Application of biometric face identification technologies in financial institutions
By T. R. Abdullin, T. V. Shipunov, and M. N. Zakirov of Inoface (Metrica B LLC)
The legal aspects of the use of biometric technologies for face recognition of people at the current time are given. An overview of existing solutions in the field of biometric identification of clients by face by Russian banks is presented. The current solutions of such banks as Sber, Alfa-Bank and Ak Bars Bank, as well as examples of the equipment they use, are considered.
Introduction
At present, new information technologies are actively permeating into all fields of human activity. The digitalization process is one of the main trends in the development of society and is becoming one of the key indicators of the country’s development.
It is worth noting that technological innovations are introduced at different rates in different areas of life. The banking sector has become a priority target for digitalization due to the following prerequisites:
Information technologies used in the banking make it possible to make more understandable, faster and safer transactions, increase operational efficiency and manageability of financial transactions.
These technologies provide the bank’s clients with the opportunity to choose the offers that suit them, regardless of the geography of the financial institution.
The spread of digital services in the banking sector contributes to a better understanding of user needs and makes it possible to create individual offers for customers, improving the way banks interact with potential customers.
Banks that use digital solutions in their work thus form their image and appear to customers as modern technologically advanced organizations.
The combination of applied methods of computer vision leads to an increase in the security of banking operations.
The World Bank report “Competing in the Digital Age: Policy Implications for the Russian Federation” states that the introduction of digital tools in the credit and financial system is carried out at a faster pace, which allowed Russia to enter the top five world leaders in this area. Today, activity in the field of financial technologies has increased even more: according to experts, 86 percent of Russian banks are already introducing digitalization of new technologies into their activities.
Banks are striving to provide their customers with increasingly reliable services in terms of security, and for this they need to constantly introduce new technologies, including the use of artificial intelligence, which can help with a variety of tasks. Banks’ technological steps lead to the solution of many important tasks – the creation of new methods for detecting threats, automating template processes, introducing and modernizing mobile applications, organizing their own back- and front-office systems, as well as introducing artificial intelligence tools into their work. Currently, the most famous digital technologies in the field of AI that are used in the Russian Federation are big data analysis tools, process robotization, chat bots and biometric recognition.
Another important task is to adapt banking instruments to the wishes and needs of clients of credit institutions and personalize banking products and services. The use of artificial intelligence makes it possible to make the customer registration system much simpler, and servicing current customers faster, for example, voice biometrics will come in handy when contacting a contact center, and when visiting an office, it will be enough to look at the camera to confirm your identity. Banks use biometric analysis to identify customers and recognize fraudulent transactions. Among the most popular identification methods are the following: fingerprinting, identification by voice, geometry of the palm vein pattern, iris and face recognition.
Key factors behind the growth of facial biometrics in Russia:
a technological breakthrough in the field of machine learning has naturally provided the development of facial recognition technologies;
the achievements of Russian companies that take first place in international competitions, which aroused sufficient interest from large investors;
high availability of equipment;
creation of the state national database – the Unified Biometric System.
To date, many participants in the banking market of the Russian Federation are implementing their own biometric projects: the most famous of them are Sber, VTB, Alfa-Bank, Post Bank and Ak Bars Bank.
The technology of using biometrics is increasingly being used to identify and authenticate users for initiating and accepting payments, electronic banking, electronic document management, access control, etc.
Russian banks collect customer biometric data in two ways: for their own purposes, in order to improve the security, convenience and speed of customer service, as well as for the Unified Biometric System (UBS), which was launched by the Bank of Russia and Rostelecom in the summer of 2018. According to the report of the Bank of Russia, as of September 2022, 209 Russian banks are collecting biometrics for the Unified Biometric System.
Figure 1 Map of banking service points where you can take biometrics
This system allows citizens to become clients of banks without visiting the office due to remote identification. The submission of biometrics for clients is voluntary. Banks that have permission to do so can collect data in the UBS (face image and digital voice cast) at the request of the client, however, only a few credit organizations provide services through the UBS (opening an account, issuing a loan and making payments). Thus, we see that the state platform is an important component of the entire Russian biometrics market, and in the future its pervasion will go far beyond financial and credit institutions and will enter all areas of citizens’ lives.
