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July 14, 2011
Where will biometric ID technologies fit in fight against fraud?
Biometric systems are designed to recognize individuals based on their unique biological and behavioral traits. Traits such as hand geometry; fingerprints; voice and vein recognition; and retina, iris, and facial scans are all personal characteristics that can authenticate someone's identity. Using biometrics to combat fraud is not novel. In addition, a California-based company introduced in 2008 a risk management solution that identifies fraudsters through the use of voice printing, which allows the company to compare a caller's voice against a database of known criminals before the company authorizes a credit card payment.
In a previous post, we discussed the concept of using biometric technology to combat ATM fraud. Since then, we learned of ATMs abroad that are equipped with voice-based biometric technology that determine user honesty and help prevent consumer credit fraud. In this post, we revisit the issue of biometrics, touching briefly on new developments in the payments industry as well as on issues reported on by companies and researchers.
Biometrics gain trust
Summarizing a poll it took of credit card users, Unisys reported in 2010 that consumers are becoming comfortable with the use of biometrics. In fact, according to the report, about two-thirds of the respondents indicated a preference for fingerprint biometrics over the use of photo verification, PINs, and signatures. A 2009 Gallup survey revealed that 58 percent of survey respondents would use biometrics to verify their identities, and a staggering 93 percent preferred fingerprints as their biometric of choice.
Searching for a secure biometric storage process
The life of biometric data on portable devices such as cards can exist anywhere from six to 12 years. Technology such as Precise Biometrics' Match-on-Card allows cards to be activated with a fingerprint or iris scan instead of a PIN. All biometric information is stored on the card, so the matching of the biometric data takes place on the card.
This type of technology sends a biometric template to the card processor, which is matched to a reference biometric template stored on the card itself. The card protects personal identity information as it is transmitted across a contactless interface using radio frequency technology. Other companies have introduced similar products retaining all the biometric data on the portable device, which can lessen user anxiety since their biometric data is stored in a device the users control. However, user control over biometric data does not necessarily lessen the potential risk for lost, stolen, or damaged credentials.
Recommended considerations for biometric recognition technologies
According to a report by the National Research Council, "no single trait has been identified as stable and distinctive across all groups," so we cannot rely solely on voice printing, for example, or on fingerprints to guarantee security. The report also points out that biometric systems contain numerous "sources of uncertainty" that "need to be considered in system design and operation." For example, biometric characteristics often vary over an individual's lifetime due to a number of factors, including age or disease, and the systems may not capture or account for this variability. Other, more technical, issues may also create variability in these systems, including sensor calibration and data degradation. Even security breaches themselves add variability. As another "source of uncertainty," the report points to the fact that biometric systems may not be "designed and evaluated relative to their specific intended purposes," so they fail to account for factors such as the competence of the systems' users.
A final note
While there is no such thing as an impregnable security system, using multiple forms of credentials and identification components can strengthen most security systems. If biometrics is one of those layers, careful consideration should be given to measuring the merits and risks relative to other authentication technologies, such as PINs and signatures, as well as ensuring that the biometric that is selected functions as intended. Like any other authentication form factor, any biometric identification technology used should undergo a thorough threat assessment to determine its vulnerabilities and its potential for mitigating attacks. Biometrics may or may not become the panacea to authentication, but ensuring that users trust the entire biometric system is integral to its successful implementation and adoption in the fight against payments fraud.
By Ana Cavazos-Wright, senior payments risk analyst in the Retail Payments Risk Forum at the Atlanta Fed
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- account takeovers
- ATM fraud
- bank supervision
- banks and banking
- card networks
- check fraud
- consumer fraud
- consumer protection
- cross-border wires
- data security
- debit cards
- emerging payments
- financial services
- identity theft
- law enforcement
- mobile banking
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- mobile network operator (MNO)
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