One Small CU Sees Big Reasons For Using Biometrics

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Biometrics is still a "fringe" identification technology-yet a $20-million CU here has scanned fingerprints to identify members at kiosks for five years.

Birmingham Post Office CU is not alone; other adopters swear by biometrics, trusting it as the only sure solution to identification fraud.

Most credit unions aren't biting, however. Only 10 % of the country's federal CUs currently employ biometrics, and more than half aren't even planning to use the foolproof approach to ID verification, according to an August NAFCU survey.

Biometrics are costly, immature and unnecessary, said survey respondents who are steering clear of the technology.

Yet $400-million Purdue Employees Federal Credit Union, West Lafayette, Ind., reported that biometrics have reduced fraud at kiosks more than the depreciated costs of the units, said Rick Scali, national sales manager at Real Time Kiosks, a Norfolk, Va. firm providing about 100 biometric kiosks to CUs nationwide.

Birmingham PO CU doesn't have to worry about fraud at its two kiosks, where members scan their fingerprints and can then apply for loans, get cash and a 90-day account history and deposit and write checks, said Janne Zuckerman, manager of the 3,000-member CU.

"Quite frankly, I'm baffled that more credit unions don't appreciate the value of biometrics," Scali said.

After learning that Real Time cut prices nearly in half last month, CUs may be more appreciative. For example, Real Time's most popular kiosk is now $35,000 instead of more than $52,000, he said. Installation and training costs have also been slashed.

Birmingham PO CU members who use the kiosk favor biometric identification, said Zuckerman, with 94% of members choosing to favoring scans over PINs. "We have a large population of members who work nightshifts and weekends, so the kiosks have definitely have been a benefit," Zuckerman explained.

Biometrics came on the scene in 2000 at a kiosk in the CU's main branch, located in Birmingham's post office. The CU added a second kiosk last year at the post office annex, where it stands alone and serves the CU's 450 members who work nightshifts.

"Members would prefer a live body, of course, but it's not cost-feasible for the credit union to have employees serve those members, and it would be very hard to get someone to work those shifts," Zuckerman said.

Members are increasingly taking to the kiosks. For example, on a September payday this year, there were 157 kiosk transactions and only 152 teller transactions. In 2002 on the same date, there were 39 kiosk transactions and 164 teller transactions, she said.

The reputation of fingerprint scanning-the most popular biometric application at credit unions-has been somewhat tainted by high failure-to-read rates. Biometrics fails to read 30% of member fingerprints at First Financial CU in West Covina, Calif., according to Carlton Musmann, chief operating officer.

But the tide may be turning. "The current biometric application has served our clients well over the past number of years, and has an accuracy rate of between 85% and 95%," asserted Scali at Real Time Kiosks.

That accuracy rate will climb to 99.9 % in January when Real Time introduces a 'forensic' biometric finger scanner, he predicted.

"The new scanner uses ultrasonic waves to read under the first layers of skin," registering a more accurate read for members with thin skin, work-worn fingers or cuts and scars, said Scali. The current scanner reads only the surface of the finger.

The new system also transmits the finger scan as a code, but uses a more sophisticated algorithm, he said.

Even with the old scanner at Birmingham PO CU, where many members' fingerprints are unusually worn from work, the scanner reads at 96 % accuracy, said Zuckerman.

CUJ Resources

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* Birmingham PO CU at

* Real Time Kiosks at

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