Samir and Raj Nanavati want to be the Lewis and Clark of banking industry biometrics.
The brothers have formed a New York-based consulting company, the International Biometric Group, to map out the uncharted territory of using physical characteristics to verify customer and employee identities.
The firm's formation is another sign that biometrics-the most familiar example being fingerprints-is on the cusp of general acceptance in banking.
Because of their uniqueness, biological or behavioral characteristics like finger and hand scans, voiceprints, eye patterns, facial features, and signature dynamics are generally viewed as far more accurate and secure than passwords and numerical codes-assuming they are both economical and practical.
The Nanavati brothers said system costs are dropping and technologists are making the systems more palatable by reducing their intrusiveness.
The ideal biometric, which Samir said does not yet exist, would be effortless and non-intrusive to the consumer and inexpensive and accurate for the bank.
As fraud continues to rise in many sectors of banking, and as face-to- face contact with customers declines, the industry is growing more open to alternative security measures.
"The risks inherent in all banking transactions lend themselves nicely to an initial implementation of biometrics," said Samir.
He and his brother Raj between them have educational and work experience ideally suited for their consulting specialty.
Samir studied information systems and management at New York University's Stern School of Business. Raj is a patent lawyer who spent his undergraduate years at Tufts University studying biology.
"The law and biology fields are a good match for biometrics," said Raj. "Biometrics focuses on the physiological characteristics of the body, and then there are the legal implications of this untested industry."
Their International Biometric Group offers to serve as an intermediary between vendors of biometric technology and banks that want to use it.
Their role, as they see it, is to explain how best to put a particular biometric technology to use, or to find the right biometric technology for a particular application.
"We got our experience analyzing situations and interacting with vendors," said Samir.
"We help clients think about their problem in a more organized fashion. We lay out the criteria-What is important to you in this project? What are the key critical success factors?-and then we lay out the alternative biometrics that are open to debate," he added.
The brothers work full-time for the International Biometric Group, which hires additional consultants as needed.
"The work we receive we contract out, depending on the project and location," said Samir. "The appropriate people stay on site for as long as is necessary." He is currently on assignment at a major U.S. bank he does not want to disclose.
Planning a biometric implementation usually takes between two weeks and six months. The International Biometric Group will plan and manage pilots, and based on their results, assist in a decision on whether a bank will roll out a system across its enterprise.
Though some biometrics work better than others, Samir said no single system is good for all areas.
"It is foolish to assume that one biometric can satisfy all identification needs in the banking arena," he said, adding there is "a learning curve for everyone. The easy thing is to move up the learning curve; the difficult part is to stay on top of it, to know what is going on and to understand developments taking place."
There are several kinds of biometric identifications available for banking applications, but two in particular are getting attention.
The first uses imaging technology to capture a person's fingerprint. Once captured, the print is compared to a master file, and a transaction is authorized if a match is found.
The other captures an image of a person's eye, and compares the characteristics of a retina to a master file.
Because most U.S. banks interested in biometrics are only testing them, there are few figures on how many systems have been sold. Consultants and vendors alike said banks' interest in alternatives to personal identification numbers is on the rise.
About 91 vendors of biometric technology currently operate in the United States, and almost all have figured out ways to make their systems cheaper to banks and more acceptable to people.
For example, Sensar Inc. of Moorestown, New Jersey, has fashioned a system for identifying an automated teller machine user using characteristics of an iris.
Early versions of the system required customers to place an eye in front of a camera-an act few would willingly perform.
Using technology originally designed for the Department of Defense, Sensar tweaked the system to locate a user's eye and capture an image from a distance. The technology has been bought by a Japanese ATM company, and Citicorp is testing it.
When it comes to presence in the market, "fingerprints are dominating," said Erik Bowman, an analyst at Cardtech/Securtech in Rockville, Md. But there are a myriad of other choices available, and each has advantages and drawbacks.
Retina scanning is generally perceived to be intrusive, but can be extremely accurate.
Similarly, fingerprint systems are good positive identifiers but may suffer from their association with the criminal justice system.
Some less intrusive biometrics, such as voice and facial verification, are gaining adherents. Others, such as dynamic signature verification, face-heat pattern recognition and hand geometry are waiting in the wings. In fact, in number of units sold, Silicon Valley-based Recognition Systems, which manufactures hand-reading terminals, takes the lead.
To make a biometric fit, "you can change the biometric itself, you can change the specific implementation of it, you can do dynamic thresholding if the accuracy is not high enough, or you can do education to train your customers," said Samir.
Often he said, customers and employees feel most comfortable with projects that begin with small pilots.
Samir cited MasterCard International as one organization taking a leadership role in the field. It is testing a fingerprint recognition system that could some day replace personal identification numbers.
"If MasterCard rolls out this technology, it will influence everyone else," said Samir. "PINs are not generally liked by customers and fingerprint is a lot less work."
Most of the top 10 banks are looking at biometrics and "if they are not the first to roll it out, then they should at least have an understanding of the technologies," said Samir.
Community banks generally don't have technology budgets large enough to dabble in biometrics. Therefore, they are likely to be followers.
"The large banks will probably lead the way in deciding which biometric to use, and their buy-in is certainly needed to back a technology," Samir said. "Customers will then vote with their feet"-or hands.
Another development likely to affect acceptance of biometrics is the growing popularity of smart cards.
The memory chips in these cards can hold and verify the customer's biometric data.
This gets rid of the need for storing them in an expensive, centralized data base, which might carry the Big Brother stigma.
"The top priority for financial institutions is ... building the smart card infrastructure," said Ron Gerber, president of Gerber Industries, a New York-based consulting group."Biometrics are lumped into that and will probably be the follow-up."
