Automated Teller Machine - Term Paper Example

Automated Teller Machine (ATM) Insert Insert Introduction ATMs have been on the increase in the number of ATMs across Africa and theworld as a whole consequently probing questions into problems that come with them and their needs. It, therefore, is important to look at some of these problems and attempt to offer solutions for the future of ATMs. The research paper looks at what an ATM is the historical background of the ATM, the functional requirements of the ATM system and problems that come with the use of automated teller machines. In addition, it presents their solutions and gives a conclusion on automated teller machines. Haag Cummings and Rea(2004) state that Automated teller machines are electronic telecommunications device that enables the clients seeking the transactions of a financial institution to perform financial transactions (Cummings et al., 2004). It achieves this without the need for human cashier, clerk or bank teller. According to Anand (2006), ATM is a banking terminal capable of linking customers with 24 hours deposit and withdrawal services for the clients at any time (Anand, 2006). The ATMs or cash dispenser devices are installed in the bank halls and spread across the city or specific locations for convenience of the customer. They mechanically accept deposits; give withdrawals, transfer funds between varied accounts and issue bills. The very vital factor that makes customers want to use the ATM is the convenience it offers, ready availability of machines and for the security, it offers. Historical Background Over the past years, many people have tried to claim that they are the investor of the ATM; others believe that Luther George Simjian is documented to be an inventor due to his idea that came first. Some believe it was Don Wetzel, some other people say the inventor is John Shepherd-Barron. In the late 1930’s, Luther George Simian tried to build an ATM but it was not a successful version of ATM. The author did not register related patents; initially designed with the idea of creating a hole in the wall. It was allowing customers to make financial transitions without going to the bank. However according to BBC London (27 June 2007), on the topic Enfield’s cash gift to the world indicated that the first of these that decided to roll out the technology was the Barclays bank. It is located in Enfield town towards the northern part of London,in the United Kingdom on 27 June 1967. The machine was the first in the world. English comedy actor Reg was the first person who made use of the ATM (BBC, 2007). Networking The art of linking the different ATM devices to a central computer is a common occurrence at the moment. The idea came into reality when the world wide web and the internet were rolled out. Banks keep databases of customer records of cash transactions. At any ATM point, the customer can provide verifications, and the device looks up the data records in the database provided by the bank. The entire time requirement is in split second because of the digitalization of signal processing. It has brought about flexibility, ease of use and instant feedback on customer query wherever they are accessing their bank information. The technology requires that an individual is provided with a smart card developed with a microchip that contains customer information (Anand, 2006). There has to be access to the ATM for one to access the bank details and be able to carry out a transaction successfully. Functional Requirements The functional requirements for this paper are based on a rather startup banking Sacco going by the name Kibz that intends to implement twenty Automated teller machines on all of its branches. Assumptions The system gives the customer the mandate to check balances, deposit cash to their accounts, withdraw cash from their accounts, and they can make the transfer of cash between the accounts linked with their card. The system to be implemented will only take in cards from participating banks and credit cards organizations. All the Automated teller machines will be used at a go. The system will be interfaced with respective participant banks and credit facilities. The customer is only liable to payments connected to their personal accounts The system has to verify if there is cash in the account before allowing money to be dispensed to the specified customer. Functional requirements According to Bjork (1998), the functional requirements of the Automated teller machines include but are not limited to the following: Acceptance of the ATM card by the machine Entry of the personal identification number, which is usually a 4-digit number to authenticate the owner against on the system. System provision of a list of transactions the user can select from. They include verification of the accounts balance, depositing cash to the account, withdrawal of cash from the account, transferring funds and making payment for bills. The ATM then relays the information to the correct ATM financial system, which then gives feedback, inform of permission or denial of service. The ATM will then update the changes to the respective banks financial system for ATM processing or otherwise send an electronic fund transfer to the appropriate organizations for the credit card transfers. Based on the user’s request, a receipt of the transaction could be printed out for them. The user will be prompted for another transaction; otherwise, the system prepares for the next customer by logging out the current user from the system. There are a number of data constraints including existence of the 4 digit pin and account numbers embedded in the card. The ATM cards connect to more than one account and formatting of data in Electronic data interchange format. It is in preparation for transfer to other financial organizations for the respective case (Bjork, 1998). Problems that come with ATM’s Automated teller machines come with lots of benefits especially to financial institutions and to the public as a whole. Despite the advantages, ATM has also come with challenges alongside. It has been illustrated by Whittaker and Introna (2006) when he maneuvers around the political struggles through the insecure ATM, the talking ATM, the cashless ATM and the charging ATM. His point is that of an ATM being a cybernetic that needs configuration and reconfiguration through a number of political translations (Introna, 2006). The problems that come with the invention of ATMs include locating the ATM, accessing the ATM, being able to read the instructions that only leaves room for the