Application of a biometric face identification system in leading Russian banks
Let’s consider the advantages of introducing biometrics in financial institutions based on the already created solutions of large Russian banks.
In 2020, Sber opened a new branch in Moscow, which was equipped with modern biometric queue management system (QMS) terminals, which helps bank visitors quickly select the desired service without resorting to the help of an employee. In addition, the function of pre-registration via a mobile application is implemented. At the moment the client receives the coupon, the system recognizes the client by his face and transmits the information to the bank employees to provide a personalized service. Another distinctive feature of the application of digital technologies is the use of biometrics in ATMs. The system is capable of recognizing a registered user by biometrics, even if he has forgotten his phone and plastic card. The terminals are equipped with special hardware that protects against unauthorized access, for example, if the user presents a photo or video recording for another person. After successful authorization, the client gets full access to the ATM capabilities and can manage operations both using the touch panel and by giving voice commands, for example, to withdraw money.
Figure 2 Sber ATMs with biometric face authentication technology
At the end of September 2020, Alfa-Bank began to open offices in the “Phygital” concept. The branches have implemented a biometric QMS with face recognition technology that identifies the client and asks for what issue he applied for. Through the use of the recognition system and wireless devices, bank employees themselves approach customers in the branch, and due to this, comfort is increased and the phenomenon of queues disappears. In addition, the introduction of an electronic system reduces the consumption of paper resources. Starting interaction with the client, the terminal sends his photo to the manager, thanks to which he can quickly approach him in the department and address him by name. The bank also added the ability to submit biometrics in a mobile application. The effectiveness of interaction with the bank is taken into account by video recording the emotional state of the client and employee using machine vision.
Figure 3 QMS with biometric authentication in Alfa-Bank branches
Ak Bars Bank’s own technologies for biometric identification by face
Ak Bars Bank, along with other banks, introduces the possibility of online customer service without queues and the need to visit the bank’s office, which increases customer loyalty. At the same time, the bank does not need to produce plastic card blanks from certified suppliers, personalize the cards and carry out delivery. Savings also occur due to the reduction of the bank’s costs for servicing offices and salaries for operational employees. The issuance of digital cards is also beneficial from an environmental point of view.
The introduction of a new method of identification using the Unified Biometric System will contribute to the greatest distribution of digital cards. In addition, most likely, the digital format of the card is also only a transitional form in front of a more advanced payment system, for example, using biometric data.
Along with large banks, thanks to a timely and competent approach to financing innovative projects, Ak Bars Bank has become one of the leaders in the digitalization of its services, including through the development of its own biometric facial identification system.
Face2 is a complex of solutions based on high-precision biometric face recognition systems. Includes four components:
Face2Pass is a biometric face access control system. The identification algorithms used comply with Federal Law-152 “On Personal Data”, which guarantees the security of biometric data.
Face2Security ensuring the safety of the employee’s workplace by recognizing the user’s face in front of the computer
Face2Pay is a biometric bank acquiring system that allows you to pay for goods and services by face. The payment system of biometric acquiring has a high degree of security that meets the requirements of the Unified Biometric System for conducting payment transactions in accordance with Federal Law-54 “On the use of cash registers.”
Face2Loyalty is a system of discounts and loyalty based on the biometrics of customers. Refusal to use plastic cards (fuel, discount, promo codes).
Ak Bars Bank customers have access to the Face2Pay biometric technology, which allows them to register their biometrics in the bank’s mobile application and select the means of payment used in the future for transactions. After that, being in a trade and service enterprise, where there is a technological readiness to pay for services or goods using facial biometrics, the client can pay without cards or mobile devices.
