaginable acts. This tip would ultimately ensure that it is drastically reduced. The encryption of password would make it almost impossible for any other person to access the customer's account except with the consent of that person expressly stated.

·        Enhancing the Microchip on the card (Andrew A) - The Microchip on the ATM is where the customer's financial information as well as personal records is warehoused. It is the most important feature of the credit/debit card. Enhancing the microchip is the same as enhancing the total security of the card. The card could also be upgraded to detect if it is in the wrong hands using Artificial intelligence (AI).

Perhaps, in this course of this research, I noticed that most of my respondents do not know that the Automated Teller Machine is fortified with a high-tech security feature that I would like refer to as Pin Code Reverse. This means that when you type your PIN in reverse, the ATM stills dispenses cash but automatically sends a signal to the nearest Police Station that something is fishy. It is very helpful especially in times of coercion because you are the only person that would know that the PIN code as being typed in a reserve format.

Conclusively, this write-up would not have been possible without the numerous contributions of those that took out time off the tight schedules to answer the questions in my questionnaire. They really help in the course of this survey and I want to say a very big THANK YOU.

THANK YOU and GOD BLESS YOU ALL

Olusanya, Oluwole Sheriff