A bank in Vietnam claims it has tripled its account base since it began offering cards with biometric fingerprint technology in June to the country's unbanked residents.
Mekong Development Bank says it has attracted people previously reluctant to open a bank account or who had no access to a bank by issuing what it claims is the first fingerprint-enabled debit card for use at the 33 NCR Corp. SelfServ ATMs across Vietnam.
The bank, serving the Mekong River region of Vietnam, says the fingerprint verification lowers fraud risks and provides convenience for both rural and urban populations in Vietnam. With a population of 86 million people, only 20% of Vietnam residents have a bank account, the bank stated in a press release.
The Mekong bank service illustrates how ATMs around the world have reached unbanked residents in mountain areas, rainforests or remote islands that receive power through generators or solar panels, says Mike van der Wal, managing director of NCR in Southeast Asia.
“The ATM’s ability to be placed almost anywhere has helped put a wide range of banking services within arm’s reach of much of the world’s population,” van der Wal said in an e-mail.
The biometric authentication aspect of the system drives financial inclusion further because of easier access and security, van der Wal says.
Biometrics addresses the issue that consumers new to banking and ATMs in many undeveloped and emerging economies have often shared ATM cards and PINs with friends and family members, without understanding the need for security that goes with self-service banking, van de Wal says.
NCR has incorporated biometrics in ATMs since 1998, though it was not cost-effective for widespread deployment at that time, van der Wal notes. NCR can deploy the biometric features of the Mekong bank ATMs in any SelfServ unit across the globe as the technology becomes more prominent, van der Wal says.
Temenos SA, a Geneva, Switzerland-based provider of banking software, implements its T24 biometric fingerprint technology to substitute for a PIN code in the bank's debit card system.
The bank obtains the customer's fingerprint when that customer opens an account. The bank utilizes the fingerprint-scan database when the customer places a finger on the reader "touchpoints" on the NCR units after inserting the debit card in the ATM, the bank said.
In addition to multiplying its account base, the fingerprint technology has led to a boost in deposit balances. Debit-card accounts with biometric protection have balances that are twice as large as a regular debit-card account, the bank noted.
Banks in some regions of the world offer services to allay fears of consumers who have "a much higher level of concern for fraud," Patricia A. Sahm, managing director at Auriemma Consulting Group, says.
"That concern could definitely drive an interest in biometrics [as a safe way to open a bank account]," she adds. Sahm says she is not familiar with the specific characteristics of the market in Vietnam.
While incorporating biometric technology on an ATM is not entirely new to the payments or banking industries, the practice of using fingerprints instead of PINs illustrates how ATMs are advancing worldwide, Sahm says.
"There is a lot more going on with creating smart ATMs, and I think we will see more biometrics, either voice verification or fingerprint matching, in the coming years," Sahm says.
Temenos delivered the technology in less than six months, triggering a response in which "an overwhelming 91% of customers surveyed after activating their debit card said they would recommend family and friends to sign up for the product," Nicholas Chee, deputy CEO and head of consumer business at the bank, said in the press release.
Biometrics has recently made other headlines in the payments industry.
Earlier this month, Natural Security SAS, a vendor in France, announced development of a biometric payment cardholder for consumers and a biometric reader for merchants.
In addition, Apple Inc.'s move last month to acquire a biometrics developer AuthenTec Inc. sparked speculation about whether the company intends to introduce a biometric function to protect payments made from its devices.
Still, industry experts stress that biometrics' usefulness depends on the application of the technology.