Biometrics – the future of banking technology?

Australians sure do love their technology.

Half of the population are already proud smartphone owners, over three million Australians own a tablet and in the past four years Australians have downloaded over a billion apps!

What’s more, Australians have been quick to embrace the benefits of online banking, with over half of Australian adults already banking online regularly.

Now, our relationship with banking and technology is set to deepen even further with some exciting new tech developments on the horizon.

Clever apps

All the major banks in Australia have developed nifty banking apps. For the most part, these enable basic functions such as balance enquiries and quick transfers but don’t quite replace the role of a brick-and-mortar bank branch.

The app race is getting competitive, though. Earlier this month ANZ revealed a new app called ANZ FastPay. In another technology first, this is the first Australian banking app to allow business customers to process same-day credit and debit card transactions through an iPhone or iPad.

In a cut-throat and highly competitive banking market, banks know customers want apps that will help them fit mobile banking into their busy lives and we’re likely to see other exciting innovations in the banking app space in coming years.

Going cash free with NFC

Another technological development that has Australians talking is the ever-looming Near Field Communication (NFC) boom.

NFC allows users to transfer data wirelessly over a short range. It sounds quite space age, but think of a work ID card that needs to be swiped to access a building, or a prepaid smart card used on public transport. These are all everyday examples of NFC in action. In banking terms, NFC would allow for fast and convenient cashless payments.

A number of high-end Android smartphones are NFC enabled, and many were surprised when the iPhone 5 didn’t include NFC capabilities. Smartphone adoption, already high in Australia as mentioned above, will have a huge impact on the roll out of NFC.

Banks still have some work to do convincing the public of the safety, security and benefits of transacting using NFC but it’s widely accepted that this is the future of cashless payments. ANZ and Westpac are already trialling NFC with Android devices on a small scale so watch this space! NFC could be nearer than you think.

The bank of the future

While the traditional role of the bank branch is changing, the ATM is set to become more prominent and multi-functional. While we mostly think of ATMs for withdrawing cash, there’s a lot of potential for them to help customers fulfil a wider variety of banking functions.

We can expect future ATMs to process cash deposits and instantly credit a customer’s account; improve self-service options and even enable video conferencing with banking advisors for more complex enquiries and transactions.

With it, we could have more effective 24/7 banking and a way for banks build trust in new technology with customers who still prefer to deal in cash.

Banking gets sci-fi

To me, it sounds like something straight out of a sci-fi film but biometrics, the use of biological data for verification and authentication, is already here. NAB introduced a voice biometrics system back in 2009 for its banking system and with the rise of NFC on the horizon, biometrics is set to be big news.

Retina-scanning and electronic fingerprints are considered a far more secure verification method than a PIN or signature but in a recent piece by ZDNet Dr Ted Dunstone, chairman of the Biometric Institute’s technical committee, argued that for a more secure banking system biometrics could work in conjunction with traditional security methods.

After all, it’s pretty hard to get your fingerprints wrong!

The future of banking in Australia – it’s technical

Following ANZ’s widely publicised $1.5 billion ‘Banking on Australia’ plan to invest in emerging technology to win the bitter banking wars, we can only expect other major banks to follow suit.

While the banks will push hard for a cashless, branchless future, ultimately it will be consumers who accept or reject the new tech-heavy banking systems.

Given Australia’s love affair with technology, I think it’s safe to say the future of banking in Australia will be highly technical!

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  1. Peter Ross says:

    I think you’ll find Apple considers themselves a bank and will be promoting ITunes/AppleID Account payments from their devices rather than adopting NFC. It’s possibly a very good idea.

  2. Concerns about security are being swept under the carpet. Banks don’t advertise how much money they “write off” due to card/electronic fraud. You’ve heard of “bank fees”? Well, they also cover those “debts”.

    With increasing deployment of RFID, it’ll become more prevalent for cards to be skimmed while they are still in the pockets/wallets/bags of passers-by and “clone cards” produced to enable shopping sprees at the cost of the unwary/banks’ customers. Such can be wide-spread, “thanks” to the Internet with clone cards produced in a car, parked outside of the shops. And it’s not just small transactions at risk. Some online shops require little more than the information broadcast by the RFID chip while in a “near field”. Much of the rest can be deduced.

    The “biometrics” in use for identification are usually quite poor. They are built to a price; not to maximise security. So the data points used to characterise a biometric are few. And in poor implementations, resident on a card that can be skimmed in a near field. That then permits the data points to be altered for the “clones”, to match the bearer of the forgery.

    The hand-written signature on the back of the card can’t be skimmed nearly as easily. The card has to be at least visible to the skimmer for e.g. digital imaging.

    RFID, card images and biometrics constitute “what you have” tokens for authentication.

    And the Personal Identification Number (PIN) is even more secure because it has to be observed/captured by a compromised device (e.g. hacked store terminal or modified ATM) as the PIN is entered. The PIN is, if kept secure as directed) the only element that constitutes a shared secret between the card holder and the card’s issuer.

    The PIN is a “what you know” token for authentication. (Same as a login password that’s never to be shared.)

    Security is maximised if “what you know” is combined with “what you have”. The latter can never really be considered sufficient by itself unless those accepting it as sufficient bear the burden of getting it wrong.

    The banks will pass on the costs to their customers so the customers bear the costs of the banks’ decision to make payment “easy” for themselves and customers.

    P.S. Such security practices aren’t restricted to financial institutions.

  3. Biometrics really bring good things for our advantge. I guess, this would also do great in banking. I happened to read an article where one financial institution converged with one company who is leader in biometricsfor payment purposes. I think this gonna be great for banking, too!