Researcher emphasizes biometrics process controls as financial services plan new deployments
Several banks and financial service companies have announced biometrics initiatives to enable secure and convenient transactions without using the traditional cards or cash, but a biometrics industry expert is warning that proper implementation of the technology is necessary for it to deliver intended fraud reductions.
Belarusian banks Priorbank, BPS-Sberbank, and BelVEB Bank are all expected to complete pilot projects for biometric authentication by the end of the year, local outlet BelTA reports.
Deputy Head of the Operation Office, Head of the Interbank Identification and Blockchain Department at OAO Non-Banking Credit and Finance Organization ERIP Irina Ignatovich announced at a press conference that the authority and the banks are testing banking app login processes with face and voice biometrics, and that once the pilot is closed, the tool will be available to any organization using the interbank client identification system.
Biometric authentication is the first stage of the pilot, and will be followed by biometric identification.
“It will be used when the interbank identification system does not have the [biometric] data. Both residents of Belarus and non-residents will be able to use the service in the future. The third stage will be possible integration with similar systems in other countries, first of all, countries of the Eurasian Economic Union for the sake of exchanging clients and products,” Ignatovish says.
POS system provider CrediMax has signed a Memorandum of Understanding (MoU) with Eazy Financial Services to join its biometric payment network, which would make it the first POS acquirer in the Middle East to accept “eazyNet” biometric payments, according to a company announcement.
“The provision of the biometric payment Network “eazyNet” will empower our cardholders to a safer more convenient and secure way to conduct all their transactions and purchases through point of sale (PoS) terminals and other payment acceptance channels using their fingerprint. We look forward to elevating our cardholder’s shopping experience to the next level,” states CrediMax CEO Yousif Ali Mirza.
Russia’s Sberbank is planning to test biometric payments with fingerprints and facial recognition replacing payment cards, bne IntellNews reports. Partner shops will install testing pre-registration terminals, allowing customers to register biometrics or linked their previously registered biometric data with a payment account for cardless transactions.
The state-owned bank is Russia’s biggest, and has a significant history of biometric trials and investments, including the purchase of biometrics firm Speech Technology Center earlier this year. Sberbank’s other biometric projects include Ladoshki (Little Palms), which would track children entering and leaving school, and enable school lunches to be paid for with biometrics.
Gunkalam village in India’s Vizianagaram district has been chosen by the State Bank of India to adopt biometrics for all payments and cash transactions as the country’s 100th ‘digital village,’ The Hans India reports.
“We have encouraged public to open bank accounts and at free of cost we have distributed 88 biometric machines, which are linked with their bank accounts. From tomorrow onwards every payment like milk, electric power bill, vegetables, cable bill, purchasing of groceries and medicines would be through those biometric machines only,” explains SBI Chief General Manager Mani Palvesan. “If anybody wants cash, they can withdraw Rs 2,000 from the machine.”
The ‘digital village’ initiative is part of a broader campaign to reduce India’s shadow economy, as well as fraud.
Whether the system, or any of the others above, will actually reduce fraud rates depends on the data controls built into the systems, argues Acuity Market Intelligence Principal Maxine Most.
“#Biometrics can’t deter #fraud if secure control over capture, enrollment, & data mngmt aren’t implemented. Shouldn’t be so easy for bank staff to commit #biometric #identitytheft” Most tweeted. The tweet refers to a story in the Hindustan Times of the creation of 200 fake bank accounts using Aadhaar biometrics.
The accounts were allegedly set up by a store owner with a contract for issuing duplicate prints of Aadhaar cards and a second individual with access to mobile SIM cards. The pair were arrested for using individuals’ biometric data and Aadhaar numbers collected by the store owner, along with redirected SIM cards, to open new accounts in fake names, which the two alleged criminals used to deposit the proceeds of online fraud. The accounts were opened with Fino Payments Bank, which had reportedly provided a merchant ID, biometric machine, and ATM kits for account openings.
The fraud was discovered as part of an investigation into the theft of 2.3 million rupees (US$32,000) from a member of parliament.
Like Aadhaar, the effectiveness of the controls for biometric processes in the above systems will likely be tested as they reach public use.
Aadhaar | authentication | banking | biometrics | data collection | data protection | fraud prevention | identity verification | India | Maxine Most | Middle East | Russia | secure transactions