Outline
There are two aspects to this study, the first being the study of the chosen technology that is, the use of biometric scanning in the banking industry and how it could possibly further the cause of banking business. The main aspects that are being covered in this study would be the evolution of biometric technology over the years and its usage. The study would dwell on how this technology works, who are the major suppliers, and to whom they cater. (The consumers). Next, the study needs to consider the uses and application of biometric scanning technology and considers the strengths and weaknesses of this technology. It is necessary to determine this in order to arrive at an unbiased and authentic conclusion on the subject. The strengths are in terms of whether crimes could be totally avoided if biometrics are used and whether large investments in biometrics are justified by added benefits and advantages. The success and failure rates of this are also considered in that in certain known cases, eyes have been gorged off, hands chopped and fingers severed in order to facilitate biometric spoofing. But experts believe that such actions do little to demean the technology itself since it is dependent upon the quality and fidelity of inputs and the systems, left to itself are incapable of arriving at the right decision and need to be humanly monitored and controlled.
The study then considers the future trends of the technology based on past performances. While it is seen that government departments have been the major users (and Beneficiaries) of biometric technology, it is believed that in the years to come, with lowered installation costs, the private sector would be a major player in biometric technology in the years to come.
The future of this technology would depend, to a large extent, upon the confidence that is reposed on it by its users, institutional or otherwise. This would change because, in the years to come, there would be a need to reinforce sensitive sectors like banks and financial institutions, not only from the vagaries of the money markets but also from criminals and malicious system intruders. This needs to be given top priority since banking forms the bulwark of commercial business.
This study also considers the forces that could make it necessary to effect changes in the banking systems, so that it addresses the problems caused due to lowered security and customer privacy, needing a more emphatic use of biometric systems to filter transactions and ensure maximum security to customers and bank alike.
Finally, the study concludes on a note of optimism that the enhanced role of biometric scanner technology augurs well for the international banking scenario.
Executive summary
It is seen that 21st Century has witnessed an alarming rise in banking irregularities and malpractices, which has created the need to have an absolute foolproof and effective system that could possibly thwart and prevent such occurrences in the future.
In this context the importance of biometric technology, which has been practiced, albeit in its rudimentary form, since the 14th Century has assumed center stage, as a robust method of controlling identity theft crimes and their consequential ramifications. This study is intended to study the importance of biometric technology, its origins and evolution over time, and how it impinges upon the banking business in modern times.
While aspects of loss of customer right to privacy and confidentiality, and perceived errors in transacting and processing biometrics are no doubt present, it would be a travesty of truth to believe that it is not without strong benefits, especially in the banking sector that is susceptible to vagaries, threats, and challenges of financial markets.
It is believed that eventually, a more wide-ranging, all-encompassing, and better deployment of biometric technology could take place in later years in order to deal effectively with customer transaction safety and enhanced need for stronger security of transactions and monetary dealings.
It is understood that even small and medium-sized banks have felt the need to protect and encrypt customer databases and ensure the protection and confidentiality aspects of customer transactions within the legal framework.
Introduction
Biometric technology is a recent phenomenon but it has overriding benefits, especially in the areas of corporate and internet crimes. This could be used through the storage of individual characteristics like fingerprints, signatures, vein patterns, and hand geometry in banking data storage systems. (Krawczyk & Michaud, 2005).
The technology is mainly used by using templates stored in the encrypted database. When given data is matched with the template, the latter is able to identify whether it matches or not. In simple terms, the templated images need to recognize the inputs or reject them. If accepted, it forms a genuine transaction and if not, it could be a case of identity theft or some kind of crime or offense for defrauding or ostensible criminal activities. Although biometric technology may not be 100% practicable on all occasions, it does possess the faculty of preventing crimes associated with identity thefts, tardy attendance at banks, and a host of other infractions committed either by insiders, or outsiders in banks.
Research hypothesis
This study wished to critically examine and if possible affirmatively confirm that the hypothesis – Biometric scanners improve the Security for banks and their customers.
Historical Background
The earliest known forms of biometrics were a form of fingerprinting practices in ancient China during the 14th Century. This was chronicled by the traveler Joao de Barros. It envisages the making of the palm prints and footprints of children in order to distinguish them from one another. However, during the later part of the 19th Century, Alphonse Bertillon attempted at making biometrics a distinct science by recording physical measurements of prisoners. However this was short-lived when cases arouse of mistaken identities of two different prisoners having the same “body measurements.” ((n.d.), A brief history of biometrics: European origins).
During modern times, technology has relied heavily on fingerprinting and hand scanning as tools for safety and security in banking transactions. In the case of Japanese banking companies, both Fujitsu’s (palm scanners) and Hitachi’s (finger vein scanners) provide biometric technology.
“Hitachi counters that finger-vein scans are just as reliable and can confirm a person’s identity faster—0.5 seconds vs. 1.5 seconds for Fujitsu’s.” (Hall, 2007).
What is technology?
