Palm Scanning Vein Recognition Biometric ATM Machines
02/05 - JAPAN TIMES - The growing number of bank account thefts involving stolen or forged bank cards is forcing financial institutions to adopt costly biometric technology to verify that only bona fide customers are using automated teller machines.
The Financial Services Agency has proposed the standardization of biometric identification systems to confirm account holders' identities when they use automated teller machines.
But bank groups are adopting differing technology to protect their accounts, posing a problem of incompatibility on an
industry wide basis, despite the overall effectiveness of each system, experts and industry insiders say.
ATM biometric systems can, for example, scan a particular physical trait, such as a palm's vein pattern, to allow access to an account.
The envisioned authentication method used by major banks and Japan Post in their fight against the proliferation of counterfeit bank cards are currently split into two types: one using the veins in the finger and the other using the veins in the palm of the hand to identify individual account holders.
In October, Bank of Tokyo-Mitsubishi installed vein-pattern-recognition systems in some of its ATMs.
Sumitomo Mitsui Banking Corp. plans to introduce a biometrics-based system by March 2006. Mizuho Bank has also shown interest.
"What prompted us to launch this system is the overwhelmingly strong security it provides to our customers," BTM spokesman Hiroshi Hashimoto said.
BTM's system identifies customers at ATMs by scanning their palms. Users' vein patterns are stored in their integrated circuit-embedded bank cards.
BTM's biometric-identification service, which also insures deposits of up to 100 million yen against card-related crimes, costs 10,500 yen per year. The bank will introduce a free card in April, with insurance protection for up to 5 million yen.
The bank chose palm vein patterns over fingerprints for hygienic reasons -- with palms, customers do not need to touch anything. In addition, many people surveyed by the bank said using fingerprints would make them feel like criminals, Hashimoto said.
Smaller banks are also going with biometrics. Suruga Bank, based in Shizuoka Prefecture, launched a palm-scanning system in July, ahead of BTM. Customers can get their biometrics card for free.
The National Association of Shinkin Banks plans to set up a palm-recognition ATM network in September for its 280 savings-and-loan banks.
The banks and manufacturers would not discuss the costs of their biometric systems. But one bank source said, considering the benefits for customers, investing in such a system will pay in the long run.
The growing use of biometric technology underscores the fact that copying conventional magnetic cards is extremely easy, said Naohisa Komatsu, a biometric expert and professor at Waseda University's school of science and engineering.
In many cases, thieves retrieve personal information from the magnetic strip on the back of bank cards with a compact device.
In the six months to September, there were 122 card forgeries, resulting in 461 million yen in damages, according to the Japanese Bankers Association. The figures exceed those for the entire year that ended last March 31, when 272 million yen was reported stolen.
Making it easier for thieves, many people use personal identification numbers that are easy to guess, including birth dates or home telephone numbers, Komatsu said.
"Over the years, financial institutions have warned customers repeatedly about the risks of using personal identification numbers that can be easily guessed," said Akio Okabayashi, general manager in the business promotion division of the National Association of Shinkin Banks.
But he said the warnings have rarely persuaded people -- especially seniors -- to change their numbers.
"At the moment, the best way is to introduce an identification system using the customers' (physical) characteristics," Okabayashi said.
Protecting biometric information from leaks is crucial. The Financial Services Agency in January asked banks to keep the data separate from other personal information, including addresses and telephone numbers.
One big problem with this new type of security is the incompatibility of differing biometric systems, Waseda's Komatsu said.
If more banks employ palm-scanning, convenience store ATMs -- linked to many banks -- will also need to introduce the system, Komatsu said.
In addition, different biometric systems are expected to debut that scan a person's iris or finger vein patterns.
"It seems impossible at the moment to link the existing ATMs to all systems," said Nobuyuki Miyaji, a spokesman for IY Bank Co., which operates 9,805 ATMs, primarily at Seven-Eleven convenience stores nationwide.
IY Bank, a subsidiary of retailer Ito-Yokado Co., depends on ATM commissions from its partner banks for its revenue.
Like at convenience stores, most ATMs operated by banks are connected with other banks so customers can withdraw money at more locations.
The incompatibility between biometric systems may cause ATM networks to become less convenient.
I-On Asia is a Hong Kong based company dealing with hand vascular pattern recognition security product and services in Hong Kong and Macau.
The VP-II Hand Vascular Pattern Recognition System, developed by South Korea’s Techsphere
originated from a conventional vein pattern recognition system. The system verifies or recognizes users by utilizing a state-of-the art recognition algorithm based on hand vascular patterns extracted by an infrared optical sensor system. Unlike other biometrics systems which can be “hacked”, the VP-II M leaves no human residue, such as a fingerprint which may be used to overcome the system.
A number of companies have recognized the benefits of vein-pattern recognition. The Bank of Tokyo-Mitsubishi, Japan’s third largest bank has installed VP-II M as the security system in its offices. Similarly Suruga Bank has installed the system in more than 60 branches as a means to identify customers at its teller windows.
The high security access control system is able to offer application settings from server, application and workstation security to time and attendance and fraud prevention.
Ongoing costs associated with card and key replacement, or password maintenance are reduced considerably.