Banks and financial institutions are constantly under threat of robbery that could cause financial loss, lives, and reputation.
The Indian banking industry is going through several changes at present. The government recently merged some of them that remained independent for decades. Often there are concerns of operations at some bank or the other. We may see more privatization, increased use of digital technology, and concepts like neo banks.
These changes and the increasing number of branches and ATMs raise several security concerns. Banks and financial institutions are constantly under threat of robbery that could cause financial loss, lives, and reputation.
The current situation
According to the Reserve Bank of India (RBI) report, 230,000 ATMs are deployed across the country. Of these, 46 percent are deployed offsite, where the vulnerability of security breaches is very high.
Compared to the world average of 50 ATMs per 100,000 people, India only has 28 ATMs per 100,000, lower than several other nations. The introduction of several digital payment systems has helped reduce the reliance on ATMs to some extent, but they continue to remain a popular facility across the country.
“Though there is a significant increase on various methods of digital payments, ATMs remain a critical banking channel, and cash remains a preferred payment type,” explains Prakash Narayan Shukla, Head of Operations at Hemabh Solutions. “This increases the risks associated with security both on the physical and digital side. According to RBI, about 53 Crore transactions occur through ATMs and 52 Crore through POS in a month. The number of frauds during FY21 in private banks have risen by 21 percent.”
In 2018 the central bank noted that India’s banks lost Rs 235.96 crore in the last five years to burglary, robbery, and theft. That was a 70 percent increase. The National Crime Records Bureau also reported 2271 incidents in Banks and 3692 in ATMs in 2019.
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What banks need to consider
As banks continue to expand their footprint while pushing the digital drive further, security concerns on digital transactions and surveillance of ATMs/ branches at sites will be challenging for banks.
While siphoning money directly from banks through cyber-attacks requires highly skilled hackers, phishing attacks, skimming/cloning/stealing of payment cards/net banking identities/information could be done by criminals with less technical knowledge.
“Enabling strong security at ATMs which are more prone will need efficient surveillance system and deterrent practices,” Shukla pointed out. “Also, as observed globally, the number of incidents, including robbery and identify fraud, have spiked during the pandemic. As the saying goes, prevention is better than cure
. We need to have a “Prevention First”
mechanism in mind while building up the security system which acts as deterrence.”
In simpler terms, there should be a prevention-based strategy that goes beyond reliance on detecting security incidents. A robust surveillance system with the power of Artificial Intelligence-enabled cameras should become a part of any ATM infrastructure.
Prevention and the role of AI
The adoption of AI in surveillance will be a game-changer in security as it can enable a proactive prevention process to deter crime. This will also enhance the customer experience efforts of the bank.
“For example, facial recognition at the entrance of ATMs can alert the staff if anyone listed as a criminal in databases of banks and law enforcement agencies,” Shukla pointed out. “These systems can also inform the staff when any premium customer enters, and the management wants to offer personalized services.”
The AI can also detect jaywalking, loitering, and suspicious behaviors outside of ATMs and bank buildings. They can alert security operators if any anomaly is detected.
“For example, it can alert if someone is seen more than three times in a day, and this is important because that person might be doing a recce of the site to plan theft,” Shukla continued. “AI-powered surveillance also can detect person carrying objects such as an iron rod or gun. These tools can help the monitoring teams to remain more alert and proactive. Numerous such parameters are available, which can help proactively stop a crime that’s yet to happen through an AI-based surveillance system.”
There are also solutions integrated with AI-based surveillance systems that can lock the doors automatically if there is a security breach. They may also be able to spray cash with ink that would make them unusable.
Challenges to overcome when protecting banks
To best defend themselves from intrusion and fraud, banks must ensure they have a multi-layered security plan in place that includes leveraging the latest technologies to deter crime. This is the biggest challenge as banks are slow to accept new technology.
“It appears that adoption of new technologies lags behind the technological advancement with innovation taking place rapidly,” Shukla added. “We all know that the criminals get better at what they do with time. They keep checking and analyzing the security system and learn ways to compromise it. Unless banks stay one step ahead of the criminals, the risk is always high.”
Other challenges include those related to connectivity. For offsite ATMs, the telecom ecosystem needs to be robust for a consistent and stable network. At present, network connectivity, especially in far-off places, remains weak and creates a challenge in remote monitoring.