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Banks take fraud fight a notch higher with launch of new ATMs

By By Frankline Sunday | Jul 5th 2013 | 3 min read
By By Frankline Sunday | July 5th 2013

By Frankline Sunday

Bank customers will soon have safer trips to their ATMs.

The move follows the launch of new high-security ATM machines into the Kenyan market.

The launch comes on the heels of efforts by commercial banks and industry regulator to put a lid on rising cases of ATM fraud and cyber-crime in the country.

The security enhanced Diebold Opteva family of ATM terminals, are produced by Diebold Inc, a global financial hardware and software solutions provider.

“Providing a secure environment for ATM users is essential to maintain consumer confidence,” said Xavier Bianne, Diebold’s sales vice-president in charge of Europe, middle East and Africa.

“We seek to address the security requirements of financial institutions,” he explained adding, “By integrating leading-edge security features directly into the design of our Optiva family of ATMs, we have engineered what could be the most advanced ATM security solution in the business.”

The new ATM machines will be distributed by a local firm, Tracom. The firm is a major vendor partner for Diebold. The ATM terminals include enhanced security features including bar-code readers, hidden cameras and fraud-resistive dispensers. Others features include a encrypted PIN pads and a duress. The banking industry has in the last two years witnessed an increase of ATM fraud.  Criminals have taken advantage of improved technologies and tools to steal millions of shillings from unsuspecting banks and their customers.

A study conducted by audit firm Deloitte in June last year, revealed that commercial banks in East Africa lost more than Sh4.06 billion through cyber-fraud in the in the last one and half year.

Fraud cases

The figure could be much higher as many fraud cases go unreported.

Most cases of ATM theft occur through skimming, where the consumer’s card is stolen from him/her briefly like at a restaurant then passed through a reading device which captures the data off the card.

This data can then be used to make a duplicate card which can be used to undertake transactions or withdrawals on the user’s bank account without his knowledge.

Cases of customers also being car-jacked and driven to ATM machines and forced to withdraw their money has also been a concern with many consumers having fallen victim.

The new ATM machines will make it impossible for criminals to use skimmed or stolen cards due to installed bar-code readers and encrypted PIN pads.

The machines also come with high definition cameras making it possible to identify any unauthorized person who withdrew money using an ATM card that does not belong to them. Central Bank Governor, Prof Njuguna Ndung’u, said the launch of the enhanced ATM terminals compliments the industry’s move to enhance more secure cards.  This includes the migration from magnetic strip cards to new chip and pin cards. 

“The banking industry is grappling with challenges of ATM fraud and we are accelerating the migration to chip and pin technology to realise a more secure payments infrastructure in the banking sector,” he said.

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