For years, bank customers have relied on user IDs and passwords to access their online accounts.
From a security standpoint, that’s no longer a smart practice, said Bank of America executive Michelle Moore, head of digital banking for the Charlotte-based bank. In an era of hacking, traditional IDs and passwords are prime targets, which is one reason Bank of America is exploring iris scanning and facial recognition as alternatives, Moore said.
“If you think about all the breaches and everything going on in the world, passwords need to go away,” said Moore, who is based in Charlotte. “No. 1, people forget them. No. 2, they’re not safe.”
For now, fingerprints are the only type of so-called biometric data Bank of America customers can use to verify their identities on phones and other devices. Last week, the bank announced plans to roll out fingerprint verification on certain personal computers with new Intel technology.
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But since this summer, the bank has also been testing iris-scanning technology with phone-maker Samsung. It’s too early to say what will happen once testing is complete, Moore said.
The second-largest U.S. bank is also testing Apple’s new facial-recognition technology feature on the iPhone X, which is scheduled to arrive in stores Friday. Moore said it’s not clear whether Bank of America will be ready to introduce the feature in time for the device’s launch, but customers would still be able to access accounts with IDs and passwords.
The bank’s deepening push into biometrics comes as companies of all types are under pressure to better secure consumer data following massive breaches in recent years, including some affecting the financial sector.
Corporations disclosing such breaches have ranged from Target and JPMorgan Chase to, just this year, Yahoo and Equifax.
In a recent interview with the Observer, Moore discussed the security of biometric data, the bank’s latest mobile technologies and an artificial technology tool called Erica the bank aims to release this year. Below are highlights.
On security of biometrics
The use of biometrics has swelled in recent years, as businesses from hospitals to fitness clubs have used it to verify customers’ identities. Bank of America rival Wells Fargo, which has a large employee base in Charlotte, also uses the technology with its customers.
Moore said Bank of America continues to look at biometrics that will make banking safer, faster and easier for customers: “Everything we do is marrying safety and experience together.”
One advantage of biometrics is they replace passwords that can be difficult for customers to remember. But as biometrics explode, so have concerns about whether that data can be hacked. Moore said the technology is safer than traditional IDs and passwords.
“If someone takes your phone and breaks into it, they’re not going to be able to find your fingerprint data, download it and then go use it somewhere,” Moore said.
“For me, this is safer, but we can always make it more safe,” she said. “And that’s why we’re moving towards biometrics, away from an online ID and a password that a lot of consumers use in other places.”
Not everything tested sees daylight. Moore said the bank explored using voice recognition, such as for when customers contact a call center: “That has proven still to be too clunky and too much friction in the process,” she said.
On new mobile technology
As more customers use phones and other devices rather than branches for transactions, Bank of America has continued introducing new mobile-banking features.
Just this year the bank launched the ability for customers to apply for auto loans on phones and other devices, a tool available in about 20 states including the Carolinas.
Moore said next spring the bank plans to launch a tool that will let customers complete the entire mortgage application process on phones and devices. The tool streamlines the process, which takes on average 15 minutes to complete, she said.
Such moves also come as Bank of America looks to further cut expenses. The bank has said deposits made on mobile devices cost it one-tenth of what it does for the same transaction in a branch.
Moore said Bank of America is following consumer trends and giving customers options. The bank also wants to reduce paperwork so customers can better focus on the experience of shopping for a car or home, she said.
“People are migrating away from paper,” she said. “People live their lives on this phone. And so why not make it easy for them to be able to buy a house, to buy a car, get a credit card?”
On artificial intelligence
Bank of America also continues testing a “virtual assistant” for phones it unveiled more than a year ago.
The bank has said the feature, Erica, will allow customers to perform transactions 24 hours a day, seven days a week using their voice. Moore said the bank remains on track to launch by the end of this year. The bank will probably pick one or two states for the initial release and then expand the roll-out, she said.
Erica is a play on the “America” in the bank’s name. It is expected to work similar to other phone virtual assistants, such as iPhone’s Siri.
Moore said Erica can pay a bill, give a customer account balances or provide the date for when a credit card payment is due, among other abilities. Moore said Erica, like other artificial intelligence, has been designed to understand a customer over time, learning that person’s preferences and habits.
“We’ve also given her a personality,” Moore said, demonstrating that Erica will say “you’re welcome” when thanked.
“People, we’ve learned, like to talk to these machines.”