Barnaby Jack, a security researcher at the computer networking giant Juniper, had planned to hack into an automatic teller machine (ATM) live onstage at the Black Hat Security Conference in Las Vegas later this month. But his presentation, designed to demonstrate the insecurity of various ATMs, attracted the attention of the financial industry as well as security professionals, and under pressure from ATM manufacturers, Juniper canceled the presentation last week, citing concerns that the vulnerabilities involved had still not been fixed.

“The vulnerability Barnaby was to discuss has far reaching consequences, not only to the affected ATM vendor, but to other ATM vendors and–ultimately–the public,” wrote Brendan Lewis, director of corporate social media relations for Juniper in a statement posted to the company’s official blog last week. “To publicly disclose the research findings before the affected vendor could properly mitigate the exposure would have potentially placed their customers at risk. That is something we don’t want to see happen.”

The presentation would have focused on exploiting vulnerabilities in devices running the Windows CE operating system, including some ATMs, according to a source familiar with the details. While the presentation was canceled to allow manufacturers more time to fix the vulnerabilities, Juniper had originally notified the company almost eight months ago, says the source, who asked not to be named.

Other security experts are not surprised that the vulnerabilities are there to find. Significant flaws in cash machines and ATM networks are plentiful, says Nicholas Percoco, senior vice president of TrustWave, an information security and compliance firm that has assessed the security of point-of-sale terminals, kiosks, and ATM networks. “It is very, very rare that a device comes to our labs–in fact, I don’t think that it has happened–that we don’t find a vulnerability,” Percoco says.

ATMs have also been the focus of a number of high-profile security incidents in the past 12 months. In November 2008, thieves stole nearly $9 million from more than 130 cash machines in a matter of hours using fake payroll cards. The scheme, which took place in 49 cities worldwide, relied on hackers breaching the network of financial firm RBS WorldPay and reloading cards so that they could withdraw an average of $90,000 per account.

In January of this year, the second biggest maker of ATMs, Diebold, warned customers in an advisory that certain cash machines in Eastern Europe had been loaded with malicious software capable of stealing financial information and the secret PINs from customers performing ATM transactions. The stealthy software, which infected at least 20 ATMs, allowed criminals to print out card details on ATM receipts and eject the cash cartridge from the ATM kiosks, according to an analysis of the software performed by TrustWave.

“Once the attackers get in through the back-end systems, they essentially camp out,” says Percoco. “It is cash, so it is real money; it’s not like they are charging to a credit card and have to sell the goods.”

Among recommendations to its customers, Diebold asked that banks and ATM owners periodically change the kiosks’ administrator passwords and ensure that the firewalls are active. Diebold believes that attackers had to have physical access to the systems to load the malicious software in the first place. “To the company’s knowledge, this is the first incident dealing with a physical attack and installation of illegal software within the ATM unit,” Diebold said in a statement issued at the time.

NCR, the leading supplier of ATMs worldwide, has taken a multilayered approach to securing its cash machines. The company uses a technology, known as Solidcore, that prevents unauthorized code from running on its Windows-based systems, and it recommends that customers lock down the Windows XP operating system by using the built-in firewall and virtual private networking. Other security features include physical measures to make it apparent if a fraudster attaches a device to steal card information to the ATM, a mechanism to prevent such devices from easily reading bank cards, and ink that stains stolen cash.

Representatives for both NCR and Diebold denied that any of their machines were to be the focus of Juniper’s demonstration, however.

The operating system used in the affected system, Windows CE, poses hurdles to a quick fix. Microsoft recommends that Windows CE is used for “low-end cash-dispensing ATMs,” while Windows XP Embedded and Windows XP Professional are used on more full-featured ATMs, according to a white paper on kiosk and ATM operating-system platforms issued by the software maker. Windows XP Embedded, the latest version of which is Windows Embedded Standard 2009, and Windows XP Professional are more secure because they are easier to update, the software giant says. A Microsoft representative stated that the software giant had “no specific information related to Black Hat or Juniper’s canceled talk.”

Nearly 56 percent of ATMs in the United States run some form of the Windows operating system and are connected to some form of network that can facilitate updates, according to the TowerGroup, a financial consultancy. The remaining devices run an older operating system, IBM’s OS/2, and typically have no network connection. Because ATMs typically last a decade or more, the older OS/2-based machines will remain in use until about 2012, says Nicole Sturgill, research director for delivery channels at the TowerGroup.

Sturgill expects cybercriminals to find new ways to attack cash machines. “It’s a continuing cat-and-mouse game,” she says. “It does not matter how good you have it: ATMs will always be a place to access cash, so criminals will always be interested in finding a new hole in the ATMs.”