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Biometrics to profit from financial industry
NEWS centralised, automated fingerprint identification system (AFIS) in 1984. A Motorola AFIS system was installed reportedly resulting in a massive reduction in the time it took to search the fingerprint database manually during criminal investigations. Since 2002, Motorola’s technology has been deployed at border control points across the country.
financial
Biometrics to profit from financial industry
N
ew research has found that biometrics could be about to see strong growth in the financial industry. The new report from Frost & Sullivan - Banking on Biometrics: A Snapshot of Biometrics in Financial Services – claims that the financial services vertical is poised to be one of the key end-user markets for biometric technology globally. Frost & Sullivan has calculated that the financial biometrics market accounts for almost a third of the revenues of the total biometrics market revenues globally. Moreover, this is expected to grow at a compound annual growth rate (CAGR) of more than 50% from 2006 to 2013. Frost says that although the government and civil identity applications have been the early adopters and largest implementers of biometrics over the last few years, the commercial and the consumer sectors have become important target markets, especially financial services. This is in order to offset increased fraudulent activity and identity theft. In North America and Europe, regulatory compliance has been the biggest motivation for financial institutions to adopt biometrics, the analyst group said. Some prominent government regulations include: • • •
The 2005 Federal Financial Institutions Examination Council (FFIEC) guidelines; The Sarbanes-Oxley Act of 2002 (Section 404); The Basel II Accord.
Frost says that this regulatory activity has resulted in increased demand for secure authentication of banking accounts, stronger employee audit trails, and risk mitigation. Although the regulations do not endorse any specific technology, biometrics is emerging as the favoured choice, Frost believes, owing to its capability of being able to accurately link any transaction with an individual’s unique traits.
June 2008
In the developing regions of the world such as South Asia, Latin America, and Africa, biometrics is playing an important role in helping banks reach the vast rural population with innovative solutions. This segment of the population has been largely underserved by the financial services industry due to illiteracy and distance from bank branches. In particular, ATMs integrated with biometric sensors are growing in popularity, especially in developing nations. Since 2004, Columbia based Bancafe Bank has deployed hundreds of nonAFIS fingerprint-enabled biometric ATMs in rural Columbian towns to cater to coffee growers. Similarly, in 2006 in India, Citibank launched a non-AFIS fingerprint-enabled ATM to allow its microfinance customers to access funds sanctioned to them. The technology allows customers to withdraw funds using just their fingerprints rather than having to carry an ATM card. According to Frost, in the medium term, biometrically-enabled ATMs can be used for more unique applications. There is significant potential for relief organizations such as UNICEF to disperse aid through biometrically-enabled kiosks and ATMs. This would ensure that only the rightful recipients can access the funds. From a technology standpoint, Frost says that a diverse number of biometric modalities are finding applicability in financial services. Modalities ranging from non-AFIS fingerprint recognition, face, iris, vein, voice, signature, and hand geometry recognition have all found varying levels of acceptance. In 2006, non-AFIS fingerprint recognition was the dominant modality, the analysts said. The technology’s key strengths are its cost efficiency and high accuracy. It also has wide applicability in physical access control, logical access control, as well as transactional authentication. Non-AFIS fingerprint recognition technology is found across financial institutions for uses ranging from ATMs, access to bank vaults, and business PCs. Other emerging biometrics such as voice verification and vein recognition are also gaining traction globally, it was claimed. A number of banks in Europe have deployed voice verification technology to enable remote authentication of customers for telephone banking. In 2006, Netherlands based ABN AMRO deployed a telephone-banking customer verification solution utilizing voice biometrics in its contact centers. This installation is considered to be one of the largest deployments of biometrics in the financial services vertical. Vein recognition was largely prevalent in Japan and South Korea until 2005, said Frost. However, in 2007 it has begun to emerge as a popular alternative to non-AFIS fingerprint recognition, especially for biometrically-enabled
