The Growing Threat of Artificial Stupidity

Last week, the United States had a brief scare.

On Wednesday, July 8th, the New York Stock Exchange abruptly crashed for several hours. The same day, United Airlines experienced a faulty router connection, forcing it to cancel a total of 59 flights.

The close timing of these events caused a brief panic. Rumors quickly spread across the Internet that we were under a coordinated attack. As it turns out, though, the technical failures of the NYSE and United Airlines were mere coincidence.

Ironically enough, the lack of a coordinated effort may actually be more frightening than its existence. While the coincidental nature of these events might tell us no one was out to harm us, it also reminds us that even in the absence of malice, we’re at a constant threat of failure by design.

This notion reflects recent opposition to the idea that artificial intelligence is the single-greatest threat computers pose to mankind. Instead, many experts are now proposing that it’s artificial stupidity we should really be worrying about.

One recent event that comes to mind involves the death of a Volkswagen employee earlier this month. The 22-year-old technician was part of a team setting up a stationary robot that, due to a complete lack of awareness, ended up grabbing the man and crushing him against a metal plate.

Of course, most of us don’t spend our days in close quarters with industrial robots that might mistake us for scrap metal, but the takeaway here is that technology is ultimately only as safe as we design it to be.

As Popular Science recently put it, technical failures have become the modern natural disaster. Like nature, technology completely surrounds us. And like nature, technology can sometimes turn on us in the blink of an eye.

ATM Security: America’s Next Natural Disaster?

Introduced some 40 years ago, the ATM now sprawls across the U.S. with more than 400,000 machines.

ATMs have become so common that we often forget there’s actually a complex computer working behind the scenes — a touch screen, keypad, and user interface — and inside there are processors, memory, and communications hardware.

Every single one of these ATMs runs on an operating system, and of those, as much as 62% currently run on Microsoft’s (NASDAQ: MSFT) Windows XP.

The problem, though, is that support for Windows XP ended on April 8, 2014. This means no more regular security patches and no more compliance with industry standards.

Now, that isn’t to say Windows XP or America’s ATMs have suddenly stopped working. Everything should keep on running as it has for the last 14 years.

However, these ATMs no longer meet existing security regulations, a fact that will require ATM companies to undergo a mass upgrade.

But it’s not as if the ATM industry hasn’t experienced something like this generational shift before.

It used to be that most all ATMs were run on IBM’s (NYSE: IBM) OS/2. That changed in the early 2000s, when IBM phased out and eventually ended support for its software. That’s also when ATM terminals upgraded to the Windows XP-based systems.

OS/2 worked great; it was simple and efficient, and no one ever got hacked. XP, though, is a more complex system and opens the door for online criminal activity. On one hand, XP is good because it offers more functionality and possible applications, but its vulnerability is what pushes the need for an upgrade.

So that’s what banks and credit unions from all over are supposed to be in the process of doing right now: making the switch to newer operating systems. But many just aren’t.

The reality is that company budgets, performance, and compatibility issues have drastically slowed the process down. The problem extends overseas as well, with the European ATM Security Team (EAST) recently reporting the single-largest attack on ATMs in history.

In fact, in 2014, a total of 15,702 ATM-related fraud attacks were reported in Europe alone.

The Right Fit

The most obvious companies affected by this issue are the ATM makers themselves — companies like NCR Corp. (NYSE: NCR), which is the largest ATM supplier in the U.S.

Diebold, Inc. (NYSE: DBD) is another that delivers self-service machines to places of business all over the world.

But then there are those companies with the capability to make the transition far more efficient.

The cost to upgrade a single ATM can be anywhere from a few hundred dollars to a few thousand dollars, depending on the hardware.

But that cost can be cut drastically through a process known as virtualization. In short, virtualization fixes compatibility problems between hardware and software.

You see, not all current ATM hardware is compatible on newer operating systems because the machines were built well before those operating systems even existed. This lack of compatibility is forcing not just software upgrades but hardware upgrades as well.

What virtualization does to solve this is seamlessly link these older machines to newer software as a kind of language translator, potentially saving ATM companies millions.

But virtualization isn’t just applicable to America’s outdated ATM problem. In fact, it’s becoming a near necessity for major corporations and enterprises across the world.

That’s because in the last decade, we’ve seen an explosion of difference devices, operating systems, and applications — all of which either currently face or will eventually run into compatibility issues.

Linking all these devices and applications together is likely to be the next holy grail of the tech industry.

Until next time,

Jason Stutman

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