Thanks to the constant introduction of digital technologies into its services, Ak Bars Bank is a laureate of numerous financial and technical awards. Every year Ak Bars Bank becomes the winner or laureate of the FINAWARD. In 2020, for the implementation of the loyalty program with the Face2Loyalty facial recognition system, and in 2022, the bank was awarded a special nomination for opening a “Better” office in Kazan.
“Better” office of Ak Bars Bank is a testing ground for advanced biometric solutions
Figure 4 Office of Ak Bars Bank “Better”
The introduction of biometrics at offline touch points with the client, in addition to increasing security, can also significantly improve live interaction with the client and connect it with the history of online interactions. The ability to offer targeted advertising offline (screen of a queue management system, an advertising panel with biometrics in the waiting room, etc.) will allow linking online and offline marketing with a single strategy, which in turn will lead to an increase in product pervasion into the client and will allow more reliable collection of data about interaction between the client and the bank.
Also, the use of biometrics can significantly reduce the time and required actions when identifying a client when providing a service. The client may not even have a passport with him, but having the opportunity to compare the photo on the previously presented passport, the submitted biometric templates and the person in front of the client manager, it is possible to carry out even significant operations.
Since 2021, Ak Bars Bank has moved to a new concept of customer service offices in the “Better” format. The latest achievements of the bank’s IT development team were applied in it – customer service by biometrics, ATMs, a queue management system by face, biometric access to the depository is planned. The bank branch also has a cafe with an acquiring cash desk, where visitors can pay for drinks using face biometrics.
Figure 5 Customer service using a biometric face authentication terminal
An electronic queue terminal is installed at the entrance to the “Better” office. If the client has already handed over the biometrics, the system will recognize him and offer personalized services based on the statistics of the client’s requests and his preferences. Algorithms of the recognition system make it possible to identify a person with high accuracy using images from the camera. If the client is identified, the service will be provided to him even without presenting documents. A bank employee can determine the location of the client thanks to the tracking system. At each point in time, the employee’s device displays the position of clients in the office and their waiting time.
Currently, the bank is considering the possibility of using biometric facial identification systems in depositories of offices for security systems of bank safe deposit boxes. It is assumed that such an opportunity will be available to customers registered in the Ak Bars Online system.
Technical and technological innovations (“know-how”)
The system for collecting biometric data of Russians by photo and voice has already been launched, but has not yet been introduced at full capacity, and the technical requirements for equipment have already been approved and will only become tougher in the future. The order of the Ministry of Digital Development of Russia No. 930 dated September 10, 2021 sets out the requirements for information technologies and technical means designed to collect and process a face image for identification purposes. In particular, it establishes uniform requirements for image registration: resolution, equivalent focal length and illumination parameters, as well as requirements for image and voice recording parameters.
In 2020, Ak Bars Bank, on the basis of a competition, identified the best candidates and attracted “Metrica B” company to implement its own project. The Bank entered into an agreement for the development and manufacture of equipment for its own biometric identification system. As a result, the bank managed to get into the list of the largest banks implementing their own biometric projects. And by the end of the year, all offices and subdivisions of the bank in Kazan were equipped with a biometric identification system.
Inoface (Metrica B LLC) is an accredited IT company, a resident of the Skolkovo Innovation Center, that creates solutions based on biometric face recognition technologies. Many years of experience and high qualification of employees allows them to carry out our own developments in the field of microelectronics and produce completely new and unique solutions in the field of biometric face identification systems. The company independently designs and manufactures equipment, as well as software for it. The “Better” office houses cutting-edge developments using the Inoface line of equipment.
Figure 6 Biometric authentication devices “Inoface”: a. terminal with a 7-inch display for access control, acquiring, customer service; b. parking terminal; c. biometric acquiring on vending machines and self-service machines
Further development of this technology in the bank will be scaled up in the offices of Ufa, Izhevsk and other regions of the Russian Federation, where there is a representative office of Ak Bars Bank. A decision was also made to modernize the QMS in all divisions of Ak Bars Bank. Ak Bars Bank is actively cooperating with Center for Biometric Technologies JSC and is already using the state standard model, which allows using the face recognition system in vending payment systems.
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