Banking

Biometrics likely to play big role in future of banking transactions

In the future, ATM transactions could use near field wireless communication technology; customers would simply need to wave their mobile device near an automated machine.
In the future, ATM transactions could use near field wireless communication technology; customers would simply need to wave their mobile device near an automated machine. The Wichita Eagle

In the satirical 2006 science fiction film “Idiocracy,” characters in the movie, set in the year 2505, use a tattooed UPC code on their wrist to complete automated teller transactions.

While the goofball cult classic depicted mostly absurd futuristic situations, the movie may have gotten some things right … sort of.

Biometrics — personal authentication techniques that rely on physical characteristics, such as fingerprints or voice recognition — are slowly becoming more popular in the payments industry, meaning that banks will likely be on the front lines of the changes.

“Banks want to know what customers want and how they can help customers get it,” said Tom Morrison, a payments and technology director with Intrust Bank.

At our core, we want to provide customers safe, secure and convenient access to their funds. That consistency, really, has always been there through whatever the technological innovation of the day is.

Tom Morrison, Intrust Bank

“At our core, we want to provide customers safe, secure and convenient access to their funds. That consistency, really, has always been there through whatever the technological innovation of the day is.”

Later this year, JPMorgan Chase plans to roll out new or enhanced ATMs that will allow for withdrawals and other transactions through a customer’s smartphone. Chase spokesperson Maura Cordova said most of the bank’s 18,000 ATMs will feature the smartphone service by the end of 2016.

The transaction would simply require a Quick Response (QR) code or another fast-acting identification measure from a Chase application on the phone.

“Today, our ATMs and the new eATMs can perform about 60 percent of transactions our customers do at the teller window,” Cordova said. “This year, we’ll enable customers to use their mobile phones to authenticate at Chase ATMs in case they do not have their debit card with them.

“The journey will continue next year as we introduce Bill Payment, enabling customers to make their Chase credit card and mortgage payments at the ATM.”

Near field wireless technology

In the future, ATM transactions could also use near field wireless communication technology – used for Apple Pay and Samsung Pay options – so customers would simply need to wave their mobile device near an automated machine.

Damon Ellsworth, vice president and payments manager for Emprise Bank, referred to these types of payment methods as “mobile experiences,” adding that they are likely to only become faster, more accepted and more secure.

“Security will also come along with services delivered via mobile device,” Ellsworth said. “I believe we’ll stop seeing the compromise events that you see now because data will be much more secure at the merchant locations.

“These mobile wallets are also much more secure than payments of the past. We’ll continue to see biometrics evolve, I believe.”

Eventually, customers will likely be able to withdraw cash, transfer funds and make payments – essentially conduct business – at an automated machine using biometric authenticators like voice recognition, facial recognition and thumb print.

In the near future, bank customers will likely be able to withdraw cash, transfer funds and make payments at an ATM using biometric authenticators like voice recognition, facial recognition and thumb print.

“I’ve seen and heard about some very interesting technology with voice recognition,” Ellsworth said. “To validate, people might be asked, for example, to hold their phone up to their face.

“With voice recognition, there could be a display of words that you would say back. Through an enrollment process, the system would very quickly learn how you speak, picking up on tiny nuances.”

Ellsworth said advances like these would likely alleviate the need for people to remember passwords, which can be easy to forget or misplace.

“It’s no longer going to be about static information, like what street a person grew up on or what their color is,” Ellsworth said. “It’s far more difficult to counterfeit these types of (biometric) characteristics.

“We’re already seeing use of one-time codes or passwords for different types of transactions, and I think we’ll go on to biometrics eventually.”

Consumers will ultimately decide

As with any new service or technology, widespread use will depend largely on how consumers respond. As Morrison pointed out, merchants will be interested to know what the masses want and what they are comfortable with.

For the future of banking, I think we’ll be looking at consolidating three things – the smartphone, the driver’s license and the payments card.

Tom Morrison, Intrust Bank

“Clearly, mobile is one of the key emerging preferred access channels,” Morrison said. “For the future of banking, I think we’ll be looking at consolidating three things – the smartphone, the driver’s license and the payments card.”

Morrison said Intrust Bank has looked at some of these new payment and authentication methods but as of yet does not employ them. As we move into the future, Morrison said, banks could play an added role for consumers.

“If you think about what banks provide today, we provide secure access to funds,” Morrison said. “A long time ago, that could be currency sitting in a vault. Now, it’s information about your account digitally stored online. With that, there’s always the concern of trust.

“When people want to know who can provide trust to a situation – such as a peer-to-peer transaction – that’s where, I think, banks and financial institutions play a role. We can help with authentication.”

Let’s just hope we’re never required to get a government-issued tattoo to do so.

Bryan Horwath: 316-269-6708, @bryan_horwath

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