The age of retina and fingerprint checks for bank client identity verification remains some way off, writes Wendy Atkins.

Biometrics has attracted global media attention for high profile security applications. Although there is a case for the roll-out of the technology for secure authentication in back-office applications in some banks, the case is less clear for customer-facing roll-outs.

On the surface, biometric technology has much to offer the banking industry: it could address the problem of identity theft; it provides a strong method of authentication, which is less likely to be compromised than PIN numbers; it provides a high level of non-repudiation. From a customer perspective, speed and convenience can be provided through a well-integrated system.

Israel leads way

Such factors have motivated many financial institutions to adopt biometrics for security in their customer-facing environments. In Israel, Bank Hapoalim has adopted dynamic signature verification.

According to Alex Herman, vice-president of sales and business development at WonderNet: “This is the largest bank in Israel and has 2.8 million signatures in its accounts with 6500 signature stations installed. The technology was integrated into the system in all branches, and is used to authenticate all customers who come into the bank’s branch.”

Meanwhile, in the UK, LloydsTSB has piloted speech verification to identify phone-banking customers. The bank is working with Nortel Networks and speech recognition company Nuance during the pilot.

Back office applications

In the back office, the potential for biometrics is more apparent, with organisations including Bank of Ghana, Bank of Luxembourg and the Dutch GWK having adopted fingerprint technology for staff access control to networks and other banking facilities.

While the use of speaker and signature biometrics demonstrates that consumers may be prepared to consider the technology, most industry players remain unconvinced that biometrics are the best answer to verification concerns.

In the UK, the Association for Payment Clearing Services (APACS) made a decision in 1999 not to deploy biometrics for 10 years. “This decision was made because retailers need to have time to prepare for any kind of new technology, and therefore need to know the financial industry’s position,” comments Sandra Quinn, director of corporate communications at APACS. The organisation made its decision for two key reasons: reliability and concerns over the composition of a biometric template.

The issue of accuracy has dogged the biometrics community, and although work continues to improve it, most banks still consider that it is not good enough for use in a customer-facing environment. “Currently the very best technology has a false rejection rate (FRR) of 4 in 10,000. This means that a genuine and honest customer could potentially be humiliated and wrongly identified as a fraudster at a cash point or POS,” says Ms Quinn.

“In the UK, 13 million card payments are made each day, which means that you could be looking at an average of 5000 people being falsely rejected each day.”

These concerns are also reflected across the Atlantic, where a spokesman for the American Bankers Association (ABA), comments: “Until consumers feel comfortable with the technology, banks won’t pursue it. However, adopting biometrics could enable a bank to show that it is at the cutting edge of new technology, and the fraud reduction aspect would be useful to some consumers.”

Robust solution?

Accuracy levels may be enhanced by using a suitably robust technology to match the application, as Jackie Groves, managing director, Utimaco Safeware UK explains: “Fingerprint technology on an outdoor ATM will not be robust enough: it will be susceptible to vandalism, and could also be damaged by people with paint on their hands.”

Those considering deploying biometric technology should consider their client segments: there are sometimes accuracy problems associated with certain age, ethnic or occupational groups. For example, some people have very thin skin (particularly problematic with older, female users). Furthermore, customers who have worked with their hands, or who have dry hands, do not seem to register a good image.

Until banks feel confident that false rejection rates are acceptable enough for a customer service environment, most interest in biometric technology will remain firmly in the back office. As the nature of banking changes, interest in biometrics for remote banking applications as well as self-service transactions could slowly grow.

However, this will only be achieved if the technology is introduced, managed and handled properly.

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