RFID In Other Banking Areas

While there are certainly no claims that RFID will alleviate the issues with the mortgage crisis that are still looming, banks are still investing in it with the hope for future returns.  As the economy show signs of hope banks such as Bank of America and Wells Fargo are increasing their investmentin RFID

The focus of this RFID adoption is not primarily in customer service though. Financial institutions are using RFID technology for asset tracking and compliance since Sarbes Oxley adoption in 2002.  The asset tracking is centered on theft preventions of mobile assets and inventory automation.  Wells Fargo has implemented RFID in several of its data centers for asset tracking.

 Banking may not be the first industry on everyone’s mind when the benefits of RFID are discussed but there are definitely benefits in areas other than customer service improvement within banking. Additionally the efficiencies recognized in other areas could free up resources to be used to enhance customer service.

ZashPay Gets off to a Fast Start

In one of my previous posts I introduced ZashPay, a Fiserv product that facilitate person to person payments.   It seems that ZashPay is becoming quite popular even in the midst of competition from competitors such as PayPay.. Fiserv Inc. reports its 3-month-old ZashPay service is making headway with client financial institutions. The service now claims some 400,000 registered users; while more than 400 banks and credit unions have signed on to offer it, with 100 of those having gone live.

Fiserv, a major provider of banking and payments technology, launched ZashPay in July with 200 financial institutions already signed up but with a roster of heavy-duty rivals to contend with. While Fiserv enjoys a built-in advantage with 3,100 client institutions for its bill-pay processing service, companies like PayPal Inc., Obopay Inc., and CashEdge Inc. have been active in marketing P2P payment capabilities to banks

While Fiserv expected ZashPay to be used chiefly for smaller transactions such as payments to babysitters or shares of dinner tabs, this is not what the company has seen in the early going. Instead, tickets are averaging $150, indicating that people are instead using the service for such payments as textbook fees for children at college or fees to contractors like painters or landscapers, notes Steve Shaw, director of strategic marketing for electronic banking services at Fiserv,
Usage is also more frequent than Fiserv expected, Shaw says, with those who have adopted the service making three to four payments a month.

YES Bank’s Branch of the Future

In one of my early postings I described the system that YES bank was developing. YES’ intention is to be a technological leader in banking in India.  They have equipped an entire branch with state of the art technology, all aimed at providing a high-quality, customer-centric service.

The technologies in place at the branch include an Automated Teller Cash Dispenser Machine, Touch Screen Internet Kiosks, Speech enabled voice recognition phone banking, Wi Fi connectivity and a Knowledge facility among other facilities.  YES also has a lounge designed as an exclusive banking enclave offering privacy and comfort to customers wishing to discuss business and finance in a first-class environment.

YES prides itself on its knowledge driven approach to banking, and a superior customer experience for its retail, corporate and emerging corporate banking clients. Their aim is to”transform retail branches into 'Service Oriented Advisory Centers' thus shifting the focus from providing vanilla transactions to high-end value added services through the innovative use of technology and futuristic branch design.”  Thus far they have done an excellent job in this transformation!

Biometrics and Banking (National Bank of Australia

National Bank of Australian has adopted a voice biometrics based authentication solution for its telephone banking customers. This is in an effort to reduce fraud.

After initial minor issues with getting users enrolled, NAB had much success in implementing this system and has received positive feedback from customers.  They are considering expanding this system to mobile internet banking and online payments.

Besides voice there are other biometric systems that are quickly being adopted in banking.  One company Global Rainmakers has developed an iris scanning system called HBOX.  The plan is to have this technology deployed in mobile phones to allow remote authentication.  This will go into a mobile phone that has a high enough resolution to complete the registration.

Banks traditionally have been very conservative in protecting customer’s data, and customers expect it. The idea is to have added security with biometrics and reduce customer exposure and fraud. 

One concern with the infusion of biometrics in banking is the probable impact on the customer experience.  In as much as customers want their information protected they do not want to be inconvenienced to achieve that protection in many cases.

Tim Cullen head of direct channels with NAB says of voice biometrics, “"There's probably not a lot of new technologies out there that create a safer experience that are easier to use or create a better customer experience”.  If the experience of NAB’s customers will be the norm then we can expect that vast adoption of voice and other biometrics in banking for improved security.

Voice Biometrics and Mobile Banking

With so many carrying out banking transactions via cell phone it seems like a logical step to combine voice biometrics with mobile banking.  Voice Commerce Group has developed a system which enables the adoption of biometrics based voice signatures by financial institutions. 

