How Can Incorporating Blockchain and IoT in ATMs Secure Your Business in this Digital Age?

Key Takeaways:

• Introduction
• Role of blockchain and IoT in boosting ATM security
• Automated teller machines and MSMEs
• Key acquisitions in the domain

The invention of automated teller machines (ATM) was a revolutionary step that changed the concept of accessing money and interacting with banks. In today’s digital age, these self-service automated machines have provided the convenience of withdrawing cash, located at nearly every street corner. In 1967, the first ATM was introduced by Barclays Bank, promoting the idea of self-service banking. Previously, people used to visit bank branches during business hours to perform transactions. It caused major inconvenience for those who worked during the same hours as those of banks. However, ATMs now help individuals overcome these barriers and allow them to withdraw cash and perform other banking transactions 24 hours a day. In this article, we will discuss how modern technologies can enhance the capabilities of these automated banking machines and revolutionize the financial ecosystem.

How can blockchain and IoT improve the security of automated teller machines?

In recent years, ATM fraud incidents have become an emerging concern for banks. The illegal withdrawal of money from these automated machines has been performed by criminals by using a Raspberry Pi. Raspberry Pi is an affordable microcomputer that can perform the same tasks as a standard personal computer. It is a valuable tool that is mainly designed to facilitate education, however, it has been recently used in such illegal activities. Generally, ATMs are subjected to two types of attacks, one is physical, and the other is logical attack. Physical attacks encompass a range of tactics which include the physical removal of machines from their location or using explosives to extract money from the machines. Logical attacks refer to the unlawful methods of taking out cash by manipulating ATM software. Such attacks can be classified into two sub-categories – malware-based attacks and black box attacks. Several other forms of cyber-attacks include data sniffing attacks, skimming with spoofing attacks, and more which can be performed by altering the ATM firmware.  

Despite implementing multifaceted security measures in these self-service machines, their exploitation continuously surfaces in the media. To combat such issues, especially to address the logical attacks on ATMs blockchain technology can act as potential solutions. Blockchain technology can enhance cybersecurity, ensuring heightened privacy protection. According to recent research, ATMs can be conceptualized as interconnected devices by incorporating the Internet of Things. Banks can establish their private permissible blockchain network within which their ATMs and other access points can be interlinked. This can offer secure communication among devices within the network, enabling banks to identify any anomalies easily. During any event of a malware-based attack, the ATMs get disconnected from the network, this can help banks to take immediate actions, promoting their operational efficiency and uninterrupted functionality.

How can automated teller machines ensure effective cash access for MSMEs?

Nowadays, easy access to cash plays a major role in helping businesses, especially small and medium-sized businesses to pay their vendors and staff. However, the dwindling presence of ATMs in some cities is becoming a huge concern for MSMEs. Being a reliable access point, having an ATM in proximity can be highly beneficial for small businesses. Despite many banks encouraging these businesses to open bank accounts through various government schemes, the presence of ATMs builds more trust among these businesses. This is mainly because ATMs offer a sense of security and convenience, allowing businesses to immediately access cash whenever needed without disrupting their operations. Moreover, small businesses are not urged to adopt government schemes and digital solutions, they always look for readily available sources of cash in their area. Moreover, as small businesses involve small amounts, their customers are hesitant to adopt digital banking methods. This is the main reason why MSMEs especially in rural and semi-urban areas, need access to credible cash sources to run their business smoothly.

Alliances and acquisitions that can propel your business forward

The automated teller machine industry is experiencing significant growth and is predicted to rise at a CAGR of 8.6% from 2023 to 2032. To stay ahead in the competitive landscape, many leading players in the domain have made profitable alliances. For instance, in January 2024, Hitachi Payment Services, a leading provider of cash payment solutions announced the acquisition of the cash management business of Writer Corporation, a leading multi-business enterprise. This acquisition would enhance the offerings of Hitachi by making it a leader in providing payments and commerce solutions.

Another example is the FirstCoin ATM and Phoenix Crypto by RockItCoin, a leading Bitcoin operator. With this acquisition, the company aimed to expand its network opening 78 ATMs in over 2,000 locations nationwide. The ATMs operating under FirstCoin ATMs in California and Texas will now operate under the RockItCoin brand, enabling former customers of both companies to access RockItCoin’s products and solutions.

To sum up, the increasing demand for convenient cash withdrawal systems among individuals across the globe is the prime factor that will drive the domain with immense opportunities in the future. Moreover, the increasing advancements in ATMs to offer multiple banking services will increase their demand in the coming years.

To get detailed insights into the automated teller machine industry and comply with industry regulations, policies, and standard operating procedures, contact our esteemed analysts today!

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