Cash transactions in the twinkling of an eye

A new breed of ATM will identify users by their irises. It's neat technology but what does the use of this biometric data imply for the future? Dan Sabbagh reports

They are so novel it's hard to believe that they could be in use as soon as next year, but high on the Nationwide building society's agenda is a new breed of cash machine that identifies customers by their irises - with unerring accuracy.

The Nationwide intends to trial just one cash machine in six months' time and acknowledges that it has no idea whether the trial can meet business requirements.

And there are others not wholly convinced. Computing tracked down the technology's inventor, John Daugman - now a lecturer at the University of Cambridge - who was unsure whether the public would find the technology morally acceptable. And while other banks aren't exactly stampeding to try such biometric techniques, nobody can argue that the technology isn't neat.

The human recognition technology is supplied by a privately held US outfit called Sensar which, in turn, licenses the core software from John Daugman's company, IrisScan.

US-born Daugman invented the core technology - which takes a photograph of an iris and reduces it to a 256 byte code - more than seven years ago. 'Mathematically, the uniqueness of each iris is without peer. The chances of two different irises having the same code is 10 to the power of 78,' said Daugman.

Each iris is sufficiently unique that it can be recognized despite the distortion of as much of a third of the data. Distortion sources include glasses, contact lenses or any other variable. And Daugman's system can also tell the difference between living and dead (or photographed) eyes.

But Sensar's contribution isn't trivial. It supplies the camera-tracking technology which locates a person's irises from a metre away. Kevin McQuade, chief financial officer at Sensar, explains: 'Three 35mm cam- eras are used. Two locate your x and y co-ordinates, while the third computes the distance and zooms in on your eye. The technique comes from targeting methods used by the US military for finding tanks on a battlefield.'

McQuade estimates that the Sensar system would currently add $5,000 to the price of an ATM, but this will reduce to between $2,000 and $3,000 over 18 months, assuming that banks start ordering the technology in volume.

First-time users in Swindon - where Nationwide's test machine will be located - will have to comply with a registration procedure so that the iris data can initially be captured.

The underlying argument Nationwide offers in favour of the technology is security. 'We need to keep one step ahead of the fraudsters,' said project director Mike Rehberger.

But ATM fraud is not generally thought to be substantial. Figures from banking industry association Apacs show that, in 1996, cash machine fraud totalled #4.4 million. Sounds a lot - but it is 0.005% of the #80.2 billion that was actually withdrawn last year.

Numbers like this have led NatWest to point out that it 'won't be using biometric techniques - for a few years at least.' And the bank points out that it is concentrating on rolling out smart credit and debit card technology to reduce the level of card fraud.

Nationwide's Rehberger suggests that the new approach will be easier to use. 'People are having to remember more and more passwords and PINs; this is simpler.'

True, but is this really worth spending $2,000 per machine? More to the point is whether people will accept a commercial organisation holding biometric data about them, however unobtrusively collected.

Understandably, the Nationwide is not too sure. 'We're approaching this very much with an open mind - hence the trial,' Rehberger said.

John Daugman added: 'Its implications are somewhat Orwellian - especially in a Western democracy. But it might be more popular in an authoritarian state such as Singapore.'