APPLICATION NEWS • A new contract has been signed between Argus and NSW Police in Australia. The contract is an additional annual service and support contract for the PhotoTrac facial recognition installation. Over the last 12 months Argus has continued to add new functionality to the product, introducing a range of operational efficiencies and the potential for it to be expanded and integrated into other police technologies. The service and support contracts are said to be worth approximately $190 000. • Gemalto has announced that it is the supplier of electronic Alien Resident Certificate (ARC) cards to the National Immigration Agency (NIA) in Taiwan. Gemalto has already delivered three hundred thousand identification cards, the first electronic foreigner identification cards in Asia. The size of a credit card, the new microprocessor-based electronic ARC is compliant with the ICAO (International Civil Aviation Organization) standard. The ARC allows the bearer to remain in Taiwan throughout the validity period, maintain a local currency bank account, take ownership of vehicles and apply for a driver’s license. The National Immigration Agency plans to achieve replacement of all remaining paper cards by 2009. • Cognitec Systems, a German face recognition technology and systems provider, has announced that its FaceVACS technology has been selected by the Bureau of Consular Affairs (BOCA) of Taiwan as the core face recognition software for its ePassports initiative. Cognitec face recognition software is integrated within the CryptoMetrics VisMatch solution that is utilised to confirm the identity of passport applicants. These biometric solutions use scanned passport applicant photos, processed to International Civil Aviation Organization (ICAO) specifications for facial recognition to combat the use of forged or tampered travel documents. HP, as the prime systems integrator for the project, is providing the overall ePassport solution that includes design, development, integration and implementation of chip personalization, PKI information security technology and the integration of the CryptoMetrics-supplied image processing, image quality checking and face recognition systems.
Biometric Technology Today
3
NEWS
PRODUCT NEWS • UPEK has launched the TCS5 TouchStrip Fingerprint Sensor, a technology designed to be integrated into 2009 notebook PC models and bring fingerprint sensors into the mainstream market. The TCS5 showcases UPEK’s new SteelCoat sensor coating, which is made possible by HD3D (High Definition 3 Dimensional) amplified sensing technology that penetrates thick surfaces to read the “live layer” of the skin. The TCS5 is offered with UPEK’s next generation Digital ID Hardware Engine, a security co-processor that performs biometric processes in a secure, hardware environment. • Pretec has introduced a high capacity USB flash drive using biometrics. The 48GB i-Disk Touch S660 Databank enables fingerprint access control to both the USB key and local hard drive for secure storage. i-Disk S660’s fingerprint sensor has a rugged protective surface which is water-proof, anti-scratch and can endure heavy impact, the company claims. • Rise Computer has selected Atmel to provide its FingerChip fingerprint sensor solution for the company’s RX5622 LCD PC. The RX5622 features a slim, all-in-one 19” touch screen LCD display integrating the latest Intel Quad Core technology along with WiFi, Bluetooth, built-in speakers, Webcam and TV tuner. • The United States Patent and Trademark Office (USPTO), a federal agency under the Department of Commerce, has awarded a contract to Probaris in support of the agency’s efforts to comply with Homeland Security Presidential Directive 12 (HSPD12). HSPD-12 is a presidential directive, published in August 2004, mandating a common identification standard for all federal government employees and contractors. Probaris will install Probaris ID, its endto-end secure identity solution, to produce smart identity credentials for USPTO personnel. The USPTO will use the credentials for physical and logical access control within their enterprise architecture. • AuthenTec has announced its TouchStone fingerprint sensor packaging technology will enable future generations of waterproof cell phones, including a new phone to enter high-volume production in the fourth quarter of 2008. The smooth, durable and waterproof packaging technology is AuthenTec’s newest fingerprint sensor packaging.
4
Biometric Technology Today
ATMs and increasingly for physical access control. Despite vein recognition’s high cost when compared to non-AFIS fingerprint recognition, its contactless interface, low failure-to-enrol rate, and lack of association with criminal activity places the technology in a strong growth position. At present, vein recognition is in the early adoption phase, but has the potential to become a widely deployed solution as its price is anticipated to decline in the medium to long term. Looking to the future Frost says that most financial institutions have adopted biometrics for operational and employee-facing applications. Wider deployment in the financial industry is anticipated as the number of successful credible reference sites increases and financial institutions realise the cost-efficiencies and benefits of biometric technologies in comparison to alternate security technologies. From an end-user perspective, it is imperative to publicise the benefits that biometrics can offer in terms of convenience, cost efficiencies and time efficiencies, says Frost.
