Bank’s big switch to IP

According to St George CIO John Loebenstein, the project could take three to four months to complete. "A huge proportion of St George's ATMs already use IP networks, but you are going to see a lot more happening in 2003," he said.

Loebenstein said switching from the venerable SNA network to IP does not increase security risks. "The message is encrypted right at the source. We don't rely on the network to encrypt it. If you are standing at an ATM, as you press the keypad it is encrypted immediately," he said.

Loebenstein said that unlike the US and Britain, Australia does not use a central switch to control transactions between banks. The so-called Big Four connect directly, while other institutions use a mixture of direct and switched methods.

Ron Hill, CIO of Cashcard, which switches many of the indirect transactions, said IP is still the minority protocol, but is gaining momentum. He said because both parties need to agree to move to an IP platform, the number of ATMs and terminals involved means it will take some time before IP overtakes SNA.

"Even if each transaction takes a number of weeks, you are still looking at a number of years," he said.

However, Hill said reduced cost and improved stability and reliability are helping IP gain acceptance for financial transactions. IP also promises a slew of new transaction services. "There's a good reason to move now," he said.

Hill said Cashcard has a regional bank and a building society customer both interested in IP transactions and is working with an ATM manufacturer on the projects, which will involve "several hundred" ATMs.

He said smaller institutions are proving fast adopters of IP. "Some of the smaller financial institutions can be very innovative and very nimble," he said.