The launch of mobile phone services by Equity Bank through the Thin SIM technology could be delayed further after the High Court on Wednesday stopped it until a suit on its credibility is heard. PHOTO | FILE
What you need to know:
Equity Bank is collecting customers’ fingerprints as it plans to employ biometric technology to verify over-the-counter withdrawals and ATM transactions.
Currently banks rely on customer verification documents — mainly ID card and passport — and signatures to confirm the authenticity of clients.
Equity Bank, Kenya’s largest lender by customer numbers has started collecting its customers’ fingerprints as it plans to employ biometric technology to curb fraud.
Officers at the bank told the Business Daily that they were collecting data before the system is used to verify over-the-counter withdrawals and ATM transactions.
“We are collecting data of both new and existing customers till we have enough numbers to roll out,” said an officer at the bank who declined to be quoted because he is not authorised to speak to the media.
Equity also hopes to ride on the platform to increase the pace of transactions in its banking halls as tellers can quickly confirm the identity of customers.
Currently banks rely on customer verification documents — mainly ID card and passport — and signatures to confirm the authenticity of clients.
Banks have been victims of fraud, with annual losses estimated at over Sh1.6 billion.
Security experts said the amounts reported reflect only a small part of the real losses suffered since banks prefer internal disciplinary measures, in cases involving employees, to avoid the reputation risk that comes with such issues going public.
The losses have been attributed partly to poor controls by the lenders.
“That is an area where there is room for innovation and you can use available tools to ensure you are dealing with an authentic account holder,” said Mr Habil Olaka, the Kenya Bankers Association chief executive.
He said that the industry did not have a requirement for banks to move to biometric identification, adding that he expected the technology to become standard given that debate has been going on in the sector.
Banks are in the process of moving their customers to the more secure chip and pin card technology (commonly referred to as EMV) following an industry agreement.
Under the agreement, a bank whose non-compliant ATM machine is used for fraud will absorb all losses associated with the theft. This has motivated lenders to push their customers to the EMV technology platform.
Uptake of the technology by small banks could be a challenge due to the high cost of hardware, software and the process for verification, validation and authentication.
Equity is allocating an identification number to each customer which when keyed in is able to show their personal information.
The retail structure of the bank exposes its tellers to high fraud attempts, with cases of some customers denying that they carried out transactions in their accounts.
The bank has a customer base of over six million in Kenya and eight million in the region. The biometric system puts a time stamp on a transaction.
Government is the main user of biometric technology as was the case in the 2013 General Election and in the immigration department.
It has also been used in the insurance industry to curb medical fraud. Patients have to scan their prints at hospitals to verify payment of medical services.
Barclays Bank Plc started putting in place biometric scanners for its corporate customers in September this year and expects to put the technology throughout its system in 2015. In India the technology is used for ATM transactions.
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