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Biometric technology goes beyond ATMs in banking sector

Biometric technology goes beyond ATMs in banking sector
Automated teller machines (ATM) are one of the most popular segments in the banking sector for biometrics technology, but it is by no means the only one. Advancements in measuring human body characteristics have given rise to several new opportunities for biometric applications in financial institutions.
Automated teller machines (ATM) are one of the most popular segments in the banking sector for biometrics technology, but it is by no means the only one. Advancements in measuring human body characteristics have given rise to several new opportunities for biometric applications in financial institutions. 

In a recent interview with a&s International, Saya Harada, from the Public Relations Department of Hitachi, had said that banks are making efforts to explore possibilities in this area. 

“Several of the large European banking groups are investigating the use of biometrics for a variety of applications including retail (branch counter and self-service), corporate customers (corporate treasury and cash management functions) via their regional banking operations,” Harada said. “This may lead to increased take up of biometrics in banking in the coming years.”

Access to banking services

More and more banks are using biometrics
to authenticate transactions.

Last year, Hitachi had joined hands with Barclays bank in U.K. to launch finger vein authentication system for customer verification. From this year, the bank’s corporate customers will be able to access their online accounts and authorize transactions within seconds, without PIN, passwords or any other authentication codes.

Several other banks have also begun using voice biometric verification technology to verify customers who transact through mobile devices, telephone and the internet. This technology compares various features of a person’s voice like inflection, pitch and dialect and matches them to pre-registered data. 

Banks that have set up such automated login systems not only boost customer satisfaction levels, but also reduce their customer-care costs, according to Biometrics Research Group. 

Mobile banking and e-commerce

Mobile phone manufacturers are increasingly
coming up with better solutions for
safer transactions.

Yet another application that has received much interest with regard to biometrics is mobile banking. Major mobile phone companies like Apple and Samsung have already released fingerprint authentication systems on their handsets, and some banks have started using them.  

Earlier this year, U.K.’s Royal Bank of Scotland and NatWest had added fingerprint login system to their mobile banking apps through Apple iPhone’s fingerprint reader. In April, the South African financial institution Standard Bank had also begun a similar service. 

More hardware manufacturers are expected to come up with biometric technology solutions for financial transactions, while considerable R&D is being done to improve the technology. Options like Apple Pay and Google Wallet increase the possible reach in this field, and have opened up a whole new space for e-commerce. 

But although biometrics show so much potential in the banking sector, they don't come without certain concerns. The new applications have given rise to fears that safety might be compromised at the expense of convenience. 

Overcoming security concerns about biometrics

A recent report from ABI Research claims to have exposed cybersecurity vulnerabilities of biometric systems including untrusted user interface and malware for the consumer segment, and compromised USB peripherals and encryption for the enterprise sector. 

According to the report, key challenges for biometric system integrators will be incorporating data security protocols, monitoring incoming threats and establishing physical and logical integrity of the system. 

Of course, the opportunities outweigh concerns when it comes to the application of biometric technology. Companies will only be more interested in investing in this segment in the coming days and to this end they will also be taking steps to ensure improved safety measures. Apple, for instance, recently filed for a patent covering a two-factor biometric authentication process for online commerce. 

The patent relates to a method with which an online store sends an online account token associated with an electronic device or to a biometric sensing device after a user successfully enters a password. The device can authenticate the online account token after one or more biometric records match the data stored in the device. Once this is done, the authenticated online account token is sent to the online store, allowing the user to engage in transactions. Such a method could improve the security of Apple Pay, which currently allows users of iPhone’s Touch ID fingerprint sensor to verify identity for approving purchases. 

In the future, the financial sector would definitely see an increased presence of biometric technology. No doubt there will be concerns on the security and safety, as no system is 100 percent fool-proof. But with more and more companies investing to develop this technology, biometrics would definitely offer an improvement over the present systems. 
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