ATMs have been in place since when? The 70s? But ATMs only give you money. They don't let you pay anything.
You are misinformed. US ATMs accept cash and check deposits, allow transfers between accounts, and sell stamps. Some may even let you pay bills or order cashier's checks.
If you just require banks to come up with tighter security, what will happen? People will see that they have to jump through even more hoops when doing online banking and they will ask why, which the banks will gladly blame on the new directive (whether it's from the EU or the US government...), and shift the blame of the hassle on government and the "nanny state" that tries to patronize us and protect us from reality and yaddayadda. Nobody will explain that these "hardships" are there to protect your money from being stolen.
Which is still a better outcome than that they DON'T tighten security so that they don't have to do any of that pesky explaining.
The market *won't* motivate banks to do it on their own, not for a very, very long time... because people don't actually understand the risks, so they don't see a value in protecting themselves against them. It's that tricky "perfect information" component of Adam Smith's triad.