Passwords could be obsolete in as soon as two years due to broader adoption of biometric tools for personal identification, a trend that could be accelerated by the recent Equifax Inc. hack.
Secil Watson, head of digital solutions for business at Wells Fargo & Co., offered that prediction as part of a session on next-generation banking tools at the American Bankers Association's annual conference in Chicago, which also included profiles on artificial intelligence and digital tools. Watson said Wells Fargo is already offering "eye print" identification to its commercial borrowers as part of the bank's mobile app.
She said the biometric tool works quickly, is difficult for hackers to replicate and produces strong results since the veins in each individual's iris produce a unique print, even for identical twins. Enhanced authentication techniques could be particularly useful since so many passwords and other personal identifying information have been compromised by numerous cyberattacks, including but also preceding the massive Equifax hack.
"Not only have the latest breaches shaken the trust that the consumers have on passwords, but from a fraud and authentication perspective, our teams have been not necessarily trusting the password as the end-all, be-all of security for a long time already," Watson said.
Watson said the bank's initial rollout showed that customers are initially fearful of the new identification techniques. But once clients use the method and experience the convenience and speed of the technology, fear quickly turns to acceptance. On other biometric tools, Watson said clients tend to prefer eye print and thumbprint identification as opposed to using the client's voice as positive identification. She said clients value the discreteness and speed of eye print and thumbprint identification whereas voice identification can be conspicuous. However, she said the bank uses voice identification when borrowers dial into a call center, where identification can be seamless.
Machine learning and artificial intelligence can also help banks detect fraud and reduce the compliance burden from Know Your Customer and anti-money laundering act regulations, said Marc Andrews, vice president of IBM Watson Financial Services Solutions. Andrews discussed IBM's "Watson" computer, a question-answering program that gained fame for beating top "Jeopardy!" contestants that IBM has adapted for bank compliance functions.
Andrews said the solution has cut the time needed for due diligence functions by as much as 50%. For potentially suspicious transactions, such as large dollar amounts, Watson generates an alert that includes an automated risk score and a summary of the top three insights about the transaction. The report includes previous transactions, geographic location and other details that an analyst reviews. The analyst then either escalates the alert for a full-scale investigation or closes the case with a narrative explanation. Andrews implored the audience to consider artificial intelligence a tool that improves efficiency as opposed to replacing jobs.
"The idea behind this technology and artificial intelligence is not to necessarily replace people or anything of that nature but really to make your people more effective," Andrews said.
However, Trey Maust, co-president and CEO of Lewis & Clark Bank and the moderator of the session, almost immediately undercut that message. "I don't know about you, but I'm looking forward to the day when Watson or a Watson equivalent can automate most of the compliance function and just have human intervention for the most advanced tasks."