Using biometrics to authenticate customers' identity is not new, but most consumers have long considered the technology intrusive and somewhat unnerving.
But with identity theft on the rise, many financial services companies say that consumers have become more accepting of biometric security systems in the branch.
Use of these (mostly optional) services, though still low, is gaining slowly. Technology Credit Union introduced fingerprint scanners at teller stations in June 2003, and about 4% to 5% of its 75,000 customers have registered their fingerprints.
Barbara Cure, the credit union's research and development manager, said that customers are now seeing the technology as an additional form of protection, rather than an invasion of privacy. For example, when one of the San Jose credit union's customers learned that his banking information had been stolen from his employer's payroll database, he was going to close the account.
But he changed his mind when he saw the branch's fingerprint scanners.
"He walked in and the first thing he saw was that we had biometrics," Ms. Cure said. "He was thrilled."
The customer registered his fingerprint immediately and instructed the credit union to allow transactions only when he was in the branch and could confirm his identity with biometrics.
"It gave him peace of mind that whoever stole that database was not going to get anything from him," Ms. Cure said.
Purdue Employees Federal Credit Union of West Lafayette, Ind., plans to install similar technology at its teller stations in January. It is a biometrics veteran and has been using fingerprint-authorized self-service kiosks in its branches since 1997.
Similar to automated teller machines, the kiosks can also handle several other functions, including accepting loan applications. Purdue has one kiosk at each of its six branches, as well as traditional ATMs that authenticate users with the standard card and PIN.
Gail Koehler, Purdue's senior vice president of technology, said fingerprint scanners eliminate the need for tellers to ask for picture ID.
Christine Barry, an analyst with Celent Communications LLC in Boston, said many bank executives and customers "have come to the conclusion that PINs are not as effective as they could be."
In most situations, she said, banks use biometrics with employees first.
Biometrics technology is improving, and former weaknesses have been overcome. In the past, for example, some scanners could be fooled by a criminal using a Gummy Bear candy with a fingerprint on it.
First Horizon National Corp. of Memphis began installing Diebold Inc.'s handprint scanners at its safe-deposit vaults in 2002. They are now in place at 17 of its about 145 branches with safe-deposit boxes.
Bank of America Corp. has been using similar scanners from Diebold since 1996 and has installed them at 9% of locations with safe-deposit boxes. The Charlotte company is now including them in new branches with the vaults.
Both companies put the scanners at the entrance to the safe-deposit vault. Customers can enter it without having to wait for an employee to verify their identity using a key or pass code. The palm reader automates entry only to the vault; individual safe-deposit boxes still require keys.
"It's much more convenient for the customers. They can go right in, assuming there's no one else within the vault," said Heather Andre, who manages financial-center services at First Horizon.
The palm scanners examine the unique geometry of the customer's hand. Bankers say the technology is so accurate that the scanners will not recognize a customer if a ring is taken off or put on.
Mary Beth O'Hara-Keller, a vice president at Bank of America, said customers were more receptive to palm scanners than fingerprint authentication. Because fingerprints are commonly used in police investigations, consumers are concerned that prints registered with a bank can somehow be misused, she said.
In an example of a legitimate inquiry, Ms. Cure said Technology Credit Union gave fingerprint information about a check-kiting suspect to local police. "It was very nice to tell the police department that we had registered him biometrically," she said.
Many other biometric technologies may soon be available to banks. International Business Machines Corp. has been touting a writing pad that, because it records pressure and speed, can authenticate a signature by how the person writes as well as by its appearance.
IBM has also developed a laptop computer with a built-in scanner. Users authenticate themselves with a fingerprint instead of a password, for applications stored on the machine and for Web sites.
Some vendors also offer iris and retina scans. Ms. Cure said others "can even do a biometric scent pattern of you" but said she does not want to know that much detail about her customers.
