Ariel Avitan, Industry Analyst, Network Security Technologies at Frost & Sullivan, considers an innovative approach to mobile banking security and authentication

As many new technologies pass the proving stage, the burden falls then to organizations to implement these new technologies and get them into the hands of their end users. Banks and financial institutions are verticals that are always looking to increase the security of transactions, while at the same time lowering costs. In order to achieve this, they are trying to get a better grasp on everyday technology that will allow them to present and offer different options to existing and future clients. 
A good example for this approach is mobile banking. The services that are offered on mobile banking platforms provide both cost savings to the banks in human resources expenses and manual transactions, while offering time and cost saving benefits to the banks clients. To date, the mobile banking market has grown rapidly, having a CAGR growth rate of 4% and reaching an estimated $3.7 million (2.6 million) in revenues in 2008. This market is expected to increase at an estimated CAGR of 14%, with revenues reaching $14.7 million by 2012.

Major restraints
There are some major restraints that are slowing the mobile banking market. Other than the general economic crisis, one of the primary restraints is the difficulty in authenticating the identity of the mobile banking user.
While e-banking has a lot of strong authentication methods to verify the identity of the user, such as tokens and knowledge-based questions, mobile banking has different usability needs, and is more prone to malicious usage, as mobile devices are easily stolen, which means that familiar, strong authentication solutions are not sufficient for mobile banking.
One company tackling the mobile strong authentication issue is an Israeli based start-up called Classifeye. Classifeye has developed a solution that not only upgrades the strong authentication that is in use today, but also uses a regular device to do so.
Classifeye has developed a solution that uses the camera built into the mobile handset. By taking a picture of two fingers with the camera, Classifeyes solution can biometrically authenticate the user. This solution is a great way to upgrade the strong authentication most used today from the what you have factor, such as a token, to a what you are factor, such as a fingerprint in the two factor authentication method. Classifeye understands that in order to penetrate this market, there is a need to develop an authentication solution that is both easy to use, provides a higher standard of authentication, and has a very low error and false positive ratio.
A main vertical sector that could use Classifeyes solution is the e-banking vertical. Most banks are thinking of distributing hardware or software OTP solutions to end users for conducting transactions. These solutions come with distribution costs, and added hardware and support costs. Having Classifeyes solution will not only reduce the total cost of applying a two factor authentication solution, but will also upgrade the security, as this solution is biometric and harder to overcome.

New pilots
Classifeye is now working on new pilots with various mobile and financial organizations in Europe, as well as focusing on its main target, which is helping the micro-financing process in third world countries. With the help of Classifeyes solution, micro-financing organizations are able to provide their clients with many more services, and enhance revenues from the existing clients.
Frost and Sullivan believes that solutions like the Classifeye solution will enable mobile banking to grow, while reducing the overall branch costs of the different financial institutes and enhancing the overall iinstant services and offerings that the banks have today. These attributes are critical to the times we are experiencing now ,when cost reduction is a key driver in any product or service that is offered to the different markets.