elite in the society. They include cases such as locating where to insert the ATM card and reading the screen is difficult for some other people. Further, some people are not even conversant with the keyboard leave about being able to it. Modern ATM’s use touch screens whose sensibility varies and is sometimes very difficult for persons with deformed hands to use because the system does not recognize them. It also applies to the disabled people who may lack hands or cannot see. Retrieval of cash from the ATM is also a challenge to other people whereas some cannot even interpret what appears on the receipt generated by the ATM. Commonly you will see users stranded because they cannot get back their cards after use (Introna, 2006). There is also a shortage of ATMs to the general public populations whereby many people will crowd at one location commonly in urban areas while the majority of the local areas have none. ATM’s are not free to use. The transaction fees in various banks are very high and exploit the customers of their hard-earned cash. The ATMs also power dependent so, in case of power disturbance, power shortage or unavailability of power, the ATMs are useless to the public. Power is also very expensive or nor even available in some areas that make it impossible for this ATM systems to run in such geographical locations. The ATM as an industry is facing many challenges from another money transfer means especially the mobile money transfer. It is because most areas cannot be reached, exorbitant bank charges, inadequate financial understanding and the general lack of infrastructure. Mobile phones are becoming very handy and adored in most remote areas, and there is a high probability that they will overtake the banks because of the following reasons (Emegwali, 2009). First, ATM cards are issued in the respective banks, which require ones physical presence as compared to mobile money transfer whose procedure can be carried out on the phone and is free of charge. Delay in issuing of cards, convenience, versatility and it is more secure to transfer money via a phone because it does not require any movement from ones location. Solutions to the problems facing ATMs Having noted that ATM faces many challenges ranging from fraud, usability, availability and convenience, this section proposes a number of solutions to the above-mentioned challenges. The various solutions can further be categorized into machine oriented, administrative and user oriented. Users of the ATM should first stop asking assistance from other people on how to use their ATM cards since they leave vital information at the mercy of those helping them. To add on that, they should not reply to defraud messages requesting for details of their PIN numbers or their account details (Emegwali, 2009). Pin numbers should be kept secret at to the sole awareness of the individual owner of the card. This in a way means that how we keep and where we keep our cards is of utmost importance. ATM’s also break down just like any other machine would. It is, therefore, a call for the financial organizations to have a plan B in case such a thing occurs. For example, they can increase the number of ATM’s at various points and have very prompt response plan to have the system up and running. It is very much tied to the network problems linked to the service provider, which denies the customers the needed uptime period (Odachi, 2009). It is also undeniable that these machines would run out of money and cost the customers a lot of time waiting. It calls on the financial organizations to keep stringent monitoring on the vault and have it replaced sooner than the customers can even realize. There is also the part that has to be played by the bank, the government and network providers. It is what is referred to as administrative solutions. After negotiations, they should come up with legislative measures against robbery cases and cyber criminals by engaging the security operatives. It includes securing locations that they ATMs are located. The location of the ATMs should allow for natural surveillance apart from installing surveillance cameras and even mirrors within and around the ATMs (Odachi, 2009). Improvement of technology by the banks also goes a long way to helping deter offenders. Finally, banks should also roll out a sensitization program to enlighten on the safety measures, precautions and general usage of the ATM. Conclusion ATM’s are very pertinent to any nation that embraces growth and development. The benefits that they have brought are massive including the reduction of the bank queues as it was traditional. Customers can now withdraw, deposit, make transfers at their disposal and are not limited to the bank timing. Although this ATM has come with many benefits, it encounters many challenges ranging from usability, fraud and technological challenges. If these challenges can be minimized if not done away with, then ATM’s is such an excellent innovation of our time. Networking is the best approach to making the world a global village. It brings the technology to people. When the protocols that are associated with the linking of the computers, communication equipment is mastered and a compatible hack free platform developed, the world will ceaselessly drift to becoming a safe place to live. With the pace, that technology advances so does the crime rate. Solutions sought for should keep in mind the evil aspect of providing solutions to humankind and try to avert before catastrophe looms. References Anand P. (2006): Dictionary of Computer an Information Technology, New Delhi, Academic Publishers, pp. 26 Bjork, R., C. (1998). Requirements for example ATM system. Available from http://www.math.gordon.edu/courses/cs320/ATM_Example/Requirements.html Emegwali P. (2009): Around the Globe, Technology Widens Rich-Poor Gap, A paper Presented at the African Diaspora Conference in Tucson, Arizona (http://www.philipEmeagwali.com) BBC London (27 June 2007). “Enfield’s cash gift to the world." Haag, S., Cummings M. and Rea A.I (2004): Computing concepts, New York McGraw-Hill, pp.431. Odachi G.N. (2009): Cyber Threat: An Impediment to ICT Development in West African sub-region, Proceedings of International Conference on Research and Development, Vol 2 No 15, Cotonou, 2009. O Leary T.J and OLeary L.I. (2005): Computing Essentials: Introductory Edition, McGraw Hills, New York p. 302. Pfleeger, S., L., and Atlee, J., M. (2006). Chapter 4: Capturing the requirements. Software Engineering Theory and Practice (third ed.). Upper Saddle River, NJ: Pearson Education, Inc. Read More