Lloyds Bank moves closer to abolishing passwords


Tim Wallace

July 6, 2015

The bank wants to cut down the number of codes and passwords customers need to logon

Lloyds Bank is close to launching a new system where customers tap their contactless payment cards on their smartphones to prove their identity, cutting down the number of passwords they need to use.

This is a step up from the current verification system to install the mobile app which involves a phone call with a password, a process which goes wrong in a minority of cases, leaving some customers frustrated with the new technology.

It is also the latest strike by Lloyds in a brewing tech war between each of the big banks, and also the wider technology sector which is trying to muscle into the financial services industry.

So far Barclays has taken the lead in developing new technologies and publicising their services, with examples including the mobile cheque imaging facility which the bank pioneered, allowing customers to pay in cheques with a smartphone instead of visiting a branch.

Meanwhile services such as Apple Pay, launching on the iPhone later this month, will see technology firms enter the payments market in increasing force.

Lloyds has set up a digital hub which brings together staff from all parts of the bank in an effort to bring new ideas to market far more quickly than is traditionally possible in a sprawling, nation-wide bank, and so to compete effectively with these emerging rivals.

One product of this hub it its’ “tap to bank” system, which has been designed and taken through internal trials, including tests on customers and around 150 staff, in just eight weeks.

The system will be used whenever a customer downloads the bank’s app to an android smartphone for the first time.

•Lloyds Bank launches digital cheque payment pilot
•Killing the need for passwords with biometrics

Instead of receiving a phone call with a code to type in – a process which fails in around 10pc of cases and which is particularly difficult for deaf customers – the customer will be able to tap their contactless payment card on the back of the phone, using the smartphone’s near field communication technology to verify their identity.

From then on, the customer will only need to type in three digits each time they want to access the banking app.

As the bank knows it is that customer’s phone and card, and uses three digits from their “memorable information,” this matches the same security standards as the existing system, but should be quicker and more reliable.

Lloyds’ system is scheduled to launch at the start of 2016.

“What is critical is that these [trials] are really quick, really low cost, they are safe, and it is a small number of customers,” said Marc Lien, Lloyds’ director of innovation and digital development. “We get the insight in six to eight weeks, rather than a three-year project, where it is only at the end of year three you know that it works.”

The new system is also part of a wider move to cut down the number of passwords bank customers have to use, with the aim of making online and mobile banking more convenient and less time-consuming.

Other examples include the heartbeat identification system Lloyds unveiled recently, which uses a customer’s pulse as a password. While the technology is not going to be rolled out to public use, it is seen as an example of the type of biometrics which could be used as secure replacements to passwords altogether.

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This article was written by Tim Wallace from The Daily Telegraph and was legally licensed through the NewsCred publisher network.

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