Markets & Finance

Banks go for fingerprint identification to curb ATM fraud


Diebold managing director Africa Malek Ferdi (left) explains the features of the new ATM machine to CBK governor Njuguna Ndung’u. Photo/Salaton Njau

Bank ATM card holders will have the option to use fingerprint identification to curb fraud effected through identity theft.

A new line of Automated Teller Machines (ATM) launched Thursday by Diebold, an American tech company, and Kenyan IT solutions firm Tracom Services will have biometric identification devices as part of security features incorporated to boost the war against ATM fraud.

Diebold product marketing manager of ATMs Martin Koffijberg said the biometric recognition would add a layer of security for customers who could also choose to use the usual PIN system when making withdrawals.

“The biometric sensor will be optional on ATM machines as per the requirements of the banks and their customers,” said Mr Koffijberg during launch of the machines at the Central Bank of Kenya. Biometric identification is one of several security features in the ATMs launched at a time when banks are migrating their ATM cards to EMV (Europay MasterCard Visa) technology to curb fraud.

The new ATMs will additionally have a safe lock system that will prevent insertion of jammers into the money dispensing unit, which is another way that fraudsters use to steal money.

The card insertion slot also comes with a sensor that detects whether any object other than the card is inserted, and stops the transaction, detaining the card.

In the past, fraudsters have placed devices in the ATM slots, which skim and mimic card details that are later used to duplicate the card and fraudulently fleece accounts.

Standard Chartered Bank customers fell victim to the scam at the end of last year. They found anomalies, where withdrawals had been made from their accounts without their knowledge.

Diebold said talks with local lenders interested in the machines are ongoing, but did not give details, citing client confidentiality.

EMV debit and credit cards are implanted with a chip instead of the more fraud-prone magnetic strip.

The Kenya Bankers Association in turn launched a cost-shared Sh2.5 billion plan to migrate all banks to secure ATMs and plastic cards by September 30. Nearly 11 million cards will be affected by the move, but some banks having already issued the new cards.

READ: Bankers’ new ATMs project to cost Sh2.5bn

Central Bank Governor Njuguna Ndung’u said the number of Kenyans who use formal financial services will increase as more secure banking systems are put in place.