Cash machine crime has risen despite leading banks investing millions of pounds in anti-skimming technology.
The banking industry says new figures, to be published next week, will show ATM fraud is on the increase.
Criminals - many from organised gangs - stole £65m last year, by using skimming devices that read information from the magnetic strip on the back of a card.
Deputy Information Commissioner David Smith said banks should be doing more to protect customer information.
Mr Smith added: "Banks really do need to concentrate their attention on customer security - it's about protecting information and the problems that customers can face if their information gets into the wrong hands.
"As you cut off one route for fraudsters they exploit another"
"It's not just about protecting the bottom line, the profits of the banking industry."
Although only one in four machines has been fitted with the new anti-skimming equipment so far, the banking industry said it will have a "dramatic effect on reducing cash machine fraud".
The industry also said it had witnessed an increase in cashpoint crime because the new chip-and-pin system has made it harder for fraudsters to use stolen or cloned cards in shops.
Chip-and-pin cards aim to cut fraud by including a smart chip, which can store more information than the usual magnetic strips, and also by having users verify transactions by keying in a pin number rather than signing a receipt.
Miniature cameras which can record pin numbers are also among the devices used by fraudsters to steal cash from ATMS.
Over the past two years card issuers have been busy replacing all credit and debit cards in the UK.
Sandra Quinn, from the Association of Payment and Clearing Services (APACS) which represents the companies which handle payments, said: "As you cut off one route for fraudsters they exploit another.
"So as we made sure that all shops had chip-and-pin equipment, fraudsters weren't able to use counterfeit cards there, so they doubled their efforts at cash machines."
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