Automatic teller machines (ATMs) are terminals which are installed by banks to facilitate cash withdrawal, fund transfer, balance check for customers. ATM allows the account holder to have transactions with their own accounts without the opportunity to access the entire bank’s database. The original ATM systems utilize PIN and cards to authenticate users when making the transactions. In fact, with the mushrooming of Automated Teller Machines (ATMs) in every road, economic frauds through them are getting more complicated day by day. This also increased the high risk level of ATM fraud in banking operations. According to the Huffington Post news in 2013, ATM fraud allowed thieves to steal $45 million in hours. Besides, the banking industry lost $943 million to debit card fraud in 2012, according to the ABA’s 2013 Deposit Account Fraud Survey.
The security for financial services like ATM banking becomes a great issue. Passing of information faces massive problems due to various types of attacks to the communication link. Many security algorithms are available to protect information from being hacked, among those technologies is the biometric authentication process which adds a new dimension of security for any person sensitive to authentication. In recent years, the importance of biometrics has grown tremendously with an increasing demand of security in accordance with unique identification of individuals. With the development of biometric solutions for ATMs, there is no need to remember PIN numbers; instead, your body like fingerprint or iris will become your PIN number to stringently reinforce the security of your transactions. With ATM supported by biometric solutions, banks having a presence across the country are leveraging this technology to enhance the services and fight frauds.
The application of biometrics for ATM banking is gaining majority. Based on the journal “Review Banking on Biometric in the World’s Banks and Introducing a Biometric Model for Iran’s Banking System” written by Hosseini and Mohammadi in 2012, it is indicated that among the world’s banks that use biometric technology, 52% are located in Asia. The second continent with the majority of banks is America that includes 32% of all. Besides, approximately 48% of the banks of the survey use fingerprint in different operations, and iris biometric accounted for 7.43% of market share. There were about 45% of the banks in the world use biometrics in ATM banking.
Biometric ATM has gained positive responses from banks and customers. CEO of Barclays Personal and Corporate Banking said: “Biometrics is the way to go in the future there’s no question about that we are committed to that type of platform.” With the excellent security capacity, Barclays Bank also announced that they will widen the use of biometrics to their million customers in the UK branch network. Not only is biometric ATM being widely used in developed countries but it has been reaching mainstream adoptions in other developing countries like Brazil, Kenya and Nigeria. Moreover, according to the U.K-based consultancy Retail Banking Research, emerging markets such as China and India have seen a spectacular growth in biometric ATM deployments in recent years. These two markets are predicted to have the most rapidly world-wide adoption in biometric ATM in the future.
Banking adoption of biometrics is contributing to a booming biometric industry with biometric vendors experiencing a tremendous growth on the back of the escalation of consumer-led adoption of biometric authentication. With the supports of biometrics on ATM banking, banks can provide customers a safer and user-friendly banking experience as well as reduce the frauds from ATM banking operations.