03-05-2012, 01:13 PM
ATM & BIOMETRICS: A SOCIO-TECHNICAL BUSINESS MODEL
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Automatic Teller Machines (ATMs)
ATM innovation paralleled the growth of the PC and telecommunications industries.
Each machine operated in a local mode without any connection to the banking systems, and
transaction authorization took place based on the information recorded in the magnetic bands
of the cards. The next step in the evolution of this industry was to connect these devices to
the bank’s centralized systems; by then, mid -1980’s, banks would work in a dual modality, in
other words, the ATM would work on-line but in the event of communication loss it had the
ability to authorize the transaction with the information recorded on the magnetic band.
Cards with Magnetic Bands
The plastic cards with magnetic bands date back to more than 30 years. The financial
sector has used them as a means to making payments and to offer access to the financial
services for clients. The magnetic band contains unique information for every card allowing
for user identification and providing access to its products through the various electronic
channels. In order to provide access to these products, cards with magnetic bands are
normally associated to a personal identification number (PIN) which is initially assigned by
the entity issuing the card and, in some cases, the client can then change it at his/her
convenience. The card and the PIN are directly related to the user identification and allow for
the utilization of electronic channels just like as is the case with the ATMs.
ATM Hardware and Software Characteristics
We may classify the hardware for an ATM in two major categories: the first one,
corresponding to its PC architecture (a microprocessor, memory, drives, monitor, keyboard,
etc.), the second one related to ATM specific functions such as card reading, cash dispensing,
cash storage, user and operator’s video and keyboard interaction, etc. Based on the PC
architecture, the software included in an ATM is not very different to that which is found in a
personal computer. It has an operating system (OS/2, or Windows based). The
telecommunication system is today mostly oriented to services based on the TCP/IP protocols.
The application software is most of the time provided by the manufacturer of the ATM
machine. It normally offers an interface allowing for each financial institution to adapt its
own applications.
Transaction Functionality
We have described the various elements that intervene in an ATM transaction, the
card and the ATM components. Figure 1 shows the sequence of events involved in the
authorization process together with the functionality of the central authorization system to
which the ATM is connected.