By Verne Kopytoff
FORTUNE -- Bank call center agents make good interrogators. What's your name? Your account number? Your Social Security number? Your mother's maiden name? Preventing fraud is, of course, the goal. But that doesn't make the process any more convenient.
An increasing number of companies are looking at an alternative that would do away with all of the annoying questions. Instead of an interrogation, the companies would verify their customers' identity using technology that analyzes so-called voice prints. Software would compare callers' voices with samples on file. Within a few milliseconds, the system would determine whether the speaker is, in fact, legitimate or an imposter.
Barclay's (BCS) and Vanguard are already using the technology, formally known as voice biometrics, with some customers. Other financial institutions and call center-intensive businesses like phone companies are considering it. Widespread adoption, however, will depend on factors like ease of use for consumers, reliability in preventing fraud, and the technology's cost. Consumers will also have to get comfortable with the idea of their voice prints being all that stands between their life savings and fraudsters.
"I think the public is getting ready for it," said Susan Austin, senior consultant with Enterprise Integration Group, a consulting firm that helps businesses with their call center planning and technology. "I don't think it's going to be the norm in the next few years, but it will be more prevalent."
Voice biometrics, as the technology is formally called, has been around for years. But companies are only now starting to take a more serious look following improvements in the technology and the increasing sophistication of fraudsters. The proliferation of mobile devices also adds to its allure. Entering lengthy passwords on smartphones isn't very practical when calling to get access to bank account balances, for example.
Barclay's customer service was in bad shape before it started phasing in voice print technology a few weeks ago, said Matt Smallman, who leads the client experience team for Barclay's wealth management division. High fraud rates cost the company a lot of money. Moreover, customers were having trouble answering all the questions lobbed at them by call center agents. Around 10% of all callers, many of them legitimate, couldn't get into their accounts. "Clearly, our old model was broken, and we needed to do something about it," Smallman said at a recent conference in San Francisco focused on voice print technology.
The company didn't decide on voice biometrics overnight. Extensive testing preceded the rollout last month. So far, about 30,000 clients have signed up. They can use the system to make basic inquiries like check their account balances, but not to transfer or withdraw money.
To enroll, customers make an initial call to Barclay's during which they are recorded while repeating a phrase. A second call is required to verify that the technology recognizes them. In subsequent calls, customers give their I.D. number to an agent and then go through a brief voice verification process. The technology automatically determines whether the voice on the other end of the line is a close enough match. On average, the process takes 40 to 60 seconds, Smallman said. So far, the service has worked well, with less than 1% of all voice print calls experiencing problems.
Not every customer who is offered the opportunity to enroll in the voice print program at Barclay's does so. Some are concerned about the privacy implications of having their voice recorded -- granted, many businesses already record customer service calls -- or they fear security breaches. Around 5% of the bank's customers have objected, Smallman said. In such cases, clients can continue to have call center representatives questioning them to verify their identity.
Austin, the consultant, said that it's important for companies using voice print technology to first get customer consent. Companies could, without warning, record their customers' voices during normal conversations with customer service agents and then use that for comparison for future calls. Austin said that members of focus groups have told her that they feel betrayed by such a program. Privacy advocates, no doubt, would also complain.
David Pollino, who handles fraud prevention for Bank of the West, part of BNP Paribas, said that voice print technology has several potential shortcomings. Business accounts may not work because several employees typically have access. The variety of voices could confuse the technology.
There's also the question of who's liable if there's fraud. Is it the bank? The customer? Or the company that supplies the technology?
Consumer psychology may also be a problem, said Pollino, whose bank does not use voice print technology. Bank customers, he said, prefer conspicuous security rather than subtle -- even if their protections are equally effective. Asking questions reassures people that the bank takes security seriously, he said. Replace questions with voice print technology, and customers may start to think that security is lax. "If you walk into a bank, you like to see a vault," Pollino said.
Determined hackers can overcome voice print technology, like any other security measure. Whether the danger is any greater than identity theft, stolen checks, or tampered credit cards is unclear. In theory, someone could fraudulently enroll for voice print access to someone else's bank account, providing they have a raft of personal information about them to get past the first step. They could also record a victim's voice and try to play it back, although banks can combat that tactic by making customers repeat random phrases to verify their identities. For the moment, traditional protections are so porous and voice print technology so new that hackers have hardly bothered to change their strategies.
Citing the stock repurchase and new products, Ben Reitzes raised his target 13%.
