‘Windows 10’ ATM Upgrade Hangs Over CUs as 2019 Launches

Image of customer transaction at an ATM

A major software-upgrade problem for credit union ATMs that started brewing in 2018 is now a top priority—or perhaps should be—for many credit unions as 2019 kicks into gear.

Credit unions have less than one year to make significant software upgrades, core-processor upgrades, or perhaps purchase completely new ATMs depending on their individual situation, budget, and strategy. Microsoft has rolled out Windows 10 software and won’t offer functionality updates, technical assistance, and “patches” to financial institutions using old Windows 7 software as of Jan. 14, 2020. After this, Microsoft will only offer “critical” security updates to ATMs with older software.

Thousands of credit union and bank ATMs across California, Nevada and elsewhere are due for this upgrade, an issue gaining attention due to its compliance-security and vulnerability implications for credit union members.

Although the forced upgrade affects all types of ATMs (automated teller machines) and ITMs (interactive teller machines) across the world, FTSI has a unique look since it is the largest third-party ATM solutions provider and servicer on the West Coast. The company’s average upgrade job is for a credit union with 15 – 25 ATMs, although it’s assisting smaller and larger credit unions as well.

“If you look at where some of the ‘jack-potting’ and malware attacks at ATMs is happening, it’s on machines that aren’t up to date from a security standpoint—especially machines that were never updated from Windows XP to Windows 7 back in 2012,” said Travis Hoban, chief technology officer for the Monrovia, CA-based company.

New “Core” Versus the Alternative
Most credit union ATMs need a new “PC core” (a core operating system) to run Windows 10. But some credit unions will opt for less expensive and intrusive software options that act as a sort of transitional “bridge.” Whatever option is chosen, upgrading expenses cost between $7,000 - $15,000 per machine depending on the type of machine, as well as which “upgrade” a credit union chooses or can afford (assuming an upgrade can be done) and other factors.

Some credit unions started acting last year; others are just now starting; and others are waiting but realize they need to move quickly. The cost could range between $350,000 - $750,000 for credit unions with large ATM fleets.

While certain credit unions may opt for replacing entire ATMs, manufacturers such as NCR, Hyosung, Diebold, Triton and others are experiencing backorder delays of 4 – 6 months in some new-order cases. “If a credit union comes to us or goes somewhere else, and they only have a few months left to get their machines upgraded, they may not hit the Windows deadline,” Hoban said. “The time to plan is now.” Besides having new hardware, the newest ATMs are faster.

So what will Windows 10 accomplish? Enhanced functionality for starters—such as connecting and communicating with customers’ mobile technology (smartphones and watches) for transactions without using a card. Additional features will bring ATMs into the modern-technology fold with more usability and convenience.

Historical Context and Windows XP
However, the last Windows upgrade in 2012 (from Windows XP to Windows 7) wasn’t easy, even though it was only software-related, not hardware. “It was quite chaotic,” said Bo Watson, vice president of field operations for FTSI. “All the machines had to be totally reloaded with software. To get everyone reloaded by deadline, we had to use pre-loaded hard drives and swap them out in machines in the field—so we had less time onsite. We had an army of technicians going out just to do the upgrades and not the usual service calls.”

He said this time is even more difficult, especially if a credit union doesn’t choose to upgrade its ATMs’ “PC core.” They would have to reload from scratch, taking 10 – 12 hours depending on how many add-ons they need to complement the Windows 10 software.

“There will definitely be some stragglers,” said Watson about credit unions choosing any option, but especially the ones acting later rather than sooner. The best-case scenario: a credit union has budgeted, planned early, and received its hardware for implementation, and it’s as simple as loading the new software and having the entire network ready. The middle-scenario: a credit union at least has its hardware on order, which can be pre-loaded or staged in a warehouse (with an eye on lining up dates for the software upgrade soon).

The worse case? “You wait until the last minute and scramble—and you’re out of compliance,” Watson said. “You’d have to purchase an extension from Microsoft, but you’d still be out of security compliances, PIN encryption, and PCI compliance (Payment Card Industry).”

‘Windows 10' Migration Webinar
You can sign up for FTSI’s "Windows 10 Migration Webinar" (Tuesday, Jan. 29 at 9 a.m. Pacific) to learn more about:

  • Migration timeline
  • ATM and ITM software updates
  • Windows 7 extended support
  • Network certifications
  • Field implementation process

Most Windows ATM migrations typically take between 12 - 18 months to deploy.

‘Windows 7’ Extended Security Update Program
Microsoft will extend support for Windows 7 if needed, but only for “critical” updates. The following will be used:

A bridge for ATMs/ITMs that won’t be Windows 10 ready by January 14, 2020.

  • NCR is offering a one-year extension, which ends Jan. 13, 2021.
  • It addresses issues Microsoft identifies as critical.

This requires:

  • NCR software maintenance contract.
  • A signed order for Windows 10 application software and/or XFS.

Ordering is at the “unit” level:

  • Only order for those terminals that won’t be on Windows 10 by Jan. 14, 2020.

Microsoft’s announcement from September 2018:

  • “Today we are announcing that we will offer paid Windows 7 Extended Security Updates (ESU) through January 2023. The Windows 7 ESU will be sold on a per-device basis and the price will increase each year. Windows 7 ESUs will be available to all Windows 7 Professional and Windows 7 Enterprise customers in Volume Licensing, with a discount to customers with Windows software assurance, Windows 10 Enterprise or Windows 10 Education subscriptions.”

For questions, email Travis Hoban at FTSI.

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