Biometric banking: yesterday’s vision, today’s reality
It feels like biometric technology has been with us forever. However, most British people’s experience of it has been limited to film and television. Star Trek fans know that voice recognition systems were used by computers to identify users.
More recently, in Skyfall James Bond’s pistol used palm registration technology to prevent it being fired by others. Despite this, biometrics appear to have struggled to make the transition from films and into everyday life.
That’s unlikely to be the case for much longer. Fujitsu has pioneered the development of biometric systems and is an expert in its application to financial services. Consequently, we’ve noticed (but are not surprised by) the growing interest of the British banking industry in the technology. It’s something that’s existed in other parts of the world for some years, but why the sudden interest now?
We believe that three key industry and social developments are driving today’s interest in biometrics.
1) Biometrics helps mitigate security threat
Security – or, more accurately, fear of the consequence of a breach of security –
has led financial services organisations to explore cost-effective ways to strengthen defences. High profile incidents of fraud and identity theft have led managers to question existing security arrangements and explore other, additional and newer options.
2) Biometric solutions are creeping into other areas of life.
Biometric passports, introduced in the United Kingdom in March 2006, remain most people’s primary exposure to biometric technology, but we expect this to change rapidly. Users of Apple and Samsung mobile phones can already use their fingerprints to open their devices.
Users of Microsoft’s Windows 10 can opt to access it through Windows Hello, which offers fingerprint and iris biometrics as log–in options. As society becomes more exposed to biometrics in different walks of everyday life, we believe familiarity and confidence in the technology will grow. Ultimately, we expect it to become the gold standard of security options.
3) Biometrics are both practical and feasible
The practicalities, which surround the speed, accuracy and cost of biometric technologies, have all improved in recent years. This makes the mass roll-out of biometric solutions much more feasible than in the past. Parts of the Barclays and Santander groups have already piloted the use of voice recognition technology, primarily for identifying customers who approach contact centres, and Barclays has announced plans to deploy finger scanning readers to business clients for use in authorising payments and other transactions.
Biometric deployments around the world
In countries such as Brazil, Japan and Turkey, banks using biometrics to identify customers is, already, an everyday experience. Perhaps this is because all markets had unique social characteristics which biometrics could help address and which allowed a business case to be built which justified the investment.
For example, Banco Bradesco, Brazil’s second largest bank, claims to have virtually eliminated ATM fraud by deploying Fujitsu’s palm vein-reading technologies on its cash machines.
Japanese banks have also been impressed by the security–enhancing properties of palm vein technology. In a country still wedded to cash, banks have promoted its use by increasing daily cash withdrawal amounts and lowering bank charges for customers who elect to use biometrics to identify themselves.
On top of this, the technology is being used to track access to, and transactions within key business systems. With security-related issues rising to become ‘top of mind’ for managers, banks realise attacks don’t just originate from outside the organisation. Attention must also be given to addressing the internal threat of hacking and theft.
For instance, in 2012 a UK bank employee perpetrated a £2.4 million fraud over five years, simply by submitting false invoices to claim payments.
Clearly, businesses that are heavily dependent on technology increasingly require the ability to track who has access to, and uses, key systems, applications and payment mechanisms. In the United Sates, Fujitsu offers its PalmLock solution to users of SAP Enterprise Resource Planning (ERP) systems.
This technology positively authenticates the identity and approved security level of the user at log-on and, once in the system, it ensures that the user has the appropriate access approvals to conduct transactions within each given areas. Clients using the system report significant reductions in fraud in areas such as purchasing, payroll and at retail Point of Sale.
Future developments for biometrics
We’re seeing significant moves for biometrics around laptop and desktop sign on. Deploying biometric technologies in office and home computing equipment accelerates login times and provide a practical and easy alternative to remembering passwords. As a result, it also reduces requests to IT helpdesks for help with resetting passwords.
They also provide added protection to users. Stealing an identity – say in the way that the German defence minister’s fingerprints were copied in 2014, simply by using photographs taken from afar – is made much more difficult, if not impossible. That’s why some Fujitsu laptops come with a biometric reader built in, while – for users of other equipment – it offers a mouse with a palm reader embedded in it, which simply plugs in to a USB port to provide biometric identification functionality.
To accelerate access to mobile phones, Fujitsu has pioneered iris recognition technology. Users of Fujitsu phones will be able to quickly access their device by simply holding it in front to their face, allowing the embedded software to scan their eyes.
Biometric systems are highly accurate, cost-effective and scalable. They deepen bank defences by providing an unequivocal link to an individual, event or transaction and are very hard to forge. We believe that these are key reasons why banks are exploring, and deploying, the technology on a scale previously unseen – at least, outside of the movies.
Anthony Duffy is Director of Retail Banking at Fujitsu.
A longer version of this article was recently published in Global Banking and Finance Review.
Image credit: Teeejayy (Creative Commons)
In addition to advising numerous UK and continental European financial services organizations, Anthony has also held senior line management positions, including as Director of Strategy for a FTSE-100 bank; Deputy Managing Director of a UK commercial bank; and Managing Director of a UK asset finance company. He has also worked in central government, advising Cabinet ministers of the development and passage of company legislation.
Anthony joined Fujitsu in February 2012.