Banks poised to adopt biometrics as voice verification now ready for major commercial deployment

The use of voice verification to authenticate customers calling into a contact centre finally looks set for wider commercial adoption. The financial sector particularly looks to be one of the first to start using the technology following this year’s release of the new International Standards Organisation (ISO) framework standard outlining the security framework for using biometrics for authentication during financial services transactions,

Some might say it’s about time we started using biometric technology, particularly as there are growing concerns about identity fraud. Ofcom estimates that consumer concerns about identity fraud has risen by 15 per cent over the last two years, however the research also shows that individuals are increasingly mature about their interactions, and are making more informed decisions about venues such as websites before entering their personal details.

For the financial services sector particularly, the risk of fraud and identity theft is an ongoing concern. Recently a number of major financial services contact centres have been targeted by sophisticated criminal gangs who prey on individual agents to obtain security information such as passwords and PIN numbers. This intelligence would enable the gangs to secure sensitive customer data for illegal purposes such as purchasing goods or conducting financial transactions. In Glasgow alone, Strathclyde Police estimated that ten per cent of contact centres had been targeted by criminal gangs who were using a range of different methods to gain access to customer details.

Dealing with the challenge of identity fraud

The increasing use of social networking sites such as Facebook and MySpace have also provided rich pickings for imposters looking to access personal details to defraud customer accounts. Other techniques include e-mail and telephone ‘phishing’ attacks which are designed to trick customers into giving personal details by impersonating banks and utilities.

According to a recent report published by Experian, ‘The financial services industry is failing to take the proper precautions when it comes to combating identity fraud’. The research also revealed that ‘70 per cent of financial services companies still rely on fraud-friendly paper based documents in order to authorise a person’s identity’.

The big security issue for call centres is the problem associated with authenticating the identity of the caller speaking over the phone. With no access to ID such as passports or drivers’ licenses, call centre agents typically identify and verify callers by asking the caller five or more questions such as postcode, date of birth and mother’s maiden name. This process can take up to two minutes per call and provides a frustrating experience for genuine customers. So the question is, how is it possible to maintain or enhance security while improving the usability of the customer authentication process?

For some time now, voice verification technology has been seen as the solution to this problem. Voice verification authenticates callers by comparing their voice with a pre-registered ‘voiceprint’. Voiceprints, like fingerprints, are unique to us all. A voiceprint is a digital representation of some of the unique characteristics of a caller’s voice, including physiological characteristics of the nasal passages and vocal chords, as well as the frequency, cadence and duration of the vocal pattern.

Making it easier for the caller

Voice verification typically uses multiple factors to identify and verify callers, usually requiring a key piece of personal information - such as your mother’s maiden name or your postcode - and something that relates only to you – your voiceprint. Voice verification makes authentication much easier for callers by avoiding the need to ask lots of personal questions. The technology further improves security by keeping confidential personal details away from human agents, removing the threat of criminal coercion for agents. Furthermore, voice verification removes the password reset problem – you physically can’t forget your voiceprint - which can account for up to 20 per cent of the calls in some financial services call centres.

Why haven’t we adopted the technology before?

There are two key factors that have, so far, prevented the mass adoption of voice verification technology. The first challenge is the time and effort involved in enrolling a customer base. Customers need to go through a registration process to enrol their voiceprint against their account, and this typically involves the caller repeating a pre-defined phrase to an automated enrolment application. Alternatively, there are a number of innovative techniques that enable the automation of the enrolment process, specifically when used in conjunction with secure web portals and other pro-active contact technologies. The advantages of this approach are that significant sections of a customer base can be enrolled in a short space of time, allowing the benefits to be realised sooner than if customers are left to make first contact.

Getting customer ‘buy-in’ is also essential and can take time, however with identity fraud increasingly making headline news, those organisations taking action to improve security are now being viewed much more positively by customers. We’ve found that consumer acceptance is also significantly increased when customer service staff are given the time to really explain the benefits of the technology, specifically the enhanced security and ease of authentication once enrolled.

We’re now seeing clear signs, however, that consumers around the world are seeing the benefits of voice verification when it comes to protecting their important personal information. According to a new study conducted in the US for Nuance Communications by Harris Interactive, nearly 40 per cent of those surveyed confirmed that they would rather do business with a company that offers voice verification on their accounts. Those questioned were comfortable with voice verification as a secure approach, and cited combating identity theft and enabling them not to have to remember a password as reasons for using voice verification.

Analyst firm Frost & Sullivan certainly sees the demand for biometric technology from financial markets increasing significantly, and is targeting a near tenfold rise in biometric deployment between 2006 and 2013 with firms primarily using the technology to enhance security and convenience. Frost & Sullivan previously believed that biometrics wasn’t ready for a major roll-out, but they now feel that financial services firms are seeing the technology as a powerful solution in the fight against identity theft and fraud.

Ready for major commercial deployment

The second, more significant barrier to the adoption of voice verification has been the lack of clarity from regulators. Organisations have so far taken a ‘wait and see’ approach, relying on first adopters to bear the cost of compliance and overcoming any potential regulatory hurdles. Fortunately in January this year the International Standards Organisation (ISO) released its new International Standard – ‘ISO19092:2008’ – which describes the security framework for using biometrics for authentication of individuals in financial services. It introduces the types of biometric technologies and addresses issues concerning their application.

The standard describes the controls and proper procedures for using biometrics as a mechanism to authenticate an individual’s identity in financial services. The standard was developed to ‘promote the integration of biometrics into the financial industry’ and should provide compliance departments with the confidence to go ahead and deploy the technology with the full support of an international standard. This has proved particularly timely with financial services organisations being pressured by both customers and regulators to improve their procedures in order to help fight fraud and combat identity theft. ISO now sees biometrics as a viable technology, and clearly sets out the commercial environment and processes that need to be in place for successful customer ID and verification using voice biometrics.

At a recent biometrics forum in New York it was clear that it was regions such as Australia and Europe that were setting the standard, with one major European bank – ABN AMRO – already rolling out voice biometrics to some four million customers across 4,500 branches. When polled, their customers responded positively, with 83 per cent preferring a voice verification system to their older five digit personal codes.

It seems as if Voice Verification could finally be about to come of age. The technology has the potential to dramatically improve the usability of telephone authentication while enhancing security and reducing identity fraud. The final barriers to the adoption of voice verification have been removed – it’s a largely software-based open standards based technology investment, it’s highly accurate, and significantly improves the customer experience – if you’re a bank, insurance firm or building society with security and identity theft concerns, what’s not to like?