MORE commercial banks are upgrading their automated teller machines (ATMs) to not only shift transactions from their banking halls to the digital space, but to fight the growing threat of fraud by criminals looking to fleece everyday customers.

This comes as Finance Minister Dr Nigel Clarke commented on the additional costs banks face in Jamaica while the Government maintains its asset tax for financial institutions which have been increasing their fees and commissions along with repricing their loans from rising interest rates. Clarke made the comment in his budget presentation last Tuesday.

“In addition, Jamaica has a huge problem with crime, resulting in disproportionately high security costs to banks. Cheque fraud is staggeringly high, for example, and many banks no longer cash cheques in their branches as a result. This is an inconvenience. The scamming of credit and debit cards is also high, and the theft of entire ATM machines is not uncommon,” Clarke added.

While the Jamaica Observer wasn’t able to ascertain the value of fraud reported by commercial banks in 2021 to the Bank of Jamaica (BOJ) or the Jamaica Bankers’ Association (JBA), the BOJ did note that fraud-related losses in 2020 was $69.4 million. This includes cheque fraud along with credit and debit card fraud faced by customers. The last major cheque fraud attempts were with the Ministry of Labour and Social Security in December 2020 and with JN (Jamaica National) Bank in February.

With the advent of the novel coronavirus pandemic, cheques processed in Jamaican dollars by the banks’ proprietary systems and automated clearing house (ACH) have dropped by 36 per cent from $1.69 trillion in 2019 to $1.08 trillion in 2021. This was accompanied by a similar decline in volumes from 12.48 million units in 2019 to 7.02 million units in 2021. However, the BOJ’s real time gross settlement (RTGS) system saw a decline in value processed across the system from $23.32 trillion in 2019 to $21.44 trillion despite volumes moving from 1,033,923 to 2,852,668 over the same time frame.

The last major case of an attempt to pull an ATM out of its offsite location was in January 2018 at the JN Bank location on Old Harbour Road. Though the attempt failed, the move left thousands of persons without power due to the destruction of power lines on that thoroughfare.

“The incident occurred at the JN Bank ATM located off Old Harbour Road in Spanish Town, St Catherine. The machine was vandalised, and an attempt was made to remove it. However, no cash was accessed from the machine by the vandals. There have been several other attempts of vandalism and theft since then, but none have been successful or have resulted in the loss of property. We continue to ensure that we implement additional measures to enhance security that keep us ahead of the perpetrators,” replied Athaliah Reynolds-Baker from JN Group’s corporate communications division to the Business Observer.

Although an ATM’s cost isn’t generally mentioned here in Jamaica, sources explained that an ATM can run from US$60,000 to US$75,000 ($9.3 million-$11.63 million) depending on the features of that ATM. This doesn’t include the operating costs of that location whether on-site or off-site. BOJ data shows that the number of ABMs (Automated Banking Machines) across the island has grown from 755 in 2019 to 793 at the end of 2021.

JN Bank is increasing its spend on technology to ensure that its clients are protected and have a wider array of options to access their money. This includes the ability for clients to make cash deposits and loan payments without the need for a debit card.

“All our ATMs have various security devices and enhancements that protect them against skimming and all forms of fraudulent activities. All JN Bank members should feel very safe using our ATMs, given our investments in new technology through strategic partnership with MC Systems, the JN Group’s technology arm,” Reynolds-Baker added in the email response.

Even Sagicor Bank Jamaica Limited (SBJ) is stepping up its efforts with plans to add more ATMs across the island at various locations and upgrading on-site ones to be on the cutting edge of technology. This includes the addition of a contactless feature to ATMs so that a bank customer doesn’t have to insert their card into the machine and the ability for deposited cash to be instantly credited to customers’ accounts.

“We are constantly assessing and identifying ways of providing a safer and more secure means of banking for our clients, and the upgrade to our operating system supporting our ABMs, with anti-skimming devices, as well as adding contactless points to all our ABMs, are all part of enhanced security measures to help protect our clients. We currently offer credit cards that are chip and contactless enabled and these new machines will serve our clients. Our chip and contactless debit cards will be rolled out soon,” said chief executive officer of SBJ Chorvelle Johnson Cunningham.

Even Scotia Group Jamaica (SGJ) president and CEO Audrey Tugwell Henry highlighted at the company’s annual general meeting last week that it now has 280 ATMs across the island with 102 immediate deposit machines. She also added that they have more security stationed at the on-site ATMs to ensure that the bank’s property is properly protected.

ATMs currently make up 31 per cent of the Scotia Group’s transaction channel mix. SGJ spent 20 per cent more on technical and support services to $5.07 billion for 2021. SGJ spent 7 per cent more on asset tax in its first quarter of $1.36 billion.

First Caribbean International Bank (Jamaica) has started to retrofit its various ATMs across the island to also include contactless acceptance plus the ability to deposit cheques without envelopes. This has even seen the redevelopment of its Manor Park brand layout and other locations.

JMMB is upgrading its ATMs in both Jamaica and Trinidad and Tobago to the latest ATM types, to match the features of their customers’ Visa debit cards and need for customers to transact on the go. JMMB currently doesn’t charge customers to use their cards at any ATM. JMMB is now with one less ATM after someone set their Habour Street machine on fire in January.