The future of banking: biometrics take over cash, payments in fluid economy, personal digital agents


This morning ANZ announced its Banking on Australia program, in which it will spend $1.5 billion over the next five years to reshape its business and invest in digital technology, with the immediate launch of a range of digital initiatives.

At the media event announcing the program at ANZ’s headquarters this morning I spoke about the future of banking, and ANZ Australia CEO Phil Chronican shared ANZ’s initiatives.

I will try to write more later about what I covered in my presentation. For now here are some excerpts from ANZ’s press release on some of the very interesting statistics from a survey performed by ANZ for the launch, together with some of my comments.

Seventy-nine per cent of Australians said they would be comfortable with fingerprint technology one day replacing their banking PIN and more than one third of Australians would prefer to live in a cashless world according to a new survey released today.1

The Newspoll survey commissioned by ANZ also found Baby Boomers are giving younger generations a run for their money, with nearly three quarters of those aged 50-64 more likely to use digital technology over a bank branch for day-to-day banking transactions.

Australians have adopted digital habits for most of their banking needs and will increasingly look to technology to make their financial lives easier in the future, with the survey finding:

• Not surprisingly 88 per cent of people aged 18 – 34 prefer to use digital technology over a bank branch for day-to-day transactions but their Mums and Dads weren’t far behind at 75 per cent;
• 38 per cent of Australians would prefer to live in a world where they didn’t need to carry cash;
• 40 per cent of people even accepted the idea of one day outsourcing their finances to a digital personal assistant – an intelligent computer program which makes financial decisions and moves money between accounts on your behalf;
• 49 per cent of 18 -34 year olds like the idea of a digital personal assistant but with only 30 per cent of Baby Boomers indicating they would be likely to use the technology;
• 67 per cent of Australians would be comfortable using a machine that scans your eye to verify identification in place of a pin; and
• 73 per cent of people find it inconvenient when small businesses don’t accept cards and only cash, with 82 per cent of 18-34 year olds finding cash only policies the most frustrating.

The comprehensive survey reveals that while we are embracing many aspects of new technology, Australians still want face-to-face interaction for life’s “big ticket” items. More than twice as many Australians said they would prefer to apply for a loan (62 per cent) or get mortgage advice (64 per cent) in a bank branch than by using digital technology.

Futurist Ross Dawson said the survey shows Australians are willing to lead the way in the uptake of this kind of technology but it will be up to the banks to respond.

“Cash could be on the way out and it’s realistic to imagine a world in which we carry no notes or coins, or even credit or debit cards,” Mr Dawson said.

“Before long we may use our fingerprints or even retina scans to make payments. Australians have shown they are comfortable with biometric identification, because it combines convenience with security.

“As banks make it easier to make and receive payments through devices such as smart phones, a new wave of entrepreneurs and jobs will be enabled. Pop-up stores will tap fleeting fashion trends and revitalise main streets, personal services will be available wherever is most convenient to consumers, and great ideas will garner contributions.

“We have already learned to tell our smart phones what we want with technologies like Apple’s Siri, so it may not be that long before we are relying on a personal digital assistant like Siri to help us with banking transactions such as moving funds or making payments, and even potentially choosing investments on our behalf,” Mr Dawson said.

For more details here is the full press release and here is more information on ANZ’s announcements.

  • One of the subtle things about biometrics is that they don’t simply ‘combine convenience with security’. Rather, they pitch convenience directly against security. You cannot improve convenience in these systems without sacrificing security.

    It’s easy to see why. Because of the vagaries of human traits and the way they vary from day to day, biometrics have to cope with the same person appearing a little different each time they front up. The systems also need to allow for different positioning of the hand (in the case of palm scanning), lighting (face recognition), background noise (voice) and so on, as well as the fact that the sensors get grimy and worn over time. So biometric recognition systems cut you some slack; the more slack, the easier they are to use. Inevitably this means that a biometric system will occasionally confuse one person with another; that is, it will commit a False Positive. So you can see the inherent trade-off in all biometrics, between their ability to discriminate between different people (necessary for security) and their ability to properly recognise all users (convenience).

    You can’t have it both ways; a system that is very secure and discriminating will be more inclined to reject a legitimate user, and conversely, a system that never fails to recognise you will also be more likely to confuse you with someone else.

    And when we imagine biometrics replacing cash one day, we need to be precise about what we have in mind. Is it thought that you could pay for your groceries by fingerprint, with no other form of ID, and in particular, no card? Well they’re trying this sort of cardless system in Japan with palm scanning ATMs, but it’s easier said than done. As we’ve seen, it is simply inevitable that a biometric ATM will make false positives. And when there is no card, the biometric matching is done against a database of all enrolled customers, hundreds of thousands of them, and the probability of a false positive rises exponentially. Think about it: a false match means the ATM will give you access to someone else’s money – surely the worst case scenario. So in Japan, the ATMs require your Date of Birth and PIN! This despite the hype that biometrics are “unique”! And it will be the same with biometric cash. In fact it will be worse because engineering tradeoffs in cost-effective point of sale equipment (or god help us, phones and tablets being pressed into service as virtual cash registers) means the security/convenience tradeoff is probably unsolvable.

    Sadly, the people answering the user acceptance surveys would have got most of their understanding of biometrics from science fiction movies. This tech just doesn’t work like people think it does. With biometrics it is more true than in any other technology: The Devil Is In The Details.

    Stephen Wilson, Lockstep Consulting.

  • “Biometrics” and “Biometry” have been used since early in the Twentieth century to consult the area of development of statistical and statistical methods appropriate to data research problems in the scientific sciences. Recently, these terms have also been used to consult the growing area of technology dedicated to computerized recognition of individuals using scientific attributes, such as those based on retinal or eye checking, speech styles, powerful signatures, finger styles, face recognition, or hand dimensions, especially for verification requirements.