ENISA said banks are currently at a "delicate transition stage" whereby overlooking the risks to automated teller machines (ATMs) means losing ground in a critical fight that is important to every nation's economic system.
Generally speaking, once ATMs installed, they are poorly managed and rarely updated, according to the report "ATM Crime", released Monday.
European banks in 22 countries lost a collective ?485 million [m] due to ATM fraud in 2008, according to figures released earlier this year from the European ATM Security Team (EAST), a nonprofit group composed of financial institutions and law enforcement.
A total of 12,278 attacks were reported on ATMs, which represented a 149 percent increased over 2007, EAST said. The most common attack was "skimming," or attaching equipment to an ATM that records a card's magnetic stripe and then using surreptitious means to capture a person's PIN (Personal Identification Number). Then, a blank ATM card can be programmed with those details and used for fraudulent transactions.
Close to ?400 million [m] (US$695) of the fraud occurred outside the country was the card was issued. That's because around 90 percent of European banks now use chip-and-PIN cards, also known as EMV cards, where the ATM, as well as most point-of-sale devices, check to see if the card has a special microchip.
But many machines in countries in countries that don't use chip-and-PIN won't check for the chip and rely solely on the magnetic stripe and PIN to authorize the transaction.
While banks have taken measures to make their ATMs more resistant to skimming and educate consumers on how to notice tampered machines, there are variety of other weaknesses in ATM systems, ENISA said.
"ATMs often now use publicly available operating systems and off-the-shelf hardware, and as a result are susceptible to being infected with viruses and other malicious software," ENISA said.
Many machines run on Microsoft's Windows operating system. Patches have to be tested and licensed by the manufacturer of the ATM, making an additional obstacle in keeping the machines up to date. It increases the chance that ATMs -- which often have unencrypted links with banks' back-end systems -- are more vulnerable to worms and malware. For example, some Diebold ATMs became infected with the Slammer worm in 2003, ENISA said.
Earlier in the year, some sophisticated malware was discovered on ATMs in Eastern Europe. It recorded the magnetic stripe information on the back of a card as well as the PIN (Personal Identification Number). The collected card data, which was then encrypted, could be printed out by the ATM's receipt printer. That printout could be obtained through a hidden software control panel displayed after the thief inserted a special card into the machine.
It hasn't been revealed how the malware was installed on the ATMs in Eastern Europe. But ENISA warned that ATMs positioned in unprotected areas with accessible power connections and network links makes it easier for an attacker.
"Security issues related to the ATMs are too often not recognized," the report said. Very few banks, if any, have conducted a formal and complete security risk assessment of their ATM infrastructures, according to the report. "The use of the concept of 'security through obscurity' that has long gone along with dedicated devices is conceptually wrong, and is proving to be so as the global trend of bank fraud rises."