Biometrics on the Front End

When will American banks begin implementing new technology?

Unlike other forms of strong authentication, biometrics is the only means of determining who is using the system. Systems relying on PINs, passcodes or less reliable means of user authentication are rapidly becoming both ineffective and obsolete. With the introduction of multispectral imaging, biometrics has moved from being a partial solution to a secure, convenient and reliable alternative.

The promise of biometrics—worry-free performance as seen in the lab—was not fully realized in the field for many years. The core problem has been that conventional biometrics technologies rely on unobstructed and complete contact between the fingerprint and the sensor, a condition that is elusive in the real world, a world that can be wet, dry or dirty.

However, multispectral imaging is a sophisticated technology specifically developed to overcome the fingerprint- capture problems that conventional imaging systems have in less-than-ideal conditions. This more effective technology is based on the use of multiple spectrums of light and advanced polarization techniques to extract unique fingerprint characteristics from both the surface and subsurface of the skin. Subsurface capability is important because the fingerprint ridges seen on the surface of the finger have their foundation beneath the surface of the skin, in the capillary beds and other sub-dermal structures.

Unlike surface fingerprint characteristics, which can be obscured during imaging by moisture, dirt or wear, the “inner fingerprint” lies undisturbed and unaltered beneath the surface. When surface fingerprint information is combined with subsurface fingerprint information and reassembled in an intelligent and integrated manner, the results are more consistent, more inclusive and more tamper resistant.

Today, we see a growing number of banks worldwide deploying multispectral imaging biometrics solutions as part of their next-generation ATM rollouts. As the world attempts to put an end to ID theft and to reduce waste, fraud and abuse, the banking sector is making a real commitment to biometrics and intelligent identity management. With the growing cost of identity theft, the industry is finally responding and investing in new, more effective ways to ensure that transactions and personal identities are secured.

In most parts of the world today, common biometric solutions use a card plus a biometric to ensure that the user is authorized and legitimate. Often the card is designed to include a biometric template and, therefore, matching can be done locally and user credentials are carried by the customer.

Latin America Leads the Way with Biometric ATMs

With its highly advanced financial systems technology, Latin America is leveraging new technologies to increase the security of its systems. As a result, financial institutions in Latin America are embracing fingerprint technology for their ATMs. In addition to enhancing security, banks are able to provide additional convenience for their customers because there is no need for training—customers just put their fingers down. Biometrics, formerly employee-centric and typically confined to the back room, are now being put in front of the customer with confidence.

Brazil’s second largest state-owned bank, Caixa Econômica Federal (CAIXA), is currently deploying 3,500 biometric-based Diebold ATMs. Fingerprint readers are replacing the PINs that bank customers have historically used to authenticate their identity and access their accounts. With multispectral imaging biometrics, CAIXA customers now simply insert their card and touch the fingerprint reader to conveniently withdraw their funds and be on their way. There is no PIN to remember and no training required.

The bank’s Bolsa Família Program, which provides payments to low-income families to help keep their children in school, was the catalyst for using fingerprint biometrics to replace individual PINs for access. Many users in the program do not have bank accounts and use the ATM only once a month to get their stipend. As such, users often forgot their passwords, and bank managers were spending too much time getting PINs renewed or changed. With 14,000 ATMs involved in the program and more than 58 million registered customers, this was a major problem.

“CAIXA intends to expand the use of biometrics to other service channels such as Caixa Aqui Correspondents and Lottery shops,” according to a press release from the CAIXA Press Office. “Other products and services also will have the use of biometrics as an additional resource for user authentication.”

Not to be outdone, Itautec, an ATM provider, is now installing the first 12,000 units of a 33,000-unit ATM network with multispectral fingerprint readers for one of Latin America’s largest private banks. The multinational bank had concerns that multiple identities were being employed by some people within their banking system. The organization needed a way to ensure that each person had only one identity and provide all customers with secure access to their accounts. A biometric would solve both challenges.

High reliability is critical at the ATMs because their use is not typically supervised; there might not be a person on hand for customers to consult if a problem were to occur with a transaction. Because multispectral imaging technology provides good reads on the first try by viewing the surface and subsurface of fingerprints in any condition, fingerprint readers using the technology were chosen for the ATMs. As a result, security has been increased with a simple, easy, intuitive touch of a finger.

“Itautec has the tenth-largest number of ATMs being used in the world, so we needed a solution that works,” said Fabrizio Vargas, the person responsible for biometric systems at Itautec. “The system must work each and every time in order to provide the level of security and performance demanded by banking customers.

“This (biometrics) deployment is leading the way in showing the world’s banking community how to take the next step in providing convenience to their customers and security for themselves,” Vargas said.

Biometrics Beyond ATMs in Banking

In markets where an ATM infrastructure may not yet be established, as is the case in India, a biometric handheld device is used to authenticate both user and service provider to ensure proper delivery of service and provide a complete non-repudiated audit trail of those transactions. In India, the government has been diligently working for decades to find ways of providing services to the citizens of an entire subcontinent and, likewise, commercial entities also want to reach out to the poor, especially those who have been previously excluded because of the limited capability of conventional biometrics technologies.

With those goals in mind, long-term initiatives related to financial inclusion and public distribution systems have turned to biometrics as a means of securing field transactions and ensuring that citizens are protected and government services are being provided to those who are authorized to receive those benefits.

Thus, besides multispectral imaging sensors being used in biometric ATMs, they are also deployed in handhelds that act like micro ATMs in applications where banking services such as opening savings accounts, transferring funds, making deposits, withdrawing cash and obtaining loans are taken to remote rural areas where citizens have no access to banks.

These fingerprint sensors guarantee that rural employment beneficiaries are actually the people authorized to withdraw their weekly wages. Other multispectral imaging-based handhelds are being used in public distribution systems and education projects, where the biometric is used by citizens for collecting rations and for the authentication of students’ attendance reporting.

In South Africa, concern over fraud and identity theft has grown to a level where a banking risk information center (SABRIC) requires banks to take active measures to become “safe, secure and risk free.”

In 2003, several large banks in South Africa began to focus on measures to eliminate fraud and adopt identity systems that would utilize biometrics as a means to achieve their goals. Today, those deployments are moving from pilot stage to full-scale deployments.

After considering these examples, all in use today, American banks need to ask: What form of authentication will provide us with identity assurance, convenience and a compelling ROI? Biometrics is the only technology that assures identity and knowing “who” to a high degree of certainty. Biometrics also is unique in its ability to raise the bar on security without adding complexity for the end user.

This article originally appeared in the January 2013 issue of Security Today.

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