Banks and installing anti-skimming devices on ATM terminals… how far?

It will not be a surprise to see a bank or banks keep mute over the installation of anti-skimming devices on Automated Teller Machines (ATM) terminals as directed by the Central Bank of Nigeria (CBN) until June 1, 2014 deadline.

The CBN had given all deposit money banks (DMBs) till June 1, 2014, to install anti-skimming devices on all their ATMs terminals.

This is against the backdrop of an upward increase in the number of ATM related fraud in the banking system, which does not portend good for the industry and requires urgent step to curb the abuse, the CBN said.

The question now is how far has the banks gone with this directive? Are they waiting till the June 1, deadline before they comply?

According to Chuks Iku, chairman, Committee of e-Banking Industry Heads (CeBIH), responding to this, a lot of banks have complied by installing the anti-skimming device on their ATMs, as there is no bank that will wait till June to implement.

“As we speak today, presentation is going on. Our role in CeBIH is to talk to our colleagues in each of the banks to ensure they comply before June this year. As we speak, a lot of banks have actually engaged consultants to actually implement the anti-skimming device,” he said.

The CBN has in addition to the existing guidelines on card related frauds and in order to guard against card skimming at ATM channels across the country, mandated all banks to comply with the provisions of 3.2 “ATM Operations” and 3.4 “ATM Security” of the Standards and Guidelines on ATM operations in Nigeria, and also install risk mitigating devices on their ATM terminals on or before June 1, 2014.

The apex bank warned that it would invoke appropriate sanctions on any bank for non-compliance with the directive.

However, the CBN has observed with satisfaction, the growth in the adoption of ATMs, by Nigerians, as one of the channels of e-payment. The regulator therefore reiterates its commitment to ensuring that the deployment and management of ATMs are in line with global best practices.

Analysts see this as a welcome initiative, saying it is positive for both the banks and the customers.

While interacting with journalists on issues relating to ATM migration at the maiden edition of briefing for the media/finance correspondents, Iku explained that the migration was from Windows XP to Windows 8. “Microsoft is the owner of the licence and this is why we are working with Microsoft in terms of ensuring that we comply. What we are doing now at CeBiH is to ensure compliance working directly with Microsoft. Different banks have their different ways of approaching all of these, but the common factor is that the licence belongs to Microsoft; and that is why we are going to work with Microsoft to also look at how we are going to implement. We will try and discuss with Microsoft. If we cannot conclude, and how do we ensure there is an extension,” Iku said.

Ernest Obi, head e-business, Keystone Bank, also explained that “not all the ATMs are affected. Some ATMs, most of the recent ones, come with Windows 7, Windows 8 by default. So, it is not that the whole industry is having a backlog of all ATMs migration. ATMs that were deployed in the last one or two years would have been upgraded using that platform already. It is only the old ones that the banks have for a long period of time that needed to be upgraded. It is not that the whole industry is in zero compliance. It all also depends on individual banks.

“CeBiH will not be able to speak for each of the banks but the banks are also consulting with Microsoft for a cheaper way of doing this. Individual banks still have the responsibility of upgrading its own software. “Conversations are ongoing with each of the banks to ensure that those ATMs that are not upgraded are upgraded within the shortest possible time,” Iku said.

HOPE MOSES-ASHIKE