Despite Security Concerns, Operators of ATMs Prepare For Move To Windows

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Look for ATM upgrading to run willy-nilly in the next couple years as most credit unions are pressed to move operating systems to Microsoft Windows.

"The ATM industry is forcing every one of us down an upgrade path," said John Shipe, chief information officer at Alaska USA FCU.

Alaska USA announced today it will replace its IBM software for ATMs with the Windows-based VISTAatm terminal software, provided by London, Ontario-based Phoenix Interactive Design, Inc.

The migration will take the CU's fleet of 112 NCR ATMs to the Windows XP operating system from IBM's OS/2 by mid-2006 to cap off what will be a two-year ATM hardware and software replacement project, Shipe continued.

IBM announced in July it will bury the prevalent OS/2 operating system at year's end and cut off product support by the end of 2006.

That's big news for credit unions: About 80% of CUs run their ATMs on Big Blue, according to Raleigh, NC-based Nexus Software, which provides retail banking middleware, and Atlanta Computer Group ATM Remarketers, which sells refurbished ATMs.

Credit unions that wait to migrate could get caught with their ATMs down.

"When the mass move to Windows takes place, small credit unions could get trampled," said Scott Anderson, director of Business Development and Client Services for Phoenix Interactive.

"Alaska USA has been proactive, putting a lot of time and effort into thinking about the Windows environment and enterprise management issues," Anderson continued. "Credit unions that wait to upgrade may have to make some hard and fast decisions."

Shipe said the time is ripe for CUs to focus on the ATM operating system scene. "Any credit union that has a deployment of ATMs needs to pay attention to strategy or else risk being caught flat-footed."

For many, the move to Microsoft will be made with reluctance and defeat. Most CUs can't consider alternative systems-Linux- and UNIX-supported platforms are too demanding for many IT departments.

Raft of Potential Problems

Yet the Microsoft system is notorious as a target for cybercrime and system failures.

Therefore, CUs need to hash out how they're going to handle Windows' deficiencies, Shipe said. "Windows introduces a whole new raft of security- and reliability-related problems that are going to require proactive management," he said.

Alaska USA's IT team is preparing for the onslaught on ATMs by sparring with vulnerabilities on its existing Windows-based desktops.

The $2.9-billion CU has learned how to maximize Windows-based ATM security and reliability on its desktops by automatically locking down unauthorized or nonessential applications and instantly pushing out virus updates and patches.

"We'll take what we've learned on the desktops and apply it to the ATMs," Shipe explained.

Though the Windows world brings a host of headaches, Shipe said there will also be features to enjoy for the CU and members alike.

"We think we can enhance the member experience via the Phoenix platform," he explained. "Our new platform will enable us to conduct targeted marketing and cross-market our other channels, including homebanking and kiosks, in order to convey a consistent message to our members. We'll also be able to meet regulatory requirements, particularly the American Disability Act, and take advantage of opportunities created by Check 21."

Anderson also turned the tables, envisioning the move to Windows as a potential competitive advantage for CUs over banks and a "great opportunity for credit unions to be leaders in bringing more features to members through a self-service channel. The capabilities provided by Windows could offer a quick way to win market share in the ATM space before the masters of the universe do something with the channel first."

CUJ Resources

For info on this story:

* Alaska USA FCU at www.alaskausa.org

* Phoenix Interactive at www.phoenix-interactive.com

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