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Tokyo-based multinational bank Sumitomo Banking Corporation plans to develop a biometric system to confirm customers’ identities when making online payments.
Instead of using passwords, the technology will rely on biological attributes such as fingerprints, voices, and facial features to verify payments. In addition, the software will register user information in the system through an app. Sumitomo is looking into endorsing the technology to online retail and travel booking sites, electricity and gas companies, and insurance providers after the project’s completion.
Sumitomo will develop the technology through a start-up, which is also a collaboration with two other companies – Japanese technology company NTT Data and Irish biometric system developer Daon. However, Sumitomo will be the major stakeholder, while NTT Data and Daon will own 20% of the shares. Daon will provide the software by integrating its identity verification app IdentityX.
Although it has been a few years since banks worldwide started using the biometric system, it was only recently that the technology was introduced to the Japanese banking industry. As some regulators have reservations about the technology, they would rather play it safe by preserving old IT systems. Nevertheless, the industry’s aim to increase security for financial transactions has urged banks to utilize the technology. In addition, a change in banking law now permits banks’ investment in financial technology upon the approval of Japan’s Financial Services Agency (FSA).
The world economy reportedly faces an annual loss of up to $450 million as a result of cybercrime, which is triggered by factors such as weak passwords that are easily hacked.