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Biometric ATMs for rural India

ATMs with biometric devices are the latest solution in the ongoing effort to offer banking services to the rural masses. By Chirasrota Jena

To reach the rural masses, banks are going all out in providing a user-friendly banking experience. To boost micro financing initiatives, banks are deploying biometric solutions with ATMs. Establishing the identity of a rural depositor through biometrics makes it possible for illiterate or barely literate folks to become part of the banking user community. In recent years the importance of biometrics has grown tremendously with an increasing demand of security in accordance of unique identification of individuals. Its use for identification in applications other than policing is on the rise. In view of the rapidly increasing applications, the scope of biometrics is also increasing, be it identification via face, voice, retina or iris. Fingerprinting, however, has the advantage of being a familiar concept worldwide.

In the retail payments arena, developments in biometric technology have made their presence felt in the pervasiveness of self service devices including Automated Teller Machines (ATMs) and Point of Service (POS) machines. Some of the new generation POS terminals are biometric enabled with smart card readers, allowing thumb-print based authentication. Some Indian banks have started implementing biometric applications in retail branch applications for officer authentication. Elsewhere in the world, efforts are on enabling payments through kiosks based on fingerprints (non-card based). ATM enhancements with biometric support envisaged by vendors eliminate the need for PIN entry, and authenticate customer transactions by thumb-impressions. A simplified menu on ATMs coupled with possible audio guidance in local language enable easy use for rural masses. So far bank ATMs are dependent on PIN verification. The fingerprint authentication method is non-PIN based, and this requires enhancements to the standard Switch environment.

Securing transactions with fingerprints

With the development of biometric solutions for the ATMs there is no need to remember PIN numbers. Software vendors are coming up with finger print solutions for the rural masses. Chennai based Financial Software and Systems (FSS) has recently launched its Biometric ATM Interface Solution (BAIS) that enables connectivity of ATMs with biometric support to Electronic Financial Transaction (EFT) switches. Elaborating on the working of the biometric solutions, G. P. Shekar, Head - Consulting Practice, Financial Software and Systems (P) Ltd. says, “Customers opting for biometric authentication can visit a nearby kiosk or ATMs or bank, where his finger-print data would be scanned into a special PC with a finger-print scanner and the scanned fingerprint is then stored in an encrypted form in a central server. When a customer inserts (or swipes) his card in a biometric enabled ATM, he is prompted to set his finger in the fingerprint scanner. The transaction along with customer’s biometric information is passed on to the switch. The switch verifies the fingerprint with the server, and if successful, requests the banking application to authorise the transaction.” Based on the result, the Switch instructs the ATM to complete the transaction. FSS’ BAIS solution meets this requirement, by performing requisite message translations as well as confirming authorisation.

CMC Limited which has its presence in the biometric space for nearly two decades has also developed solutions for banks. CMC’s Fingerprint solution provides high level authentication for accessing ATMs. Fingerprint solutions provides an interface to integrate with an ATM application. CMC has indigenously developed FACTS (Fingerprint Analysis and Criminal Tracing System)—an advanced automated fingerprint identification system, using image processing and pattern recognition techniques. FACTS was initially targeted at law enforcement, but with increased concerns on security and personal identity, CMC started focusing on the banking and related sectors. B M Mehtre, DGM, R&D, CMC Ltd says, “Fingerprints of account holders are captured through the scanner in the system at the time of account opening. A template is created for each fingerprint by extracting features and stored in the debit card against the unique Customer ID. During verification, the fingerprint is captured using a fingerprint scanner attached to the ATM and 1:1 matching of the fingerprint captured is done with the templates stored in the debit card. Upon a successful match, the user is allowed to perform further transactions.”

Pune based Axis technology is another Indian company which is developing biometric solutions for ATMs and kiosks in the banking sector. Says Abhay Khinvasara, CEO, Axis Technology, “Our ATMs can work with popular protocols that are being used in the financial transaction infrastructure. Axis ATMs will also work with any type of authentication required be it PIN or biometric based. The ATMs are equipped with a high quality fingerprint sensor ideally suited for dry, moist and rough fingers and advanced image processing and pattern recognition algorithms for fingerprint verification (FBI approved).There are also intelligent and dynamic security settings and other biometrics like Iris, face or even layered biometrics, which can be integrated into it.”

