Banks Jumping On Biometrics Bandwagon

Count in banks as another business type looking to ramp up use of biometric technology.

A recently released study from Frost & Sullivan said the worldwide financial biometric markets earned $117.3 million in 2006. The company has estimated the market to reach $2.07 billion in revenues by 2013.

Worldwide, banks are using the technology to enhance security and convenience to customers.

In North America and Europe, regulatory issues are causing banks to turn to biometrics. In emerging markets like Asia Pacific and Latin America, banks are using the technology to leverage self-serve banking options with biometrically-enabled ATMs.

“With the Federal Financial Institutions Examination Council (FFIEC) and the Sarbanes-Oxley Act pushing for stronger guidelines in multi-factor authentication and access to customer data and employee audit trails, financial institutions look to adopt biometrics to maintain regulatory compliance,” said Frost & Sullivan research analyst Imran F. Khan. “These end users are beginning to realize the advantages that biometrics offer which enhances security, time efficiency and convenience.”

Frost & Sullivan noted the financial services sector previously viewed biometrics as an immature technology not ready for a major rollout. But now, banks see the technology as a solution to fight against identity theft and fraud.

But the research said banks are slow to adopt new technology thanks to complex issues of system integration along with low awareness and ROI of biometrics.

“Lack of awareness has led people unfamiliar with biometrics to think of it an intrusion of their privacy,” Khan said. “Furthermore, even if financial institutions are convinced of the cost savings and adopt biometric solutions, they may face resistance from their employees or customers, who do not want to submit biometric information.”

To combat those issues, Khan advised vendors to be proactive about explaining cost efficiencies of biometrics.

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