Saturday, December 7, 2013

Biometrics: The next thing in bank authenticating?

Would you allow your bank to scan your fingerprint – or perhaps iris or retina – so you could access your account?

Like it or not, banks are exploring that very thing.

I spoke this week to two industry insiders who said banks are looking at how biometrics might be used with smartphones or automated teller machines. Under consideration, they say, is using biometrics for authenticating, meaning verifying that a person is who they say they are.

Ed O’Brien, a banking analyst for Maynard, Mass.-based Mercator Advisory Group, told me there’s “a lot of interest” in biometrics among banks. No systems are in production yet, as far as he knows, he said. He said biometrics would provide a quick, accurate and secure method of authenticating.

Automated teller machines could be one application for fingerprint scanning, which could become one step in the authenticating process, O’Brien said. On top of fingerprint scanning, banks might add another layer of authenticating, such as requiring the customer to enter a passcode, he said.

Kristen Rankin, who oversees mobile banking for Atlanta-based SunTrust Banks, said it’s likely that fingerprint scanning will be used by the banking industry to allow customers to sign on to mobile banking.

But O’Brien and Rankin see obstacles that are keeping the technology from being quickly rolled out.

Rankin said Apple's fingerprint sensor technology on the iPhone 5S is proprietary, preventing banks and other companies from using it now for their mobile applications. (That issue aside, Apple customers have complained that the reader doesn’t always work properly.)

O’Brien said banks will likely wait until other industries make wider use of biometrics before they introduce it to their customers. That's because banks will want to be sure customers are comfortable with biometrics, he said.

He said it remains unclear how to safeguard the technology so that fingerprint files can’t be stolen.

“I think there are a lot of questions to be sorted out and answered before the average consumer would be comfortable using it,” he said. “I think we’re still two or three years away, in general, not necessarily for banking.

“Once biometrics become more widespread … the next step might be, ‘OK, why can’t I use this for mobile banking?’”

For now, banks are quietly studying the technology, he said.

There’s “a lot of work going on in the background.”