In addition to all of the everyday risks banks and credit unions need to guard against, the COVID-19 pandemic resulted in a significant increase in ATM thefts across the country. The spike hasn’t been surprising due to a number of factors, but the costs and damage resulting from these attacks are often considerable. Fortunately, there are steps banks and credit unions can take to help prevent becoming a victim of ATM theft.

During challenging financial times when people are facing desperate situations, there is usually an uptick in bank robberies. There was an increase throughout the 2009 recession, for instance. With the pandemic in 2020, there was an increase in the U.S. unemployment rate, with more people out of work and ample time on their hands.

Because COVID limited the number of people permitted in indoor facilities – or prevented them from entering altogether – bank lobby access was impacted, forcing more customers to use the ATM, which is often outside or in an entryway. Since more of a bank’s customers are not going into the lobby but instead using the ATM, more money is being placed in the machines to meet demand. Thieves were quick to catch on to this practice and began targeting ATMs with more frequency. Often, a vehicle or piece of construction equipment is used to dislodge and remove the entire machine.

“Smash-and-grab events have become quite common, and they can be rather costly because, in addition to the money lost, there is often physical damage to the building,” said Tracey Santor, Product Manager for Financial Institution Bonds at Travelers. “There are a number of steps banks should strongly consider taking to reduce this risk, including purchasing ATM insurance coverage.”

Deterrents include:
Installing concrete barriers or bollards around the ATM to make it more difficult for thieves to access the machine using a vehicle or machinery.
Adding lighting and surveillance cameras.
Placing dye packs and GPS devices inside an ATM so if the machine is jostled or removed, the packs explode, and the location can be tracked.

Even though regulators require FI bond crime insurance coverage, ATM coverage is not mandatory, and it can be added to the bond and P&C policy as an endorsement, even if the machine is not located on the premises. Without it, an ATM theft wouldn’t be a covered event. Insurance carriers such as Travelers have products and resources available, so banks and credit unions have coverage when a crime occurs.

According to a recent article from The Wall Street Journal, the number of attempted ATM smash-and-grabs increased by 150% from 2019 to 2020. Now is the time to ensure your bank has done everything possible to protect against this type of incident. To learn more, have a conversation with your insurance broker or agent, or contact an insurance carrier.