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Who the hell needs biometrics in banking?

Biometrics isn’t discussed that much at banking conferences these days.

Most of the time, when I raise the topic, there’s a groan from the banking audience.

“Oh, been there, done that.”

The usual view is that biometrics doesn’t work.  It’s too flakey.  Too many false positives and false negatives, as in it doesn’t read the finger, eyeball or voice correctly.

And yet, we now have things like Siri voice recognition on the iPhone and fingerprint PC access that is commonplace.

Voice and fingerprint recognition has come a long way.

India has now identity tagged every citizen with a biometric ID, and most governments are doing the same via passport and cross-border programs.

So why are banks so reticent about biometrics for identity?

Because of the past trials or the future costs?

Probably a mixture of both.

Certainly, the idea of biometrics in banking has been around for a long time.

I was involved in rolling out iris recognition ATMs in the 1990s and engaged actively with the Japanese program of deploying palm reading ATMs in the 2000s.

At airports, I regularly pass through the fast track line with an eyeball to a screen, banks have rolled out iris recognition on smartphones and Apple has even patented a fingerprint recognition as you swipe your iPhone to unlock it.

Yet I still look for biometrics in banking and find it hard to uncover anything worthwhile.

Instead, we have passwords that can be cracked easily and so we add an extra clunky three-factor authentications with a one time password generator.

And customers don’t like it.

“It seems like an innocuous piece of kit to have inspired such annoyance, but the new HSBC ‘secure key’ has already garnered six Facebook pages plotting its demise, while Twitter is all aflutter with people explaining just why they don't want to use it. So why has the bank decided to introduce this seemingly unpopular gadget.”

No, they don’t like it one bit.

Things will change and biometrics will be deployed instead of additional tokens and devices over time.

Much of this market increase will come from large government ID and security programs, which will then ripple over into financial applications.

For example, Companies and Markets predicts that the global biometrics market will hit $12 billion by 2015, up from $5 billion in 2010, thanks to these government security programs.

The report believes fingerprints will see the major focus, although citizens don’t’ like fingerprint recognition.

The reason is that fingerprints are mucky.

Wiping your finger over a terminal touched by hundreds or thousands of others, with no cleansing or wipe in-between.


That’s why the Japanese moved into palm or vein reading, as you don’t actually need to touch the terminal.

But the most intuitive of all biometrics has to be voice surely?

With mobile being so ubiquitous, voice makes sense as it’s something you can easily verify via mobile.

Voice is a proven technology and voice recognition is resilient, accurate and reliable enough to overcome accents or influenza.

With voice you don’t even realise you’re being biometrically read necessarily, and you can even use voice to detect lies.

This is why Opus Research predicts that the global number of registered voiceprints will increase from 10 million today to over 25 million in 2015, and much of this will be driven by the payments markets.

Mind you, you need to beware of voice a little bit.

After all, just checkout Siri.


About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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