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”.