Why does ATM ask for CVV?

Why is it necessary for an ATM to request the CVV number when conducting a transaction? What security measures does this add, and how does it help prevent fraud or unauthorized access to personal financial information? Is it standard practice for all ATMs to require this information, or is it specific to certain banks or regions? How does the process of entering the CVV number differ from traditional PIN-based transactions, and what are the potential drawbacks or challenges that come with this additional step?