Biometric technologies are becoming more affordable as the need for secure authentication grows.

Biometrics developers Cavio and InnoVentry are targeting financial institutions with technologies to authenticate customers and secure transactions. But questions remain about biometrics' ability to overcome existing technologies' limitations.

Cavio last week announced its namesake software that uses thumb, finger and hand reading to authenticate participants in online trading transactions. The system guarantees the identities of both buyer and seller through nonreplicable biometric data that measures the curvature and depth of a fingertip.

The system is initially targeted at import/export merchants, but Seattle-based Cavio's ultimate goal is to have biometric readers at retail locations and financial institutions.

Cavio 1.0 is in beta now; general availability is scheduled for December. Separately, InnoVentry is negotiating with online banks, such as WingspanBank.com, to provide biometric authentication for banking services set up at retail locations. San Francisco-based InnoVentry has already installed 550 kiosks that provide check cashing with face-scanned biometric authentication at retailers including Wal-Mart Stores and McDonald's.

InnoVentry officials would not say when the first bank partnership will be officially announced.

To be sure, using biometrics in the financial sector is not a new idea, but Cavio and InnoVentry hope its time has come. Implementation costs have lowered, biometric devices have become more affordable, and accuracy has improved, according to Jon McCowan, an analyst at Icsa.net, an Internet security company in Carlisle, Pa.

At the same time, online fraud and piracy are increasing at an alarming rate. The burgeoning volume of Internet transactions has prompted some to look for better means to determine who is at the other end of the wire. Houston-based Bank United implemented an iris scan pilot program in May 1999. The bank teamed with IriScan and Diebold, a manufacturer of ATMs, to mount biometric readers in existing ATMs, which were dubbed EyeTMs.

Users experienced no more glitches with EyeTMs than with regular ATMs, and implementation was relatively easy, according to Ron Coben, executive vice president of Bank United. In addition, the price was not prohibitive, with each EyeTM costing about US$5,000. The bank anticipates the next-generation system, due within a year, to be less expensive.

In the meantime, Bank United and other financial institutions that want to deploy biometric technology to a mass audience need to fix basic problems, including scalability, reliability and security of the systems themselves. Bank United is not sure whether its current technology will have the capability to store a much larger database of biometric scans. Similarly, InnoVentry plans to deploy 12,000 kiosks over the next three years but can't guarantee that its database can scale to cover the increased volume of calls that this expansion would generate.

Gaining the capability to calibrate false negative readings vs. false positive readings is crucial, some analysts said. "If a bank ATM refuses to give people access to their accounts, they've just lost a customer," McCowan said.

Bank United's Coben is optimistic that the technological hurdles will be overcome and is eager to implement his company's biometric program further. Customers "have to have safety, they have to have security for the things they want to access, but they are not going to want to remember a unique code for everything in their life," he said.

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