The technology is very simple. The biometric data of customers are taken and stored in an encrypted storage database in the ATMs or teller counters. When a withdrawal request is requisitioned, the data in the template is compared with the one provided and matched. It is only after this match is cleared is the transaction passed for payment. In case of negative results, hidden video cameras in the ATM s or cash counters provide images of the person for initiating further action.
How does it work?
Biometrics could be used both for verification and identification purposes. Under the verification process, the biometric data is matched against the individual’s data stored in the system’s database, in order to establish a person’s identity. This is also known as “one-to-one matching” Under this procedure, the verification can be established immediately. The other aspect is that of identification, in which, a person’s identity is tried to be matched with a host of biometric templates. This is also called “one-to-many “matching. (Rozensweig, Kochems & Schwartz, 2004).
The difference between verification and identification techniques is that, while the former asserts positive confirmation, (identity has been established) the latter is done for eliminating the possibilities of matching (this biometric model does not match with captured templates in the database) used for crime-fighting and white-collar crimes. What the biometric analysis establishes is that, through scores, the scores established by the biometric data are matched with the scores gained in the database, and if they are, more or less, equal, it could be concluded that the two images have matched. “Almost all systems can determine whether there is a match between the person’s presented biometric and biometric templates in a database in under one second.” ((Rozensweig, Kochems & Schwartz, 2004).
Who are the suppliers and consumers?
Hitachi Australia Ltd. “Hitachi’s System Solutions have developed Hitachi’s patented Finger Vein Authentication Technology. Finger Vein is a quick, fail-safe, non-invasive means of identity authentication, which is already being widely used in Japan.” (Biometrics institute supplier members at a glance: Hitachi Australia Ltd, 2008).
The major consumers would be government and commercial establishments, global systems integrators and builders, telecom companies, call centers, etc. It could also be used in “correctional centers Correctional Centres/Prisons, Airports, Banks, Embassies, and Government Buildings.” (Biometrics institute supplier members at a glance: Mondami Pty Ltd, 2008).
Besides the above, biometric technology can be installed in “organizations across state and federal governments, financial, manufacturing and industry. “ (Biometrics institute supplier members at a glance: KAZ Group Pty Ltd, 2008).
Arguments: Prove or disprove
Although it is seen that biometric technology in banks is safe and efficient and accounts for minimum error, it is necessary to take account of the overall existing technology before considering a full-scale deployment of this technology. This is because it has concomitant advantages and disadvantages and there is no complete guarantee that crimes cannot be committed, even with the use of biometric systems. What would be more important is the size and scale of operations of the bank in question, the strengths and weaknesses of the present security system, the present rate and types of crime, and the possible benefits that would augur through deployment and execution of biometrics. It would also be necessary to provide institutional support and changes in the present systems that may need to be permanent in nature to reap the full advantages of biometric in its most appropriate form and context.
Use of the technology
The use of the technology would depend upon the actual requirements. Biometrics can be used in both verification and identification forms. In the banking industry, it would be in terms of the acceptance format, whether the fingerprint or hand inputs match with the templates available and the scores rendered. Therefore the main use would be in terms of preventing fraud and manipulation whether internal or external. Again, it could also be used in restricting entry of personnel in sensitive areas, or parts of a building. In such cases, only authorized people or vehicles are allowed access to such areas, for security reasons. In other words, biometrics could help fortify security in certain areas by providing “monitoring of access areas.” (Cooperative biometrics abnormality detection system (C-BAD): Objects and advantages, 2008).
The Banking industry is particularly sensitive since it deals with a large number of hard currencies and instruments which could be easily converted into cash. Further, there are high possibilities that errors and frauds may go undetected for long, by which time its perpetrators could have reached a safe haven. Further, it is also seen that most irregularities in banking institutions are perpetrated by insiders in collusion with other members or outsiders. For example, it is possible for bank staff to gain access into a dormant account of a customer and transfer huge funds to another account with the least suspicion of officials if he has access to the personal ID number and access details of the customer. Again remote-controlled frauds or other forms of “criminal misconduct” could also be made through internet deployment without raising suspicion or concern. (Salinger, 2005, p.75).
Therefore it becomes necessary to have to robust, regular, and ever vigilant system that could possibly thwart nefarious deeds even in the least expected, or doubted areas.
Application of the technology
Through the use of biometric technology, especially fingerprinting, the portals of advanced crime-fighting agencies would be reinforced and potential criminals would have to seek out newer methods of infiltrating into banking security systems since all attempts are being made to render the systems as foolproof and crime resistant as possible.
The technology of biometrics could also be used to fight crime against the banking system because certain aspects like iris and face scanners, voiceprints, digitalized fingerprints, retina imprints, etc have significantly enhanced security and safety areas of the banking world and financial transactions involving large sums of money.
The system provides for intercepting and preventing frauds of high volumes and magnitudes often running into billions of dollars, from happening, in the first instance, or even if they do, the system ensures that the perpetrators are quickly apprehended and summarily tried for their crimes.
Iris scans are an effective method for determining a person’s true identity since they form a permanent feature of a person’s physical characteristics and cannot be compromised during his lifetime.
