Failure to upgrade from Windows XP will cost many banks dearly

(Credit: Techweez)

Banks worldwide stand to face added costs for failing to upgrade the Windows XP operating system that runs most automated teller machines (ATMs). Windows XP supports 95 percent of the world's ATMs.

Only about a third of the world's 2.2 million ATMs will have been upgraded to the new Windows 7 OS by April 8 when Microsoft's support for XP will end. Failure to upgrade to Windows 7 will mean that laggard banks face extra costs and must spend time negotiating with Microsoft to continue supporting their XP-based ATMs.

A spokesman for Microsoft said there are certainly large enterprise customers that haven't finished their migrations and that are currently purchasing customer support.

"The cost will depend on both the specific needs of the customer and what support they already have in place, so it's different for every customer," the spokesman said. 

Media reports said some of the biggest US banks will not meet the April 8 deadline. Bank of America said it will ask Microsoft to extend support for its machines still running Windows XP.

On the other hand, JPMorgan will start converting its machines to Windows 7 only in July. The bank operates 19,200 ATMs. Citigroup Inc, which runs 12,000 ATMs worldwide, said it is now upgrading its ATMs from XP but refused to give further details. 

The UK's five biggest banks (HSBC, Lloyds Banking Group, Barclays, Royal Bank of Scotland, and Santander UK) either have or are in the process of negotiating extended support contracts with Microsoft.

The cost of extended support and upgrading to Windows 7 should cost these UK banks some $100 million, said one analyst. Without upgrading, these banks could be overwhelmed by new regulatory demands in the wake of the 2008 financial crisis.

Some 440,000 or one-fifth of the world's ATMs are in the U.S. Analysts believe many banks operating XP will still be using this old OS after the April 8 deadline.

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