Anchor Desk

Web Sites Want Your Fingerprints (How it Could Save *You* Money)

Jesse Berst
March 6, 2000

Online fraud is the Net's dirty little secret. Sooner or later, we'll all be victims. That's why I want you to know about the scale of the fraud problem. About the biometric solutions. And about the implications for you and your business. Once the gee-whiz stuff of James Bond flicks, biometrics is the use of physical attributes -- your fingerprints, your voice, your iris -- to verify identity. What I'll explain here is why cost-conscious e-businesses are eyeing such expensive solutions as biometric technologies. And what it ultimately means to you.

THE FRAUD PROBLEM

As ecommerce grows, so grows the risk of online fraud. Consider: 

Travel site Expedia revealed last week it will take a $4 to $6 million charge to cover stolen credit cards used to book travel.

The Russian hacker believed responsible for raiding CD Universe's credit card database in January is linked to an underground theft ring that's increasingly savvy.

Online auction complaints are skyrocketing, prompting a Federal Trade Commission probe.

To succeed on the break-neck Internet, companies hurry to get sites up and running -- and often skimp on security.

BIOMETRIC SOLUTIONS

Biometric technology isn't an obvious solution for every e-business. It's expensive. For that reason, few use it today. But that's changing:

ING Canada next month rolls out a program to identify its online banking customers by their fingerprint on a computer mouse

DrugEmporium.com is testing an app that allows physicians to order prescriptions over the Internet with biometric ID. It may add biometric authentication for all shoppers later this year

Charles Schwab is testing voice recognition to authentic users of its phone banking option. It has not ruled out biometric technology for its trading site

It's easy to see why fraud has e-businesses looking at biometrics. But will customers willingly participate?

WHAT THIS MEANS FOR YOU

Privacy ranks top-of-mind in every Internet poll. Samir Nanavati of International Biometric Group notes it is hard to convince consumers to supply something as personal as a fingerprint. "If you have trust issues with a business, you can change your password or make up a name," he says. "You can't change your fingerprint."

My bet: over time, consumers will accept biometrics, just as they accept entering credit card numbers online. And as fraud escalates -- and e-businesses raise prices to make up for their losses -- there will be an economic incentive to do so.
What's more, "Biometrics is…in a way much better than passwords, which are easily forgotten of stolen," reminds security consultant Bob Geiger of Info-Defense.com.

We all have unique physical traits. If you've watched enough cop shows, you know fingerprints in particular are unique and often used for identification purposes. But your iris -- the round, pigmented membrane that surrounds the pupil of your eye -- is also unique. So is your voice.

Biometric technology uses those parts of the body with measurable uniqueness to authenticate identity. For instance, it can digitally encode those unique physical attributes of the hand or eye and associate the ID with biological attributes stored in a file. Such an application might be used to allow security clearance into a building.

The science of biometrics has been around for decades. The public sector was the early adopter, particularly the military and law enforcement. A number of factors have held back widespread adoption -- steep prices and lack of standards among them. Plus, some of the early tools didn't work as well as hoped.

But that's changing. According to the International Biometric Group of New York, the biometric technology market in the U.S. (not including law enforcement) is only about $67 million today. But sales are expected to jump to $670 million by 2004 as computer makers add finger scan capabilities to keyboards and mice.

The Biometric Consortium is a good place to research biometrics in depth.