How it works

With ATMs supported by biometric solutions, banks having a presence across the country are leveraging on this technology. The ATMs are networked and connected to a centralised computer (Switch), which controls the ATMs. The use of biometrics identification is possible at an ATM. The information can be stored at a bank branch. ATMs are so prevalent and you have so many people using ATMs that it becomes easy to use biometrics as a replacement for an ATM PIN. The typical ATM has two input devices (a card reader and keypad) and four output devices (display screen, cash dispenser, receipt printer, and speaker). Invisible to the client is a communications mechanism that links the ATM directly to an ATM host network. The ATM functions much like a PC, it comes with an operating system (usually OS/2) and application software for the user interface and communications.

While most ATMs use magnetic strip cards and personal identification numbers (PINs) to identify account holders, other systems may use smart cards with fingerprint validation. The ATM forwards information read from the client’s card and the client’s request to a host processor, which routes the request to the concerned financial institution. If the cardholder is requesting cash, the host processor signals for an electronic funds transfer (EFT) from the customer’s bank account to the host processor’s account. Once the funds have been transferred, the ATM receives an approval code authorising it to dispense cash. This communication, verification, and authorisation can be delivered in several ways. Leased line, dial-up or wireless data links may be used to connect to a host system, depending on the cost and reliability of the infrastructure. The host systems can reside at a client’s institution or be part of an EFT network. The EFT network supports the fingerprint authentication. Point-of-sale services that use biometric solutions are also possible.

Shekar says, “The FSS Biometric ATM Solution consists of a central server which holds a repository of customer fingerprints. It also customises the Switch to enable authorisation of a customer’s biometric data and interfaces with ATMs enabled with biometric devices as per FSS specifications. The central server solution is platform independent, it uses Java and can run on Unix and Oracle/ Microsoft SQL Server, customisation to BASE24 Switch (of which FSS is the distributor) is done using TAL. Biometric application and devices from Secugen are used for customer interface and application development.”

Axis Technology on the other hand, has developed an innovative new product called the Biometric Retrofit Kit for ATMs. This kit converts a regular ATM to one that authenticates users based on biometrics—fingerprint or iris. This is an affordably priced kit tgat has generated interest among financial institutions.  

Recent Initiatives

Deploying ATMs for rural masses depends largely on banks stepping forward to take the requisite initiatives. The recent directive from the government on financial inclusion (“banking for the common man”) is a key driver for the growth of such solutions in India. Banks are quite aware of the untapped potential in the rural sector. The telecom industry is witnessing a blistering growth pace, and so is the Internet. The National Rural Employment Guarantee Program that guarantees employment and payment in the rural sector requires robust solutions. Using thumbprint and voice guidance in ATMs reduces literacy requirements to a considerable extent. However, the technology is not restricted to rural masses. FSS is in discussions with Andhra Bank for deploying the BAIS. Several other public sector and private sector banks have shown interest too. Says Shekar, “FSS would like to work with ATM and POS vendors to provide innovative and cost effective solutions to banks and customers.” FSS is striving to modularise and ‘ruggedise’ the solution to perform online functions across a wide variety of delivery channels and payment systems. Apart from these banks, some other banks such as ICICI Bank are planning to introduce biometric authenticated ATMs in rural India.

CMC has been working with Institute for Development and Research in Banking Technology (IDRBT) on a pilot project in rural banking. Biometric (Fingerprints) smart cards, which consist of fingerprint data and financial data, will be issued to the rural banking customers for carrying out financial transactions. Elaborates Mehtre, “For building and developing various applications, CMC has a biometric technology group at its Research and Development Centre in Hyderabad. The team evaluates the latest technologies emerging in the biometrics area. This helps CMC’s solutions to be competitive and cost effective. CMC has been working with Bank of India for introducing biometric ATMs. CMC has demonstrated its Biometrics ATM solution on the eve of inauguration of mobile ATMs for the bank.”