STRATEGIC PARTNERS
The ATM industry and big banks have finally seen spy movies and government technology colliding with the real world of everyday ATMs. by Ryan DuBosar, Contributing Editor
March 7, 2002
The ATM industry and big banks have finally seen spy movies and government technology colliding with the real world of everyday ATMs.
Iris-scanning ATMs have been deployed across America and the United Kingdom in the past several months, introducing the public to the future of identification technology.
An ATM's biometric computer reads a cardholder's face and finds the iris, usually at a distance of about three feet. The camera narrows in on the eye and takes a black-and-white digital picture. The system measures the structure of the iris, and how light and dark areas fall upon it, then generates a code that acts as the PIN.
Rob VanNaarden, vice president of sales and marketing for Sensar Inc., based in Moorestown, N.J., said the biometric technology is already taking foothold in the United Sates, and several financial organizations will announce their identities after they work out potential bugs.
Sensar has planned on deploying more than 500 systems around the world in the next year, he said. The systems were deployed in the UK and Europe first because of their markets' cash nature.
"The United States is a credit card society," VanNaarden said. "Everywhere else in the world is a cash society. The ability to get cash at any delivery point or do banking functions at a remote site is much more prevalent overseas."
So, European street corners can have 10 ATMs, each with a line of people waiting to conduct transactions.
The Birth of Biometrics
The concept of using the iris for biometry was developed in 1981, before the technology to implement the idea was available. Leonard Flom, MD, and Aran Safir, MD, two ophthalmologists, were discussing the possibility of using the distinct patterns of the iris for identification.
The iris has many factors that make it the ideal identifying organ, Dr. Flom said. It was internal, protected by the eye's cornea, but still visible. It changes very little after birth, and there are more measuring points that could differentiate two irises than other organs. The accuracy even surpasses fingerprinting.
Within a few years, technology caught up, and the two doctors approached investors with their idea. Dr. Safir knew another scientist, John Daugman, PhD, a computer scientist at Cambridge University. The two ophthalmologists took photographs of irises and Dr. Daugman used them to develop algorithms that would take patterns from a small swath of tissue and translate it into hexadecimal code.
Drs. Daugman and Safir developed a prototype instrument in three months with $13,000, Dr. Flom said. The 32 controlling patents were approved in 1987, and the doctors raised investment capital. Now, the technology uses a standard video camera to take a picture of the iris from a distance of about 36 inches.
Their firm, IriScan of Mt. Laurel, N.J., marketed the system to Sensar not only for ATMs, but for the Olympics in Nagano. The security-conscious Japanese government used the technology to secure the guns used in the biathlon.
The company also entered into a development agreement with NCR, of Dayton, Ohio, and with OKI Electric Industry Ltd. of Tokyo, in September 1995.
Other potential uses include electronic fund transfers, an idea being
developed by British Telecom. Mercedes is looking at a version for its
automobiles. The company is also pitching itself to the Israeli government for border security, and a prison in Lancaster County, Pa., has applied it.
Sensar is planning further applications for financial institutions, including new account openings and bank wire transfers.
But does it Pay for Itself?
Mr. Payroll Corp., an ATM and check-cashing kiosk manufacturer based in Fort Worth, Texas, uses facial identification, as does Siemens Nixdorf for bank safes in Germany.
When the Mr. Payroll Check Cashing Machine made its debut in convenience centers in June 1997, it expanded upon the staffed kiosks the company had operated since 1990. As the network grew the company introduced prototypes in banks and supermarkets. Now, the company has partnered with BankAmerica Corporation, Banc One Corporation, Wells Fargo Bank, Circle K Corporation and The Kroger Company.
Customers at Mr. Payroll ATMs enter their Social Security numbers and a video image of their faces is taken. The match is scored on a 10-point scale that allows customers to grow a beard, change hairstyle or gain and lose weight.
In May, Mr. Payroll provided one test machine to an independent ATM owner, which was deployed at Ft. Mead in Maryland. Gabriel Frem, president of Financial Consulting and Trading Inc. of Century City, Calif., is testing the viability of the machine.
"We don't know if it is going to be a profitable venture, given the costs of the equipment. It is more expensive than your average ATM because of the biometric features," he said.
The technology allows Mr. Payroll to charge lower fees on cashing checks, which then is passed along to FCTI, which can make a profit without hiking up the fee to the consumer.
"You have efficiency on one end, but you have to do more volume at lower fees to generate good returns on investment, and this is too premature to predict at this point," Mr. Frem said.
Related article: James Bond meets the ATM industry
>Sources:
• Rob VanNaarden, vice president of sales and marketing for Sensar Inc., can be reached at (609) 222-3123, fax (609) 222-9020, http://www.sensar.com.
• Leonard Flom, MD, can be reached at (203) 255-3421, http://www.iriscan.com.
• Mr. Payroll Corp. is based in Forth Worth, Texas, phone (800) 322-3750, fax (817) 335-7255, http://www.mrpayroll.com.
• Gabriel Frem is president of Financial Consulting and Trading Inc. of Century City, Calif., phone (310) 201-2535, fax (310) 201-2538, e-mail fcti@compuserve.com.
