Why Are So Many ATMs Running on Old Technology?

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Jan. 29 (Bloomberg) –- Tremont Capital Group CEO Sam Ditzion discusses ATM technology and security issues. He speaks with Erik Schatzker and Stephanie Ruhle on Bloomberg Television’s “Market Makers.” (Source: Bloomberg)

Is this issue going on, sam?

Thanks.

It's a pleasure to be here.

To put it in context, about 95% of the world's bank atm's run on the windows xp operating system.

An atm is essentially at its co re a regular computer.

It has different peripherals.

It hasn't been bad rather than at this right.

It's essentially -- it has a pin pad rather than a disk drive.

It is essentially a computer running on windows xp.

Microsoft will be ending its support of windows xp, which means 95% of the world's bank atm's will no longer receive important security patches and updates, which does create vulnerabilities starting april 9. sam, can i ask, why on earth are so many atm's running on software that came out in 2001? and at a time when microsoft is ending support?

This reminds me of the millenial bob.

Computers en masse were going to stop working.

It did not, because there was publicity and panic about it that companies around the world and individual users updated, installed the patch.

It's this not happening in the atm world --is this not happening in the atm world?

Is a great question.

There are two parts to the answer.

Yes, the atm has -- not been public for a long time.

Large businesses still run xp.

It is currently running xp and 30% of the market.

A lot of people have not upgraded.

I think the real commentary here is microsoft is really struggled to develop products that people want.

Xp was considered an extremely successful operating system.

It was very stable.

Years later, about seven years ago, vista came out, which really struggled to get anyone confident it was stable enough.

Windows 7, which came out nearly five years ago, has been good, but usually people wait a couple years before trusting it.

Now we have windows eight.

I think the reality is the next change will be upgrading to windows 7, but people have not really bought into the notion that they need windows 7. they still feel that xp for their purposes, running atm's, does the job.

What steps should security for the atm's be doing running up to april?

All the bank institutions around the world need to step up their game.

I think we have seen in recent weeks in recent months, financial fraud is getting increasingly sophisticated.

The i'm -- the reality as it is extremely disruptive to the u.s. and worldwide financial system.

I think banks should be doing two things.

Number one, they need to make sure they are up to date with any possible security procedures that they can possibly come up with.

And number two, they really should be running fire drills.

Come up with every possible scenario that could go wrong in regards to fraud, and be ready to jump on it as soon as there are any, even early indications brought has transpired.

Do you see any evidence the banks are doing this?

Candidly, i think there is a mixed bag.

There are a few different camps of financial institutions relative to their atm's. almost no one has upgraded to windows 7 as of yet.

95% of the world's bank atm's are still running windows xp.

I'm just thinking to myself, why doesn't ncr or a company like that step in with software that does not present the challenges that windows vista and windows 8 does, and just, you know, keep it , stupid.

Why does someone not right a program in lynn asked that tries to -- in linux that tries to accomplish it?

It's been a point of debate for over a decade.

You bring up a great point.

There are a lot of smart people out there who have said that maybe something like linux should be used for atm's. years ago before everyone move to windows xp, everyone was using the old os2 operating system at the atm's, which work very well for a long time.

Ibm shutdown support.

The benefits for something like xp over an older system is it offered more functionality and opportunity.

For example, more sophisticated marketing, advertising opportunities.

Also, some of the advanced functionality that you see it atm's today can be loaded and managed remotely, unlike some of the older atm's were you had to physically go out to an atm to make any changes.

All right, sam.

This text has been automatically generated. It may not be 100% accurate.

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