Major Japanese Bank Moves to Biometric Authentication at ATMs

Banks in Japan are stepping up efforts to enhance their security systems to protect deposits in the face of a steep increase in withdrawals by means of forged and stolen bank cards, banking industry officials said Tuesday.

The Bank of Tokyo-Mitsubishi installed biometrics-based automated teller machines at 267 outlets in mid-October so as to verify the identity of depositors by scanning their palm vein patterns.

The new ATM system uses bank cards that contain integrated-circuit chips to store data on cardholders' palm vein patterns which are scanned by a reading device developed by Fujitsu Ltd.

The Bank of Tokyo-Mitsubishi received ''thousands of inquiries'' about the ATM system in the first two weeks of its introduction, an executive said.

The major commercial bank plans to offer the technology to other banks, including UFJ Bank which will integrate operations with the Bank of Tokyo-Mitsubishi next year, to help them upgrade their security systems.

Suruga Bank, a regional lender based in Numazu, Shizuoka Prefecture, has adopted its own identification system based on palm vein patterns.

According to the Japanese Bankers Association, a total of 260 million yen was illegally withdrawn with forged cards in 86 cases in fiscal 2003, up sharply from the previous year's 12 million yen in four cases. Illegal withdrawals with such cards have continued to increase at a faster pace this year.

Some banks have lowered the limits on withdrawals from ATMs to minimize losses. Since October, for example, Sumitomo Mitsui Banking Corp. has allowed depositors to reduce the limit on total daily withdrawals from 3 million yen to any amount they choose, as a way of foiling illegal attempts to plunder large sums from their accounts.

Among hardware supplies for banks, Hitachi-Omron Terminal Solutions Corp. has developed an ATM system that verifies the identification of cardholders in a second by scanning the vein patterns of their fingers. The company has marketed the system to more than 10 banks and ''some are willing to introduce it,'' a company official said.