Wells Fargo & Co. last week said it has completed a five-year project to Web-enable its 6,200 ATMs in 23 states. The Windows-based infrastructure is designed to allow Wells Fargo to update its entire network remotely when it needs to do things like add new languages and enable customers to make envelope-free deposits.
The San Francisco-based bank said it also installed more than 3,000 online stations in its 6,046 branch locations. The WebATM machines and online stations are part of a strategy to integrate all channels -- stores, phones, automated teller machines and the Internet.
Jonathan Velline, head of Wells Fargo's ATM banking, said the biggest challenge was the amount of internal software development needed to migrate the bank's ATM back-end systems from OS/2 to Windows. Another hurdle was tightly integrating the ATM back-end systems with those of other business units, such as branch and online banking.
Complete Integration
"We want to make sure our ATMs are integrated with every other channel, so when I do a deposit in a [branch], I want to be able to go to an ATM immediately and see that deposit," Velline said. A less-technical hurdle was replacing all of the ATMs with higher-performance models.
Bill Sentenac, a senior vice president of technology in Wells Fargo's services division, said the bank used J2EE to develop the middleware layer that integrates the Windows-based ATM platform with its back-end systems. The bank uses XML to communicate between various backup platforms.
Wells Fargo claims to be the first bank to have fully Web-enabled its ATM infrastructure.
Sentenac said he's concerned about the security of Windows, but no more so than he was with OS/2. He said Wells Fargo took all "the rational steps you'd take to harden any operating system," such as closing unused ports. "The reality is, you can't buy a new ATM that runs OS/2," he said.
Velline said 51% of the bank's checking accounts are accessed online, and Wells Fargo customers are conducting as many transactions at ATMs as they do with branch tellers.
Wells Fargo claims it is the first bank to have completely Web-enabled its ATM infrastructure. According to research by Needham, Mass.-based TowerGroup, 30% of the world's ATMs will run on Windows by 2006.
Bank of America Corp. said last week it is also rolling out Web-enabled ATMs. Its 3-year-old project has Web-enabled 3,500 of its 16,500 ATMs, a spokeswoman said.
Another benefit for Wells Fargo is that its newly installed ATMs use the Triple Data Encryption Standard, an upgrade that's now required by credit card companies and related funds-transfer networks, such as MasterCard International Inc. and Visa U.S.A. Inc. The network providers established deadlines starting last year for converting electronic funds networks to Triple DES. The current standard, DES, has become vulnerable to hacking attacks as a result of increases in computing power.
The total cost of replacing ATMs can be high. A new ATM can cost as much as $50,000; upgrades can range from $1,000 to $5,000, say financial industry analysts. Hardware security modules, which sit on transaction servers and process DES keys, can cost up to $50,000 each.