US-based Bio-Key has secured a contract with an un-named bank for its finger-based biometric identification system, Web-key. The deal follows a number of recent implementations of biometric technology by financial services firms as part of the fight against fraud.
New Jersey-based Bio-key says a pilot of its Web-key system has been deployed at the commercial banking division of a major global bank which will be used to authenticate institutional customers conducting treasury transactions and electronic funds transfers.
The biometric technology will be used as an alternative to the current identity management system which is based on an electronic token. In the first phase of the pilot the technology will be used by internal staff before being rolled out for use by commercial customers in the second phase.
The Web-key deployment is the latest in a number of implementations of biometric technology at financial services firms. Earlier this month Columbia's Bancafe Bank introduce fingerprint scanning technology across its network of ATMs, effectively eliminating the need for customers to carry cards, while earlier this year Bank of China announced plans to roll out fingerprint authentication technology from Ontario-based Bioscrypt across 1000 branches. Japanese card issuer JCB International has also introduced biometric-based services that allow customers to access account information via mobile hand sets fitted with fingerprint scanners.
Finextra columnist and TowerGroup director Chris Skinner says that banks have to start exploring the use of biometrics in order to tackle hi-tech fraud. Research by TowerGroup shows that 35% of banks have a biometric authentication programme in place although and a further 10% of firms are piloting the technology. Skinner says spending on biometrics will increase from about $1.4 billion this year to about $4 billion in 2007 as the use of biometric technology becomes more mainstream.