The system that they have developed is called Voice Transact. Voice Commerce has teamed up with Nuance a leading provider of speech recognition solutions to enable the biometric element of Voice Transact. The main advantage of this system, known as Voice Transact,  is to  eliminate fraud resulting from the exchange of information via a cell phone.
Voice Transact may also be used to facilitate person to person payments as well as to allow customers to authorize increased credit lines.

One con to voice signatures is the possibility of a bad cell phone connection disallowing authentication.  Also many customers have grown used to the concept of a PIN and card and may not necessarily want that taken away.  In that event this system could be used as a backup to the PIN.

Many feel that in general voice biometrics systems should not be used to replace pins but rather has a backup in the even that the customer loses their card etc.  I would tend to agree with t his viewpoint. 

ZashPay for P-2-P Payments

Fiserv, one of the leaders in banking solutions and my current employer (J ) offers a product called ZashPay to several financial credit unions enabling their customers to conduct person-2-person payments. PSCU, one of the nation’s largest Credit Union Service Providers recently adopted ZashPay and added it to their online bill pay program.
ZashPay allows customers to send money to anyone using their name and email address or telephone number. The money is sent from the customer’s payment account to the other party’s account. Money can be transferred in as little as one business day. ZashPay allows the customer to send money without sharing their bank information with the receiver or having to stop at the ATM or mail a check.
I think this will be competition for companies such as Money Gram and Western Union at least for domestic money transfers.

Biometrics in banking

Smartcards are pocket sized cards with an integrated circuit to process information. They store data that can be in the form of information or value or both. Another type of card used to store information is the biometric card. Biometric cards are used to automatically identify users based on physiological or behavioral characteristics. Biometric authentication requires comparing a registered biometric sample with a newly captured biometric sample.
IMFAST is a technology that uses Biometric Cards and NFC (near field communicator). The transaction operator uses a NFC phone to provide service to customers. The customer will be provided with the low-cost RFID (radio frequency identification device) based smart card. In this model, phone acts as the reader for the card.
iMFAST has been designed with unique features to address the rural environmental conditions (heat, dust and moisture, etc) and the target population (illiteracy).It provides voice guidance in the local language for transactions and authentication. Biometric authenticated transactions improve confidence levels among rural people. Lower cost, mobility, varied connectivity, identification, authentication and multiple applications are the USPs in a nut shell.

Service enhanced with RFID technology & biometrics.

While many banks are focused on reducing their overhead costs by eliminating extensive front-line staff, customers still need excellent customer service.  With all the new technologies, the volume of traffic in the branch has been significantly reduced, but there are still many transactions such as large cash withdrawals that require users to visit the branch.  In those instances the objective is to quickly service the customer.
Financial institutions can’t sacrifice customer service in the quest to reduce operating cost, so the alternative to increased staff is to leverage new technologies.   One company which creates technology to facilitate this is RCG Corporation.
One such product is the E-VIP card, an RFID enabled card which stores biometric information on the customer such as their fingerprint and facial image. A multi-factor verification kiosk is used by the customer to enroll. Once enrolled the customer can be verified at the kiosk available at the branch..  The cardholder can present two or more biometrics with the presence of the E-VIP card for easy verification. With the verification of their fingerprint and facial image the customer can conduct transactions such as bill pay and account status at the kiosk.  The customer may also specify his needs for example at the kiosk and simply pick up his foreign currency for example at the teller window.
This shortens the customer’s waiting time, provides more secure banking transactions and provides a new level of convenience.

NXP and RFID

In one of my previous posts I spoke about the need for mobile devices service providers and manufactures to work with financial institutions. One company called NXP Semiconductors established by Philips over 50 years ago has worked with several banks in India’a rural areas to provide its RFID based mobile payment solution to customers. This works to the benefits of the customers in these areas as in the absence of this technology many of them would not have access to banking services.

The mobile device smart card will biometrically store the customer’s identity data coupled with their bank data. It will allow customers to perform deposits, withdrawals and cashless payments without having to visit the closest bank branch.

It is thought that the increase in mobile device and availability or mobile banking facilitated by RFID will lead to the development of not on the area targeted by NXP but all of India.

Financial Institutions and Mobile Devices

It seems that financial institutions will need to focus on relationships with mobile device service providers and manufacturers.   In order to enhance customer service and relations, these institutions need to make mobile banking available to their customers.

Some financial institutions such as Barclays Plc are already working with service providers to leverage NFC payment trials. This could give a new definition to Machine-to-Machine interactions.

It is anticipated that cell phones will morph into management devices providing users with the ability to manage not only their finances but their entire homes.  Looks like people will be even more attached to their phones than before. 