Strengths and weaknesses
Seen in the light of the fact that security of systems and assets occupies a paramount position in modern business, particularly in banking sectors that deals with convertible assets, it is necessary that strong preventive and authorization methods are enforced and regularly monitored to audit the nonoccurrences of frauds, errors, and banking malpractices that significantly erodes and undermines not only individual banks, but also the banking sector as a whole. Therefore biometric technology with its inherent strengths of crime prevention and detection could serve the best interests of banking sectors over a long period of time. The main strengths of biometrics could be seen as:
- The scientific basis of evidence
- Easy to operate systems and scanners
- No perceived health hazards- exposure to iris scanners is like moving in the sunlight for some time
- Immediate results within few seconds- no need for further processing. For instance, if an unauthorized person enters an ATM with a duplicate credit card, the system would be jammed and video cameras could conduct facial recognition and if necessary, alarm systems could sound at the nearest police station. His detention could be made within a few minutes.
- Possibilities of further improvements and security enhancement of the systems. Since crimes are novel, it is necessary to also upgrade technology to circumvent occurrences of any kind of criminal activity. Fingers, hands, eyes, face, voice, all are in use and could relegate PIN-based security to history. (Sullivan, 1997).
The main weaknesses of the system could also be seen in the following:
- Failure to enroll (FTE): The success of biometrics depends upon the use of technology. (Nanavati & Thieme, 2002, p.33). If there are inherent deficiencies, for instance, fingerprinting of calloused and wrinkled hands cannot be confirmed, or certain iris details do not register in iris scanners.
- False match rate (FMR): Sometimes due to wrong deployment or processing errors, data that do not match may be matched, thus rendering the system error-prone. “A false match rate is expressed as a statistic such as ‘1 in 1000’. ” ((n.d.), ICTs: e-government: Typical false match rates).
- False nonmatch rate (FMR): Sometimes due to wrong deployment or processing errors, data that match may be mismatched, thus rendering the system, once again error-prone. “user is denied entry.” (Thuraisingham, 2005). Therefore to a large extent, it could be said that the determination of its success would depend largely upon the accuracy and fidelity of the inputs into the biometric system and not the system as such.
- Cost of installing and deploying a biometric system: In a cost-benefit analysis, it could often be seen that the costs may be prohibitive and do not match the professed benefits. “The cost of implementation and the potential for customer resistance have given financial institutions pause.” (Giesen, 2006). When considering the needs of certain banks, biometrics may not be considered an appropriate solution.
- Success stories and failures: It is seen that there are many success and failure stories in the arena of biometrics. There have been instances when the hands of people have been chopped off in order to use them for biometric deployment and signatures and fingerprinted duplicated in order to tamper with biometric systems. However, this does not deter the success and deployment of the system since it has more benefits than perceived threats. Especially in a banking business with public accountability, it is necessary that the highest and strictest control over asserts are maintained on a sustainable basis in order to avoid the challenges of lowered risks and challenges.
Future trends
What is the future of this technology?
It is seen that government departments have been the major users (and Beneficiaries) of biometric technology, it is believed that in the years to come, with lowered installation costs, the private sector would be a major player in biometric technology in the years to come.
However, the banking industry would ask whether heavy investments are necessary when the exiting systems are working well and frauds, etc are taken care of by other defenses. Moreover, the banking business is not so much exposed to biometric dangers as would be other sectors like cross-border terrorism, violent crime, and enforcement,. It is felt that in the area of financial markets and banking institutions it would take more time for biometrics to be a part and parcel of this system. Till such time, enhancement in present systems with the accent on encryption, firewalls, strong and reinforcement of authorization and authentication of identifying with least probability identity thefts would claim precedence.
How will it change?
The impact of corporate crimes and banking frauds could change the scenario. In the past, such crimes have been dealt with by internal machinery and the law enforcement and strong legislatures have come about only at his time of prosecution of alleged criminals. But it is believed that since terrorism and cross-border funds movements are nexed, biometrics would deal need to deal with terrorism and related activities more frequently in the future.
What forces are causing the change?
For one thing, government policies towards terrorism and anti-social activities have changed, post 9/11. The stronger accent is being placed on funds transfers from one state to another, sourcing and deployment of funds by suspects, and enforcement of banking regulations in these situations. Audit trails have become mandatory and impinged upon the performance and sustainability of banking institutions.
Conclusions: What are your key findings (response to your hypothesis)?
It could be concluded that despite certain deficiencies in biometric systems, it is a very useful and deployable tool in the modern banking business.
This could be seen from the fact that nowadays, even smaller and medium-sized banks have felt the need to protect and encrypt customer databases and ensure the protection and confidentiality aspects of customer transactions with the legal framework. In the future, it is believed that the use of biometrics could even entail enhanced use of DNA, vein scanning, and enhanced use of gait, speech, and hand scanning as a routine mechanism for banking activities. Thus, the hypothesis that Biometric scanners improve the security for banks and their customers has been proved correct considering the fact that it has been universally endorsed and this technology is fast gaining reputation and credibility as a major and effective tool to circumvent and detect irregularities in the banking business.
It is widely believed that the future years would witness an even better usage and deployment of biometric scanning technology for banking advancement and betterment.
Appendix
References
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