corporate
HR experts warn employers to tread carefully with biometrics
E
mployers are being warned to tread carefully and follow the letter of the law when introducing biometric technology into the workplace if they are to avoid accusations that Big Brother’s shadow is falling over their staff. The warning comes from HR experts Croner, part of Wolters Kluwer in the UK, who note that biometrics are increasingly being used by employers to combat security breaches in the workplace. Croner says it has already seen some of its customers introduce biometric systems and is now advising others wishing to do so that they need to be aware of the potential issues and act accordingly. Gillian Dowling, employment consultant with Croner, said: “When introducing these kinds of systems to the workplace, employers must be mindful of the Data Protection Act. Alongside the need to follow the requirements of legislation there is the issue of acting in a responsible way to communicate clearly to all employees why their biometric data is being used in this way.”
The possible uses of the technology are widereaching and in addition to protecting sensitive information, include controlling access to buildings and clocking-in systems. With this in mind there is a need to communicate sensitively to all employees what the new technology means day-to-day. Gillian continued: “If the introduction is handled properly the benefits can be seen at all levels of an organisation in improved efficiency and security.” Croner’s advice to employers wanting to introduce biometric measures in the workplace is: •
•
•
when introducing a new system using biometric technology, employees need to be informed of the reasons for the introduction of the system, how the system works and the benefits to the employer and the staff; hold meetings with staff to demonstrate how the new technology will work and to answer employees’ questions concerning the operation of the system. trial a system before implementing it throughout the business.
Croner says that employers need to consider the impact of the Data Protection Act 1998. Employees will need to be reassured that their personal data (such as their fingerprints) will only be used for the purposes specified by the employer and that the information will be kept secure. Employers need to ensure that there are high standards of security in place to protect the information from being used for unlawful reasons or for any reasons which have not been communicated to the employees. The information also has to be protected from accidental loss, destruction or damage. Furthermore, employers need to ensure that the biometric data is destroyed when it is no longer needed.
border control
US biometric border exit strategy under fire
T
he Air Transport Association of America (ATA) – a US airlines trade organization – has issued a statement of support for a bill announced by the USA’s House Homeland Security Appropriations Subcommittee which, among many other items, withholds funding for the Department of Homeland Security’s (DHS) initiative to develop a system that uses biometrics
June 2008
financial
Biometrics to profit from financial industry
N
ew research has found that biometrics could be about to see strong growth in the financial industry. The new report from Frost & Sullivan - Banking on Biometrics: A Snapshot of Biometrics in Financial Services – claims that the financial services vertical is poised to be one of the key end-user markets for biometric technology globally. Frost & Sullivan has calculated that the financial biometrics market accounts for almost a third of the revenues of the total biometrics market revenues globally. Moreover, this is expected to grow at a compound annual growth rate (CAGR) of more than 50% from 2006 to 2013. Frost says that although the government and civil identity applications have been the early adopters and largest implementers of biometrics over the last few years, the commercial and the consumer sectors have become important target markets, especially financial services. This is in order to offset increased fraudulent activity and identity theft. In North America and Europe, regulatory compliance has been the biggest motivation for financial institutions to adopt biometrics, the analyst group said. Some prominent government regulations include: • • •
The 2005 Federal Financial Institutions Examination Council (FFIEC) guidelines; The Sarbanes-Oxley Act of 2002 (Section 404); The Basel II Accord.
Frost says that this regulatory activity has resulted in increased demand for secure authentication of banking accounts, stronger employee audit trails, and risk mitigation. Although the regulations do not endorse any specific technology, biometrics is emerging as the favoured choice, Frost believes, owing to its capability of being able to accurately link any transaction with an individual’s unique traits.
