Can palm scans replace ATM cards?

By Jennifer Waters, MarketWatch

CHICAGO (MarketWatch) – The next time someone asks to check your identification, they may mean a palm scan not a passport. Biometrics authentication, a measure once reserved for criminals, is making its way into the mainstream, as banks and credit-card issuers embrace a technology considered far superior to personal identification numbers and passwords.

“Biometrics has a real opportunity to take off,” says Alphonse Pascual, a security, risk and fraud analyst for Javelin Strategy & Research. “When they are done well, they are a great solution (to secure identification). Unfortunately, there are still limitations to it.”

Among the drawbacks are the accuracy and privacy issues posed by the technology, which could take years to resolve before laws are put in place. Biometric scanners use your personal characteristics or traits to identify you. Fingerprint and palm scans are already widely used in countries like Japan and Poland, while other systems rely on your voice and the cadence of your speech to confirm your identity.

Up until the terrorist attacks of Sept. 11, 2001, biometrics technology languished as a security measure, despite high accuracy rates. Some companies and some government arms — the FBI and police, for example — used fingerprints and even iris scans as identification sources, but not to the degree portrayed in many movies and books.

Today, however, a growing number of financial institutions, businesses and medical facilities are investigating — and investing in — biometric identifiers. Disney World, for example, has been using biometrics for the better part of a decade. At its entrances, guests must have their fingers scanned so Disney knows that the same person is using the same ticket every day.

The government is pushing even further ahead with the technology, integrating biometrics at the FBI, Homeland Security and the Defense Department. The FBI, which calls itself the “global leader in biometrics,” is completing a $1 billion state-of-the-art system known as Next Generation Identification, which will significantly broaden and improve the largest person-centric biometric database in the world.

And consumers are, albeit slowly, getting comfortable with it. A report Javelin released this week about banking authentication efforts claimed that “business customers crave biometrics.”

That’s mostly banking customers, seven in 10 of whom told Javelin researchers that they were interested in using biometrics, with 35% opting to use their fingerprints.

Some 44% of all consumers are drawn to financial institutions that consider taking such robust measures to ensure people are who they say they are. The more technology-driven a person is, the more likely he or she is to use banks and card issuers that embrace biometrics, the research found: 48% of online banking customers favored such measures, while 54% of users of mobile banking do, according to Javelin.