RFID interim solution to achieving NFC

In the last posting I discussed In2Pay and briefly mentioned that it is facilitated by a MicroSD chip and Near Field Communicator (NFC).  So what is this NFC?  NFC is a short range high frequency wireless communication technology which enables the exchange of data between devices over about a four inch distance.  It is simply an extension of the ISO\IEC 14443 proximity card standard (proximity card, RFID) that combines the interface of a smartcard and a reader into a single device.

Some believe that RFID is just an interim solution to achieving mobile banking facilitated by NFC.  The thought is that ultimately mobile phone banking, not just contactless payments will be facilitated using NFC.

I believe that the concept of contactless payments needs to gain more acceptance before NFC for mobile banking will “take off”.

Visa collaborates with Apple for contactless payments

Since contactless payments such as PayWave has not gained the popularity that Visa initially anticipated they are coming up with new ways to put contactless payments at the fingertips of users. 

Visa now allows users to use their iPhone to make payments.  The payment is facilitated by a modified MicroSD card with a near field communicator.  This system is called In2Pay.

The idea is to provide the consumer with the option to make payments without having to carry a credit card in a a wallet.  The customer keeps the chip in the iPhone case and taps it against the reader when they are ready to pay.  All the customer would need to carry is their cell phone case.

Once more phones use MicroSD Chips this will become more popular.

This is all in an effort to promote contactless payment which in my opinion will soon be the most popular means of payment.

Visa’s PayWave and MasterCard’s PayPass

In addition to the customer service advantages in the actual branches, many financial institutions are issuing cards with RFID chips backed by Visa and Mastercard for added convenience to the customers. Two such cards are the PayWave by Visa and the PayPass by MasterCard.

With MasterCard’s PayPass customers may use their RFID enabled card at retailers and stores where the PayPass logo is posted.  All they do is tap their card on the logo.  They then listen for a beep and a green light indicating that the payment was approved.  For purchases under fifty dollars no pin or signature is required.  This significantly reduces the time required for the customer to get rung up and they can be in and out of the store.

The concept with Visa’s PayWave is the same.  Instead of tapping their card the customer waves it at a reader.  With PayWave customers don’t have to sign for transactions under twenty-five dollars.

The benefits to the customer include faster checkout, no signature required, reduced risk of fraud as the customer remains in control of their card.

Halifax bank in London is one of the banks who has issued PayWave Visa debit cards.

Many customers have security issues with the use of these cards.  I anticipate that once there is a greater comfort level with RFID enabled cards that larger purchases will not require signatures and pins and RFID cards will ultimately replace the magnetic strip debit card all together.

How Yes Bank in India uses RFID to provide excellent customer service

Yes bank in India has adopted an RFID customer Identification program that allows them to provide personalized service to their wealthy customers.  The bank has distributed RFID cards to customers so that they may receive service without having to identify themselves.

When customers with such cards walk in to the branch the interrogator at the door reads the customers’ card which contains a unique identification number on the RFID chip.  The reader transmits the data to a back-end system.  Once the data is interpreted and the customer is identified a pop up appears on the screens of the relationship management team as well as the screen of the greeter. This pop up contains the customer’s name and picture.  In addition to the identification card the system also confirms the customer’s identity by comparison of a photo it takes of the customer at the door with the photo of the customer on file.

The relationship management team then has the option to select the customer’s data indication that they will be serving the customer.

The system that they are using was developed by SkandSoft Technologies.  Any bank taking advantage of a system such as this could greatly improve their customer service.  Customers, especially affluent ones expect bankers to know who they are.  This takes the pressure off of the customer service representative.  It may also give them a chance to peruse a customer profile and identify opportunities to offer services to the customer that may work in customer’s favor.

Introduction and Overview of RFID

The purpose of this blog is to explore the way in which RFID can be used to improve customer service in the banking industry now and in the future.

RFID is Radio Frequency Identification.  Wikipedia defines RFID as the use of an object typically referred to as an RFID tag applied to or incorporated into a product animal or person for the purpose of identification and tracking using radio waves. The concept of RFID is nothing new. While predecessors of RFID have bee around since 1945 the first true ancestor of modern RFID was invented in 1973 by Mario Cudullo. This device was a passive radio transponder with memory.

There are generally three types of RFID tags, active RFID tags which contain a battery and can transmit signals autonomously, passive ID tags which have no battery and require an external source to provoke signal transmission and battery assisted passive RFID tags, which require an external source to wake up but have significant higher forward link capability providing greater range.

One of the most common uses of RFID is in toll booths for electronic toll collection.  EZ Pass is an example of this.

In the next few post we will discuss how RFID technology can be used to improve customers; banking experience.