Barclays is set to enable corporate clients to authenticate transactions using finger vein recognition technology, as the bank aims to replace passwords and PIN numbers with biometrics for all customers in future.
The Barclays biometric reader, due to launch for business users next year, will allow treasury and accounts staff to access online accounts and authorise payments in seconds by placing their finger in a small scanning device that connects to a laptop or PC via USB.
The technology, based on Japanese manufacturer Hitachi's VeinID system, uses near-infrared light to detect the flow of blood through veins, and is said to be more accurate and difficult to replicate than fingerprint scanning.
The system will be available from 2015, and the bank, which recently launched a voice recognition system, expects that biometrics will eventually be extended to its 12 million retail customers – such as use at ATMs.
“Biometrics is the way to go in the future – there is no question about that. We are committed to that kind of platform,” said Barclays CEO, retail and business banking, Ashok Vaswani, at a launch event on Wednesday.
“We are testing different platforms and it is just a matter of time before we get this out more broadly.”
He added: “Right now the way the reader is configured lends itself to nicely to corporate usage, not retail. We are working very closely with our partners at Hitachi to see how this can be taken to the next level.”
(Michael Mueller, Barclays head of cash management, pictured above)
Barclays said the system offers security advantages over traditional authentication practices, and can help prevent fraud. For example, in some cases business customers – which may be authorising multimillion pound payments - will share PIN numbers and passwords between staff, which can be stolen and used fraudulently.
Barclays claims the chances of the reader incorrectly authorising a scan attempt are approximately one in a million, and users are allowed up to 20 attempts before the device is locked.
The biometric data is stored on a personalised cryptographic SIM card within the device – and not on Barclays’ internal systems.
Barclays and Hitachi claim that the biometric reader is the first to be used by a UK bank. However the technology has been deployed by lenders in different countries. BPS Bank and Podkarpacki Bank Spoldzielczy have also used Hitachi’s technology since 2010 to allow retail bank customers to withdraw funds from ATMs, and finger vein biometrics have been adopted in Japan, America and parts of the Middle East.
Also, Italian bank UniCredit has deployed a palm-scanning device for payment authentication at point of sale systems, relying on similar vein blood-flow technology.
For the bank itself, it will mean reduction in the number of calls it receives, in line with wider plans to invest in technology to streamline and automate its business.
“[The finger vein biometrics] is part of a bigger strategy we are pursuing very actively on the digital side," said head of cash management, Michael Mueller.
The bank has already rolled out voice recognition software that can automatically verify telephone banking customers' identities in its wealth, bringing to an end the need to rely on lengthy security passwords. The bank plans to offer the technology, based on voice biometric software from Nuance, to all customers during 2015.
The system works by recording a customer’s voice when they sign up to the service, and storing it in a secure database. When the customer calls back in future, their speech pattern biometrics are matched with the previous recording, and the call centre staff are alerted that the identity has been verified.