Bankers Use Biometrics to Secure Identity of Employees

Fingerprint ID system from LendingTools certifies authenticity of employee moving money between banks


Identity theft is an even bigger worry for bankers than it is for the average person.

So LendingTools.com, Inc., an Internet firm based in Old Town Wichita, is offering a new service to help bankers sleep better at night: fingerprint identification for bank employees who move money to other banks.

LendingTools.com joined with another high-tech firm to develop what it considers a higher level of security for its customers.

It's one of the products that has led LendingTools.com's sales figures to grow more than 100 percent a year since it was founded five years ago. Three young guys from Moundridge, Eric and Theron Goering and Mike Isaacs, started the company as an outgrowth of their work at Citizens State Bank, owned by the Goerings' father.

The three still run the company, but now they oversee 13 employees and are looking for at least three more. The office has the exposed brick and open layout of a company that values creativity.

They discovered a profitable niche only bankers could see: automating the burdensome communications between banks.

Small and mid-sized banks rely on paper and fax machines when communicating with corresponding banks.

Corresponding banks don't deal with the public. Instead they act as bankers to the banks. They help clear checks, make loans to banks, buy or sell cash to those banks, do data processing and consult. Millions of dollars a day flow among LendingTools.com's 10 corresponding-bank customers and their 1,300 member banks.

The only corresponding bank in Kansas that uses LendingTools.com's service is First National Bank of Hutchinson.

LendingTools.com operates a Web site where both parties connect to make financial transactions. Its customers pay for the service.

But banks and government regulators are growing ever more security conscious, said Eric Goering, president of LendingTools.com. That's why they developed the new fingerprint ID system.

Typically, bank employees who are authorized to move money have a user name and password. That's generally pretty secure, but some possibilities for abuse do exist. Suppose an authorized employee goes on vacation and writes down the password for a co-worker? Goering asks.

"Bankers get paranoid about it because a lot of money can be moved around very quickly," Goering said. "The transactions leave a trace, but within 15 minutes that money can be gone."

With the fingerprint reader, only the authorized employee is able to move the money.

LendingTools.com offers several services, none of which the general public can use, but which impact them nevertheless.

The most recent of these services helps banks reduce the time needed for check clearing from several days to one day, by enabling the digitized images of checks to be transmitted electronically. Right now, checks must be hauled by truck from banks to a corresponding bank.

LendingTools.com recently signed a contract to provide this service to First Data Corp., one of the largest processors of financial transfers in the country.

They are also marketing a service that connects banks with their corporate customers through their Web site. That would allow, for instance, a company to deposit paychecks directly into individual bank accounts.

With these products, the three expect the company to continue its skyrocketing growth -- it projects more than 100 percent sales growth again this year.

They like Kansas and plan to stay. In fact, some employees wanted to remain in Moundridge, but Eric Goering said it just wasn't practical. Wichita is a nice compromise between Moundridge and a big city like Denver or Dallas.

Their only problem so far: attracting enough technical talent. Wichita doesn't have a large pool of high-tech talent and it's hard to lure them here.