A new TowerGroup report entitled, "Biometrics: Security for the New Millennium?" finds that high implementation costs and lack of industry consensus could potentially delay the widespread use of biometrics technology in financial institutions for at least a decade. The findings, from TowerGroup's Retail Brokerage and Investing Service, show that privacy concerns are not what is slowing the adoption as previously suggested. Ultimately, convenience will be the driving factor in the acceptance of biometric technology in financial services.
The research describes biometrics as "technologies that analyze the unique biological traits to differentiate one human being from another, such as fingerprints, the retina or iris of the eye, or the patterns of a voice." In order for this type of biometric authentication to be used, TowerGroup says the technology must be quick and reliable, able to stand heavy use, accurate and cost-effective. The research points out that while certain technologies work better in certain environments, each financial-services delivery channel has a possible application for biometrics. Potential beneifts for the financial-services industry could include reducing costs related to identity theft by validating client's identities through physical or behavioral characteristics.
Eventually, either private-sector consensus or government mandate will be important for developing interoperable biometric-authentication systems. In light of the events of Sept. 11, TowerGroup suggests that it is more likely the government will play a key role in any broad roll-out of biometrics technology.