June 2008
In the developing regions of the world such as South Asia, Latin America, and Africa, biometrics is playing an important role in helping banks reach the vast rural population with innovative solutions. This segment of the population has been largely underserved by the financial services industry due to illiteracy and distance from bank branches. In particular, ATMs integrated with biometric sensors are growing in popularity, especially in developing nations. Since 2004, Columbia based Bancafe Bank has deployed hundreds of nonAFIS fingerprint-enabled biometric ATMs in rural Columbian towns to cater to coffee growers. Similarly, in 2006 in India, Citibank launched a non-AFIS fingerprint-enabled ATM to allow its microfinance customers to access funds sanctioned to them. The technology allows customers to withdraw funds using just their fingerprints rather than having to carry an ATM card. According to Frost, in the medium term, biometrically-enabled ATMs can be used for more unique applications. There is significant potential for relief organizations such as UNICEF to disperse aid through biometrically-enabled kiosks and ATMs. This would ensure that only the rightful recipients can access the funds. From a technology standpoint, Frost says that a diverse number of biometric modalities are finding applicability in financial services. Modalities ranging from non-AFIS fingerprint recognition, face, iris, vein, voice, signature, and hand geometry recognition have all found varying levels of acceptance. In 2006, non-AFIS fingerprint recognition was the dominant modality, the analysts said. The technology’s key strengths are its cost efficiency and high accuracy. It also has wide applicability in physical access control, logical access control, as well as transactional authentication. Non-AFIS fingerprint recognition technology is found across financial institutions for uses ranging from ATMs, access to bank vaults, and business PCs. Other emerging biometrics such as voice verification and vein recognition are also gaining traction globally, it was claimed. A number of banks in Europe have deployed voice verification technology to enable remote authentication of customers for telephone banking. In 2006, Netherlands based ABN AMRO deployed a telephone-banking customer verification solution utilizing voice biometrics in its contact centers. This installation is considered to be one of the largest deployments of biometrics in the financial services vertical. Vein recognition was largely prevalent in Japan and South Korea until 2005, said Frost. However, in 2007 it has begun to emerge as a popular alternative to non-AFIS fingerprint recognition, especially for biometrically-enabled
APPLICATION NEWS • A new contract has been signed between Argus and NSW Police in Australia. The contract is an additional annual service and support contract for the PhotoTrac facial recognition installation. Over the last 12 months Argus has continued to add new functionality to the product, introducing a range of operational efficiencies and the potential for it to be expanded and integrated into other police technologies. The service and support contracts are said to be worth approximately $190 000. • Gemalto has announced that it is the supplier of electronic Alien Resident Certificate (ARC) cards to the National Immigration Agency (NIA) in Taiwan. Gemalto has already delivered three hundred thousand identification cards, the first electronic foreigner identification cards in Asia. The size of a credit card, the new microprocessor-based electronic ARC is compliant with the ICAO (International Civil Aviation Organization) standard. The ARC allows the bearer to remain in Taiwan throughout the validity period, maintain a local currency bank account, take ownership of vehicles and apply for a driver’s license. The National Immigration Agency plans to achieve replacement of all remaining paper cards by 2009. • Cognitec Systems, a German face recognition technology and systems provider, has announced that its FaceVACS technology has been selected by the Bureau of Consular Affairs (BOCA) of Taiwan as the core face recognition software for its ePassports initiative. Cognitec face recognition software is integrated within the CryptoMetrics VisMatch solution that is utilised to confirm the identity of passport applicants. These biometric solutions use scanned passport applicant photos, processed to International Civil Aviation Organization (ICAO) specifications for facial recognition to combat the use of forged or tampered travel documents. HP, as the prime systems integrator for the project, is providing the overall ePassport solution that includes design, development, integration and implementation of chip personalization, PKI information security technology and the integration of the CryptoMetrics-supplied image processing, image quality checking and face recognition systems.
