Wells Fargo Web-enables 6,200 ATMs

The Windows-based infrastructure enables remote upgrades

Wells Fargo & Co. announced this week that 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 and add services such as new languages and envelope-free deposits to its entire network remotely.

The San Francisco-based bank said it also installed more than 3,000 online stations in nearly all of its 6,046 branch locations. The WebATM machines and online stations are part of the company's strategy to integrate all channels -- stores, phone, ATM and 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 operating system from OS/2 to Windows. Another hurdle was tightly integrating the ATM back-end systems with other business units, such as branch and online banking.

"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. "The other hurdle we faced that was less technical was the machines themselves and the service model out in the field. The machines installed weren't up to the processor speeds we needed, so we had to physically go out and swap out those machines."

Bill Sentenac, a senior vice president of technology in Wells Fargo 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 then uses XML to communicate between various backup platforms.

"The reality is the ATMs don't use XML today. They use a proprietary messaging [platform]. But the entire company is moving towards XML. Our own template we call WFXML," Sentenac said.

WFXML includes a Simple Object Access Protocol implementation, which allows a program running on one operating system, such as Windows, to communicate with a program on another, such as Linux.

Avivah Litan, an analyst at Gartner Inc., in Stamford, Conn., said ATM fraud will likely pick up because of the move by most banks to Web-enabled systems, "because of the combination of stealing ATM numbers online and creating counterfeit ATM cards to use off-line." Litan also said the move to Windows-based systems is "not great news for the security of the system. I'm sure there's a lot of holes that will be created because of this."

Sentenac said he is concerned with the security of his Windows-based systems, but no more so than 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. But, "the reality is you can't buy a new ATM that runs OS/2. This is where the industry is," he said.

Velline said 51% of the bank's checking accounts are accessed online and its customers are conducting as many transactions at ATMs as they do with branch tellers.

Wells Fargo claims it is the first bank to completely Web-enable its ATM infrastructure. According to research by TowerGroup, only 30% of the world's ATMs will be running on Windows by 2006.

Wells Fargo's new WebATM machines feature six language screen options, provide access to 22 different financial accounts and offer the highest level of security the bank has had to date.

Another benefit for Wells Fargo is that its newly installed ATM machines all use the Triple Data Encryption Standard, an upgrade being 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 the 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; costs will range from $1,000 to $5,000 for ATMs that can be upgraded, according to financial industry analysts. Hardware security modules, which sit on transaction servers and process DES keys, can cost up to $50,000 each.

Copyright © 2005 IDG Communications, Inc.

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