The widespread adoption of biometrics within the financial services arena could be delayed by up to a decade as a result of high implementation costs and a lack of industry consensus, says new research from TowerGroup.
A new report, "Biometrics: Security for the New Millenium?", suggests that contrary to popular belief, concerns over privacy will not keep consumers from adapting to biometric screening. Instead, convenience will be the key to acceptance of the technology in retail financial services.
Biometric technologies analyse the unique biological traits that differentiate one human being from another, such as fingerprints, the retina or iris of the eye, or the patterns of an individual's voice. Data gathered by some of these technologies, particularly iris patterns and fingerprints, are unique enough to distinguish a single individual from the entire global population.
By accurately validating clients' identities through their physical or behavioral characteristics, financial institutions will be able to drastically reduce costs related to identity theft, while simultaneously assuring consumers that their financial assets are well-protected.
For biometric authentication to be used at a retail level, technologies must be convenient, able to stand up to heavy use, accurate and cost-effective, says TowerGroup. Few of the technologies currently available offer all four of these qualities, states the report.
The research company believes every financial services delivery channel has a possible application for biometrics: call centres can adopt voice biometrics; the branch and ATM can use fingerprint, iris, hand or face recognition systems; for online access, keystroke biometrics could be used.
The high cost of implementing these technologies is currently the single greatest barrier to their roll-out across retail financial services, says the report. Ultimately, an institution would have to retool every customer touch-point with new biometric hardware, in addition to costs for training personnel, educating consumers through marketing materials and integrating biometric technologies with existing IT systems.
TowerGroup believes either private sector consensus or government mandate will be essential to developing interoperable biometric authentication systems.
Jean-Paul Carbonnier, analyst in TowerGroup's retail brokerage and investing practice, says concerns over national security now stand side-by-side with more business-driven authentication issues-such as fraud prevention - as well as with questions about the protection of individuals' privacy and civil liberties.
"Ultimately, TowerGroup believes that the government will need to play a key role in any broad roll-out of biometrics technology," he adds. "If implementation is left to the private sector alone, the national security and business benefits of ubiquitous biometric identification may take at least 10 years to reach."