Facial Recognition Not Ready for Prime-Time in Online Banking

For authenticating online banking users, facial recognition is no better than 10 to 15 years away, says Patrick Audley, CTO of identity vendor Cogneto. The low resolution of cheap Web cams means "we're talking a false acceptance rate of maybe 10 to 15 percent, which is very high on a biometric," says Audley.

What makes his point unusual is that Audley is spelling out the drastic shortcomings of a technology his company is rolling out to bank clients in January. Cogneto is launching what it calls the first facial recognition system in the market for online banking, in which authentication procedures will include use of a fuzzy, MySpace-worthy image.

What makes Cogneto's biometric solution viable, though, is that facial recognition is only a component of the umbrella behavioral risk-profiling software Cogneto sells. Banks using UNOMI, Cogneto's two-way authentication, platform have the option of letting customer enroll a binary interpretation of their face -shot with a Web cam they already own-to serve only as a partial factor, not an arbiter, of identity. The biometric is licensed from Cognetic Systems.

After years of optimistic projections that fingerprint scanners, voice pattern recognition and iris readers could be the security centerpiece for primary or multi-factor authentication, the Cogneto model could be the one that biometrics settles into. With banks under the FFIEC's thumb last year to add a secondary authentication piece, Gartner VP Avivah Litan says none put their faith and budgets into biometric solutions. "Biometrics is going too far for what consumer banks need to do," says Litan. "[Current] fraud losses do not justify investments at the order of $5 to $10 per user, per year."

Biometric tools launched over the past year include several whose home-based authentication procedures were cogs in resident verification technology or tied to added solutions, like internal security use, to make them financially palatable.

Pay By Touch, whose fingerprint technology has mostly made inroads with merchant point-of-sale, is in talks with six banks for its new True Me fingerprint identification platform for retail and business customer authentication. But PBT plans these as just the first phase of a multiple-app environment that can include True Me in payments and rewards program participation. "The initial release is strictly the authentication offering," says Siegal. "Then later in 2007 you'll see us layer in some of these other service offerings as part of the package."

Litan, who is bearish on biometrics' prospects despite favorable consumer interest, says that many solutions are just "technology for technology's sake...biometrics just for authentication is not sold. It always has to come with a value-add," such as the applicability of voice pattern recognition for online banking with call center deployment, which some analysts have said could be the next stage of FFIEC requirements.

Biometrics may also be the value-add itself, as Audley describes Cogneto's facial recognition piece. Even if the technology only provides a 20 percent reliability on identity, the tool is doing its job as an extra factor in the overall behavioral risk model. "We're presenting it to banks as being able to use tomorrow's technology today, without all the headaches it has right now."

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