Biometrics in Financial Services
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The biometrics industry has looked to financial services as one of the key markets poised for explosive growth, and to some extent has been deceived by the widespread and broad-based tests and pilots that have been conducted over the last seven years. Make no mistake, the financial services industry will continue to spend significantly on these trials. (In some cases, the financial sector will spend more for pilots than other industries will spend on full deployments). However, while this may offer substantial opportunities for biometrics revenue generation, the large-scale, multi-faceted deployments that will create tornado like growth are at least three to five years away.
The development of tightly integrated biometric-based financial service systems that serve millions will take time to develop and deploy. While much of the focus within the biometrics industry has been on improving the accuracy, efficiency and reliability of sensors, devices and software, the technology itself is actually working well enough to satisfy real-world deployment requirements. The substantive issues have to do with database storage and replication, the interoperability of various biometrics, open source, vendor independent templates and enrollment processing and management.
Over the past several years, financial institutions have invested heavily in IT infrastructure including CRM, ERP and other process improvement technologies. Much of the promise of these innovations have not panned out and companies are straining to leverage the investment they have made. Additional IT spending by these organizations will be driven by the achievement of short term objectives and quantifiable ROI. In order for biometrics to really penetrate the financial services industry, players must provide solutions for painful enterprise wide problems that seamlessly integrate with existing ERP and CRM products and enhance these processes.
Interestingly, one issue that appears to be a non-issue is consumer acceptance. This is especially true at the point of sale. Several vendors have taken biometrics directly to consumers in retail applications and much to the surprise of many industry pundits and privacy advocates alike, consumers are responding with intrigue and enthusiasm. Initial POS-based biometrics—much to vendors’ delight—appear to be highly successful. Though, once again, large-scale, widespread POS deployments face daunting infrastructure and integration issues.
Though widespread large-scale deployments of biometrics in the financial services may not happen quite as fast as many would like and may face more substantial obstacles than hoped for, progress is being made and initial success indicates the future is bright indeed.
C. Maxine Most, July 2002