In what could be a first, Toronto-based ING Direct, a phone and Internet bank owned by ING Group of the Netherlands, says it will provide home fingerprint readers for verifying customers' identities on-line.
The readers will be built into computer mice that ING will buy from Secugen Corp. of San Jose, Calif. Saflink Corp. of Tampa will provide software for comparing the readings with images to be stored in a data base. The system will make log-in passwords unnecessary at ING Direct's Web site, Saflink said.
The vendors announced the plan last week. ING confirmed the essentials but did not respond by press time to requests for further information, including an implementation schedule.
The bank's main products are savings accounts, retirement accounts, and mortgages.
Many financial companies have begun experiments using biometrics, the analysis of physical characteristics, to verify identities. For example, Bank United of Texas has installed eye-scanning technology in several automated teller machines.
But analysts said they knew of no financial institution that has sent out fingerprint readers to its customers.
"Banks are exploring biometrics for all aspects of their business," said Jackie Fenn, an analyst at GartnerGroup of Stamford, Conn. "But I haven't seen banks ship out fingerprint readers to do on-line authentication."
Ms. Fenn said biometric systems are more secure than password-protected systems, because passwords can be stolen. Also, customers can forget passwords.
Setting up a biometric ID system entails big costs, however, Ms. Fenn said. Stand-alone fingerprint readers typically cost about $100, and verification software must be bought. But biometric ID could ease security worries that have deterred some banks from letting customers initiate big transactions on the Internet, Ms. Fenn said.
But Charles Rutstein, a security analyst at Forrester Research in Cambridge, Mass., expressed doubts that ING is spending its money wisely in going to on-line biometric ID instead of just adding digital certificates to enhance on-line security.
"My guess is they are thinking there is a segment of the population that is worried about security, and this is a way to tap that segment," Mr. Rutstein said. But consumers who shy away from on-line banking in the first place are unlikely to find reassurance in biometrics, he said. "These are the people who like to see a live person at a branch, so I think the effort is mismatched."
What's more, Mr. Rutstein said, customers worried about privacy may be scared away by a system that involves storing images of their fingerprints in a bank data base.
