What is next in mobile banking

By Julian Bajkowski | Thursday, November 26 2009

Voice biometrics technology seen as more secure than security codes sent by SMS.

The National Australia Bank has confirmed a spike in customers using its retail banking services from internet-enabled mobile phones is likely to lead to it replacing security pass codes - now sent by SMS - with biometric voice prints within a year because of growing security concerns.

NAB's head of direct channels, Tim Cullen, said the institution was trialling the extension of the voice-printing technology to become an option for most of its internet banking customers as it looked for ways to boost transaction security and improve customer experience.

The switch to voice authentication would address a key risk that has emerged since retail banks began offering more mobile banking services. SMS passwords should not normally be sent to the same device used to conduct an internet banking session, but that has been happening.

While SMS pass codes have dramatically reduced the rate of fraud for traditional internet banking sessions conducted via a desktop or laptop computer, the convergence of mobile handsets with web technology has opened the possibility that stolen phones could be used to illegally access funds.

"What we like about voice biometrics technology is that it is providing not only a more secure environment for our customers, it's actually a better experience than the current [SMS] process," Mr Cullen said.

"It's very rare you have a technology that creates a more secure and better customer experience."

Mr Cullen said NAB was now refining the business case for the new voice biometrics system and, pending project approval, hoped to deliver it in the next 12 months.

The voice identification technology is resold to NAB by Telstra as part of its $600 million network services deal. Its addition to internet banking processes would extend an existing deployment that is used to verify the identity of customers accessing telephone banking or calling NAB's call centre.

NAB estimates that it churns through about 13 million individual internet banking sessions per month, with individual customers logging in about 10 times during that period.

The Australia and New Zealand Banking Group, Commonwealth Bank of Australia and NAB have all raced to bring new mobile applications for Apple's iPhone to market during the past year in an effort to lure high-yielding, web-savvy customers to their online services.

"The role of internet banking on mobile is going to increase significantly," Mr Cullen said.

Another issue that banks are grappling with is that customers who request SMS codes when using mobiles for internet banking are forced to inconveniently toggle between screens and then enter an alpha numeric code. Mr Cullen said the new voice print facility would allow customers to initiate a transaction, such as a money transfer, that would in turn prompt a phone call from the bank to the customer's handset to obtain and verify the voice print and then automatically approve the transaction.

While NAB looks set to be the first bank in Australia to deploy the voice print approach to internet banking, it is unlikely to be the last.

The general manager for financial services at Telstra's enterprise and government division, Rocky Scopelliti, confirmed the carrier was selling the voice authentication service on a non-exclusive basis.
In April this year, Commonwealth Bank signed a $1 billion networking deal for 10 years with Telstra.
KEY POINTS

• Security pass codes sent by short message service will be replaced due to security concerns.
• Voice authentication will give added security and be easier to use.
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