Banks move to equip ATMs with anti-skimming devices

Banks have rushed to install anti-skimming devices and PIN shields at their automated teller machines to meet the central bank's deadline of March 15 for deploying such gadgets to protect their customers from fraudsters.

The banks will have to assess the effectiveness of the solutions as well.

The Bangladesh Bank directive came after four ATMs of three banks were skimmed off by local and international fraudsters between February 6 and February 12 in Dhaka.

The ATM skimming, which was unprecedented in Bangladesh, cost the banks over Tk 25 lakh and dented the confidence of ATM users.

“We have received letters from 22 banks that want to install anti-skimming devices in their ATMs,” said Kazi Saifuddin Munir, managing director of IT Consultants that owns the country's biggest payment processing consortium, Q-Cash. It has about 3,000 ATMs in its network for its 33 client banks.

Munir praised the banks' move to deploy anti-skimming devices and PIN shields as a positive development that will strengthen the security measures in ATMs.

An anti-skimming device protects a card from being skimmed off by fraudsters and the PIN shield makes it more difficult for them to capture the cardholder's PIN with the miniature camera that they install on the ATM fascia.

An average anti-skimming device costs up to Tk 25,000; the best-quality one will cost around Tk 80,000. A PIN shield costs Tk 1,000-Tk 2,000.

Presently, there are around 7,500 ATMs, of which, 3,000 already have anti-skimming devices, according to the BB.

Dutch-Bangla Bank, which has the largest network of ATMs with nearly 3,700 machines, has also advertised in the newspapers about deploying anti-skimming devices and PIN shields in all its ATMs.  But it will not be possible for the banks to install the devices in all machines by the BB-given deadline of one month.

“We have just advertised for procuring anti-skimming devices and PIN shields. It will take time to finish the installation,” said Abul Kashem Mohammad Shirin, deputy managing director of Dutch-Bangla Bank.

Eastern Bank Ltd, which was one of the three victim banks of the recent ATM frauds, also took measures to install such devices.

“Anti-skimming devices were supposed to be in-built in our ATMs as per work order given to the vendor. We have asked the vendor to reply in this regard,” said Ziaul Karim, head of communications at EBL.

Karim said his bank has already moved to deploy PIN shields in all ATMs by the BB-given time. However, bankers said it is clear that the magnetic stripe on payment cards is the underlying cause of the persistent threat to skimming and data compromise at the ATMs.

They said the payment card should be EMV-equipped to reduce the risk of frauds.

On the time extension, Shubhankar Saha, executive director and spokesman of the BB, said if a bank can legitimise that it needs more time, the central bank will consider it.

According to the ATM Security Association, a global network of manufacturers, suppliers and services providers, the global cost of ATM skimming is estimated to be over $2 billion annually.

It said skimming represents 98 percent of all ATM fraud losses.

Skimming losses in Europe rose 14 percent to $343.5 million in 2014 -- the highest since 2009 -- despite a 3 percent decrease in the actual number of skimming incidents.

The average cost of a skimming incident rose 18 percent in 2014 from the previous year to approximately $61,000.

With all ATMs in Europe now being EMV compliant, organised crime has shifted outside its borders.

The association in a paper said card data is skimmed in one country and then used for fraudulent ATM withdrawals in another.

It found 87 percent of all losses in Europe in 2014 were generated from cross-border fraud. The top cross-border locations for European card losses are the US, Indonesia and Philippines.