FORTUNE -- Like Apple's (AAPL) shares, the price targets analysts set for the company have been on a jagged downward slide since last September. Until Monday, that is.
That's when Barclays' Ben Reitzes broke the streak and upped his 12-month target to $525 from the $465 valuation he set three weeks ago, just before Apple's March quarter earnings call.
"We MOREPhilip Elmer-DeWitt - May 6, 2013 10:26 AM ET
Barclays met with Apple execs. Citi asked suppliers. Merrill searched Google Trends
FORTUNE -- Apple (AAPL) gave up most of Tuesday's $9.66 (2.3%) gains in the first half hour of trading Wednesday after three analysts issued tepid reports:
Barclay's Ben Reitzes lowered his Apple price target to $530 from $575 after meeting with two senior VPs -- Phil Schiller and Peter Oppenheimer -- although he insists that his 8% reduction had nothing to MOREPhilip Elmer-DeWitt - Mar 6, 2013 11:41 AM ET
What do any of their concerns have to do with building great products?
FORTUNE -- If Tim Cook needed further validation of Steve Jobs' policy of ignoring the needs and entreaties of Apple's (AAPL) shareholders, the results of the survey at right, released Wedenesday, could provide it.
It comes from a recent luncheon in New York City with several dozen Apple investors that was hosted by Barclays analysts Ben Reitzes and Anthony DiClemente.
If "the MOREPhilip Elmer-DeWitt - Dec 12, 2012 11:45 AM ET
Pouring cold water on one of Silicon Valley's hottest rumors
FORTUNE -- Although there is no shortage of iTV speculation -- thanks to rumor sites like Taipei-based DigiTimes -- and plenty of Apple (AAPL) analysts ready to calculate to the penny how much an Apple-branded TV set would add to the company's bottom line, some experts have started to back away from what was once seen as an inevitablity.
In December, Richard Gardner, formerly MOREPhilip Elmer-DeWitt - May 14, 2012 1:27 PM ET
A huge uptick in planned spending has analysts scratching their heads
Once a year in its Form 10-K Apple (AAPL) reveals to the SEC -- and to investors -- how much it has set aside in the year ahead for so-called CapEx -- capital expenditures on land, buildings, machinery, equipment and leasehold improvements (i.e. retail stores).
In that regard, the 10-K the company filed last week was a doozy:
The Company anticipates utilizing MOREPhilip Elmer-DeWitt - Nov 3, 2011 11:37 AM ET
A sampling of reactions to Apple's (AAPL) profits growing 125% year over year
IDC's Al Hilwa: "Apple's growth in the third quarter was simply jaw-dropping. In 20 years of following tech I have seen very few companies in the $90 to $100 billion run-rate and none that have produced 80% organic quarterly growth. The success of the iPad truly crystallizes the point that we are living in an era of rapid MOREPhilip Elmer-DeWitt - Jul 20, 2011 5:46 AM ET
A ruling in Barclays v. TheFlyOnTheWall shifts the balance of power away from content producers in favor of news aggregators. But Google News may still face obstacles.
By Abigail Field, contributor
FORTUNE -- Nearly a hundred years ago, the Associated Press won a U.S. Supreme Court case against a rival news service that was ripping off its stories, and in the process created a new type of lawsuit: the misappropriation of hot MOREJun 21, 2011 10:47 AM ET
The company finally has enough iPhone 4s in stock -- just in time for the Christmas rush
From the day it launched the iPhone 4 in June, Apple (AAPL) has ramping up production, trying to get supplies to the point where they could meet demand.
The company reached that point of retail equilibrium last week, when shipping delays in its online store, which had been listed at 3 weeks from June through MOREPhilip Elmer-DeWitt - Nov 9, 2010 10:38 AM ET
No longer an industry underdog, the company must tread more carefully, says an analyst
In a note to clients issued Tuesday, Barclays Capital's Ben Reitzes has added his voice to the chorus of commentators with free advice for Apple's (AAPL) executive team, now that it's caught the eye of federal regulators.
The Federal Trade Commission has reportedly won the toss and is looking into two possible antitrust issues: Adobe's (ADBE) complaint MOREPhilip Elmer-DeWitt - Jun 15, 2010 11:12 AM ET
|Inside the underground sex economy|
|Obama wants to expand overtime pay|
|NJ agrees to ban Tesla direct sales|
|Plug the financial leaks, now!|
|Bitcoin: taxes are the real reason it's doomed|