Biometric Technologies: Are We There Yet?

January 11, 2006


San Francisco, CA, USA January 11, 2006


Despite the great promise of biometrics, US banks may be more than a decade away from realizing its full benefits.

Biometric technologies are expanding their footprint in the banking industry. Banks across the globe are using biometrics to curb fraud and offer customers an easy, convenient alternative to cards and PINs. But US banks are behind the pack.

"It will be years, if not a decade or more, before the US will be in the position to offer consumers the ability to make a payment with a finger, iris, or other biometric method on an open payments network," says Ariana-Michele Moore, senior analyst at Celent and author of the report, ?

In this report, Celent explores the use of biometrics in financial services, focusing on its application for banks and their readiness to use the technology. Celent found that while technological advancement and price improvements are among the factors positioning biometrics as a useful tool for banks, US banks face challenges -- from creating standard biometric applications to encouraging customers to use biometrics— that will stall widespread use of the technology in the US.

"Despite the challenges facing those banks interested in deploying biometrics across their customer base, many banks are using them internally across applications such as employee background checks, time and attendance, and access security," says Moore. "The opportunity for biometrics is fantastically huge, and its applications are as wide as the mind can stretch," she adds. Many different technologies have already been tested in the market, some as bizarre as body odor. A few have emerged from the pack as true leaders, such as fingerprint and iris recognition. Celent traces the evolution of these technologies, compares the existing technologies, and predicts the future development of biometrics.

Celent also predicts that deployments in the private sector will grow and will largely pave the road for biometric use across the retail banking industry. Biometrics in cell phones, laptops, storage lockers, and many other types of applications will increasingly acquaint consumers with the technology and increase their level of comfort.

The report includes case studies of two biometric merchants, Biopay and Pay by Touch. This report is an update to the Celent report, Financial Fraud: Biometrics Point a Finger, March 2002.

A table of contents for this 52-page report is available online.


Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
Tel: +1 212 345 1366

Europe (London)
Chris Williams
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
Tel.: +81 3 3500 3023

Table of Contents

San Francisco, CA, USA January 11, 2006


Executive Summary 4
Overview 6
  The Drive Toward Biometrics 7
  Historical Problems 8
  Why Biometrics Will Prevail 10
  Biometrics Around the World 11
Biometrics in Financial Services 13
  The Drivers 13
  The Hurdles 14
  Industry Deployment 15
Biometric and Payments 17
  Payments Case Study: BIOPAY 17
  Payments Case Study: Pay By Touch 19
  Projected Timeline 21
The Technologies 22
  Fundamental Definition 22
  The Many Possibilities 22
  Review of the Basics 24
  Fingerprints 27
  Face Recognition 32
  Iris Scan 34
  Voice Recognition 36
  Hand Geometry 37
  Vein Recognition 39
  Technology Synopsis 41
  Multimodal Biometrics 42
Product Considerations 43
  Operational Considerations 43
  Security Considerations 44
  User Adoption Considerations 45
  Cost Considerations 46
Conclusion 48
Objectivity and Methodology 51

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