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Fight Back: The Ongoing Battle Against ATM Fraud

Steve Gilde June 20, 2024
paragon-atm-testing-fraud
Fight Back: The Ongoing Battle Against ATM Fraud
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ATM  fraud continues to be a global problem, with criminals choosing to strike wherever the money is and wherever they find vulnerabilities to exploit. 

Statistics from the Nilson Report indicate that card-related fraud is now costing financial institutions, merchants, and consumers nearly 35 billion US dollars every year with a significant percentage of those losses coming from data stolen at ATMs.

 

“Throughout history, fraudsters have demonstrated a remarkable dedication to trying to outsmart their victims, and the advent of new technologies such as the internet, social media, cell phones, and artificial intelligence have simply widened their field of opportunity.” 

- The CFO

 

 

Why is ATM Fraud on the Rise? 

The internet has made it easy for anyone to buy specialized tools and instructions designed with the sole purpose of helping criminals steal money and data from your ATMs. A simple Google search provides numerous opportunities to acquire everything required to attack and compromise ATMs. 

It is somewhat ironic to see that you can use your credit card to purchase these devices - but also comforting to know that you get a full one-year warranty with your purchase. 

Unfortunately, the easy availability of these “tools of the trade” makes our job very difficult. Not only have criminals become increasingly well-equipped and sophisticated, their tactics are innovative and aggressive. That means we must close every gap, fix every loophole, and remediate every vulnerability as quickly as possible – testing these solutions thoroughly to ensure that we do not accidentally open up any new weaknesses for the crooks to exploit. 

 

“Financial service providers must not overlook the importance of software testing in the fight against fraud. By performing end-to-end testing of their platforms and applications, they can ensure that all their processes, features, and functionalities perform seamlessly.” 

- Cigniti

 

 

How Automated Testing Can Help Reduce ATM Fraud

Unfortunately, it is not easy to keep the components in a complex payment processing environment current and up to date. In fact, it can be quite hard to keep up with our normal workloads and fight fraud at the same time. 

Financial service providers that still rely on manual testing are at a significant disadvantage. 

Manually testing all the possible use cases in your ATM system is literally impossible - and the testing that you can do is very time-consuming and expensive for your organization. This is in contrast to the fraudsters who are continuously doing their own testing of financial systems to find vulnerabilities to exploit.  

One complicating issue here is the fact that many companies experience reduced productivity from the drag of technical debt (TD) associated with legacy applications, processes, and systems. 

Research from the Consortium for Information & Software Quality (CISQ) highlights the fact that TD has become the biggest obstacle to making any changes to existing code bases. On average, developers are now spending as much as 33% of their time addressing TD and by 2025, CISQ predicts that 40% of IT budgets will be spent simply dealing with TD. 

 

Automation Delivers Speed and Accuracy

To have any chance of keeping your ATM environment up to date and ready to deal with new fraud and security threats, your testing operations must have the right tools to respond with speed and accuracy. 

Testing automation greatly increases the speed at which tests can be run, reducing the time required to complete test cycles and respond to potential security threats. Automation also helps to minimize the risk of human error, ensuring that all tests are performed completely, consistently, and accurately every time - improving the security, reliability, and quality of ATM testing operations, as well as increasing resource productivity. 



automated-testing

 

 

Automation even makes it possible to interact with ATMs programmatically via the use of an API. This capability enables your testers to create and customize test scripts that are very specific to your organization and processing environment. 

Automated tests can be scheduled to run unattended at night or on weekends, then deliver comprehensive reports to your testers the next business day 

Effectively managing the ongoing battle against ATM fraud definitely requires close cooperation and communication between developers, testers, multiple business units, and other groups across the organization. Centralized management of results and reports, as well as access to test cards, scripts, and media, promotes collaboration and facilitates the efficient exchange of information. 

Not only is it essential to know who has access to what information, it is also critically important to know what they are doing with the information and when they are doing it. Internal fraud is rare, but not unheard of, so tracking and monitoring user behavior is also a requirement for managing any payment testing operation. 

It’s Time to Fight Back 

We know that criminals are everywhere and will continue to develop new and creative ways to attack your ATMs and take your money and data, so we must continue to find new ways to stop them. We know that they have easy access to their own sets of tools and resources specifically designed to help them be successful. 

We must be no less resolute in our efforts to stop them. 

 

“…nefarious entities relentlessly test and probe systemic weaknesses 24x7x365 to find information that can be used to conduct fraud...”  

- PaymentsJournal

 

 

A comprehensive testing strategy that includes the right tools and processes can help protect your organization in the fight against fraud. Testing speed, accuracy, and coverage can help shield you from fraudsters and be a true competitive differentiator. 

Interested in learning more about how to help improve the security of your testing operations? The Paragon team is here to help. Please reach out today.

 

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