Tokyo, Japan
March 29, 2006
Biometric ATMs
in Japan: Fighting Fraud with Vein Pattern Authentication
Report Published by Celent
Japan’s banking industry is placing
its bets on biometrics as a solution to the growing problem of counterfeit
ATM cards and ID theft. First introduced in October 2004, biometric bank
cards have been announced by 15 financial institutions (two megabanks,
five regional banks, and eight credit unions) as of December 2005. More
than 50 other institutions have announced plans to introduce the cards
over the next several years.
Recent years have seen financial
institutions worldwide turn to biometric technology in order to deal with
the pressing issue of security, usually in the internal, corporate, and
high net worth sectors. The mass retail segment, however, has been slower
than other segments to embrace biometrics. Barriers to adoption have
included cost, a lack of application standards and interoperability, and
customer resistance to adoption of the new technology.
Against this background, the Japanese
banking industry’s implementation of a new biometric technology based on
vein patterns to authenticate ATM transactions is attracting attention.
The Japanese banking industry, which since late 2003 has come under
pressure to strengthen security in order to combat the growing problem of
counterfeit bank cards and ID theft, has turned to vein pattern
authentication technology as one solution. In October 2004, the Bank of
Tokyo-Mitsubishi UFJ began to offer ATM cards that authenticate the
customer by vein patterns in the palm of the hand. Other major banks in
Japan have followed by announcing
their own plans to adopt biometric bank cards utilizing either palm vein
authentication or a rival technology based on vein patterns in the finger.
"Japanese banks’ pioneering use of
vein pattern authentication technology in the mass retail banking sector
is a first," comments Junko Nose,
author of Celent’s new report, Biometric ATMs in Japan: Fighting
Fraud with Vein Pattern Authentication. "If these banks get
significant consumer adoption of the new technology, it will be a valuable
case study for banks around the world on how to successfully implement a
biometric strategy in retail banking."
The report assesses the prospects for vein pattern
authentication in the mass retail banking sector, which has historically
been resistant to biometric technology. The report examines the security
issues facing ATM systems at retail banks in recent years and presents an
in-depth overview of vein pattern authentication and other biometric
technologies offered by Japanese vendors. The report also features
exclusive case studies detailing the adoption of vein pattern
authentication technology at Japan’s four largest banks, The Bank of
Tokyo-Mitsubishi UFJ, Japan Post, Mizuho Bank, and
Sumitomo Mitsui Banking Corporation (SMBC).
The 59-page report contains 8 figures and
10 tables. A table of contents is available here.
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