Biometric Technology Today
3
NEWS
PRODUCT NEWS • UPEK has launched the TCS5 TouchStrip Fingerprint Sensor, a technology designed to be integrated into 2009 notebook PC models and bring fingerprint sensors into the mainstream market. The TCS5 showcases UPEK’s new SteelCoat sensor coating, which is made possible by HD3D (High Definition 3 Dimensional) amplified sensing technology that penetrates thick surfaces to read the “live layer” of the skin. The TCS5 is offered with UPEK’s next generation Digital ID Hardware Engine, a security co-processor that performs biometric processes in a secure, hardware environment. • Pretec has introduced a high capacity USB flash drive using biometrics. The 48GB i-Disk Touch S660 Databank enables fingerprint access control to both the USB key and local hard drive for secure storage. i-Disk S660’s fingerprint sensor has a rugged protective surface which is water-proof, anti-scratch and can endure heavy impact, the company claims. • Rise Computer has selected Atmel to provide its FingerChip fingerprint sensor solution for the company’s RX5622 LCD PC. The RX5622 features a slim, all-in-one 19” touch screen LCD display integrating the latest Intel Quad Core technology along with WiFi, Bluetooth, built-in speakers, Webcam and TV tuner. • The United States Patent and Trademark Office (USPTO), a federal agency under the Department of Commerce, has awarded a contract to Probaris in support of the agency’s efforts to comply with Homeland Security Presidential Directive 12 (HSPD12). HSPD-12 is a presidential directive, published in August 2004, mandating a common identification standard for all federal government employees and contractors. Probaris will install Probaris ID, its endto-end secure identity solution, to produce smart identity credentials for USPTO personnel. The USPTO will use the credentials for physical and logical access control within their enterprise architecture. • AuthenTec has announced its TouchStone fingerprint sensor packaging technology will enable future generations of waterproof cell phones, including a new phone to enter high-volume production in the fourth quarter of 2008. The smooth, durable and waterproof packaging technology is AuthenTec’s newest fingerprint sensor packaging.
4
Biometric Technology Today
ATMs and increasingly for physical access control. Despite vein recognition’s high cost when compared to non-AFIS fingerprint recognition, its contactless interface, low failure-to-enrol rate, and lack of association with criminal activity places the technology in a strong growth position. At present, vein recognition is in the early adoption phase, but has the potential to become a widely deployed solution as its price is anticipated to decline in the medium to long term. Looking to the future Frost says that most financial institutions have adopted biometrics for operational and employee-facing applications. Wider deployment in the financial industry is anticipated as the number of successful credible reference sites increases and financial institutions realise the cost-efficiencies and benefits of biometric technologies in comparison to alternate security technologies. From an end-user perspective, it is imperative to publicise the benefits that biometrics can offer in terms of convenience, cost efficiencies and time efficiencies, says Frost.
corporate
HR experts warn employers to tread carefully with biometrics
E
mployers are being warned to tread carefully and follow the letter of the law when introducing biometric technology into the workplace if they are to avoid accusations that Big Brother’s shadow is falling over their staff. The warning comes from HR experts Croner, part of Wolters Kluwer in the UK, who note that biometrics are increasingly being used by employers to combat security breaches in the workplace. Croner says it has already seen some of its customers introduce biometric systems and is now advising others wishing to do so that they need to be aware of the potential issues and act accordingly. Gillian Dowling, employment consultant with Croner, said: “When introducing these kinds of systems to the workplace, employers must be mindful of the Data Protection Act. Alongside the need to follow the requirements of legislation there is the issue of acting in a responsible way to communicate clearly to all employees why their biometric data is being used in this way.”
The possible uses of the technology are widereaching and in addition to protecting sensitive information, include controlling access to buildings and clocking-in systems. With this in mind there is a need to communicate sensitively to all employees what the new technology means day-to-day. Gillian continued: “If the introduction is handled properly the benefits can be seen at all levels of an organisation in improved efficiency and security.” Croner’s advice to employers wanting to introduce biometric measures in the workplace is: •
•
•
when introducing a new system using biometric technology, employees need to be informed of the reasons for the introduction of the system, how the system works and the benefits to the employer and the staff; hold meetings with staff to demonstrate how the new technology will work and to answer employees’ questions concerning the operation of the system. trial a system before implementing it throughout the business.
Croner says that employers need to consider the impact of the Data Protection Act 1998. Employees will need to be reassured that their personal data (such as their fingerprints) will only be used for the purposes specified by the employer and that the information will be kept secure. Employers need to ensure that there are high standards of security in place to protect the information from being used for unlawful reasons or for any reasons which have not been communicated to the employees. The information also has to be protected from accidental loss, destruction or damage. Furthermore, employers need to ensure that the biometric data is destroyed when it is no longer needed.
border control
US biometric border exit strategy under fire
T
he Air Transport Association of America (ATA) – a US airlines trade organization – has issued a statement of support for a bill announced by the USA’s House Homeland Security Appropriations Subcommittee which, among many other items, withholds funding for the Department of Homeland Security’s (DHS) initiative to develop a system that uses biometrics
June 2008