Why are ATMs so rubbish?

Most ATMs in the UK are now running Windows, which is at least partially to blame for the lack of stability of today's ATMs.

To answer why they're so rubbish, we just need to look at the economics of an ATM. The software application component is typically less than 5% of the overall cost of an ATM when bought from the main ATM manufacturers. Until the advent of open standards, banks would source their ATMs and ATM software from a single supplier. ATM software has been chronically underinvested in over the last 10 years as the main ATM vendors view the market largely as an exercise in selling hardware. The move to Windows has only taken place over the last few years, as IBM’s OS/2 has been slowly dying off as the dominant ATM operating system (that's how far behind the ATM industry is, but at least it worked!).

A few factors are changing the way the market is thinking about ATMs and the functionality they are capable of:

• Recently introduced open standards (XFS) in ATMs are effectively commoditising the ATM hardware market by enabling the separation of software and hardware at the ATM, ie allowing them to be sourced independently

• Network infrastructure is now largely high bandwidth TCP/IP enabling proper software distribution (think graphics and branding) and a move away from the dumb terminal approach

• Software is becoming seen as the key differentiator to a bank's ATM service provision and is finally attracting a great deal more attention from the banks