DATE: Friday, September 5, 1997             TAG: 9709050594

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY AKWELI PARKER, STAFF WRITER 

                                            LENGTH:  121 lines

NORFOLK FIRM'S DEVICE PUTS BANKING AT YOUR FINGERTIPS

You're late and out of money. You decide to stop at the ATM for a quick cash infusion.

You stuff the crisp bills into your wallet and zip off. Hours later though, your stomach sinks as you realize you left the card inside the machine.

With any luck, you'll only have to wait two weeks for a replacement card to arrive in the mail. A little bit less luck could mean a thief makes off with a chunk of your checking account.

But what if your fingertip was the only card you needed? A Norfolk company, Real Time Data Management Services Inc., is taking that idea from the realm of James Bond thrillers and super-secret companies to the prosaic ATM.

``It is an absolute positive benefit to consumers,'' says Real Time President Ernie Sammons.

They're not the first to come up with the concept, but Real Time is thought to be the first company to manufacture and deliver a finger-scanning device with an automated teller machine, according to observers in the financial-services and automated identification industries.

This isn't the company's core business. For 18 years it's been providing behind-the-scenes support for credit unions, including several in Virginia, New Jersey and Florida.

The company, which has 32 employees, has developed more advanced teller machines in response to pressures on banks to reduce their costs and provide greater convenience to customers.

Real Time has been testing its fingerprint-scanning kiosk at Purdue University in Indiana since February. Last week, it delivered two more to the school's credit union.

The closet-sized kiosks do more than spit out currency.

Customers can open an account, withdraw money, apply for a loan, make a deposit and do almost anything else they'd do at a bank - and do it 24 hours a day.

``This is a self-service banking environment,'' says Sammons.

For customers, credit unions and bank bean-counters, the device has the potential to reduce the hassle and expense of handling money.

For instance, to use most ATMs you must swipe or insert your card and remember which personal identification number goes with what card. You have to be sure no one's peeking over your shoulder as you punch in the code. Oh yeah, don't forget your card when you're finished.

Real Time Data's alternative: press your index finger to a small plastic scanner on the kiosk. Confirm your identity and complete your transaction using the ATM's on-screen touchpad.

For banks and credit unions, the benefits are twofold - they stand to save on operating costs and reduce losses from fraud.

For customers, it's one less number to remember and one less card to worry about falling into the wrong hands.

Two-and-a-half years ago, Richmond Federal Credit Union needed to open an additional branch. But the economics of erecting a brick-and-mortar facility were prohibitive - $250,000 to build it and $150,000 or so annually to operate it. Instead, the credit union chose one of Real Time Data's ``virtual'' branches, which cost about $100,000 to install. With lower labor costs than a branch and less upkeep, the ATM costs about $12,000 a year to maintain, says Sammons.

Purdue Employees Federal Credit Union liked the idea and took it one more step, opting to add the finger scanner.

Meanwhile, to stem fraud losses, some banks require non-customers to give up their thumbprints to cash checks. Many institutions with such a policy report their fraud losses have dropped by half.

Banks lose nearly a half-billion dollars a year to check fraud and from $12 million to $100 million on ATM fraud, according to the American Bankers Association.

For all its gee-whiz novelty, Real Time Data's innovative box raises questions as to the role technology plays in our increasingly fly-by-wire society.

For many people, banks' policy of thumbprinting checks conjures images of being booked down at the precinct.

``People have a reaction to that because they associate it with criminal activity,'' says Kent Willis, director of the Virginia American Civil Liberties Union.

Willis fears that proliferation of the technology will mean one more bit of personal data the public must surrender to data warehousers.

``It's difficult to trust large corporations when they have information about us,'' says Willis. ``When that information is on computers, it's available to all sorts of individuals with criminal intent.''

The impetus for these technologies is the push for greater productivity, not Peeping-Toms, says Lisa Dvorchak, vice president of marketing for AIM-USA - a trade association for the automatic-data-collection and identification industry.

``Now that companies are `right-sized,' if they want to continue their economic growth they're going to have to keep finding even more ways to be efficient,'' says Dvorchak.

Sammons takes pains to point out that a logarithmic identifier - not the customer's print itself (see graphic) is stored in the credit union's database.

And ``it's virtually foolproof'' to fraud, Sammons says.

So, could a hacker steal that ``identifier'' code itself and use it for nefarious purposes?

``It's a possibility but highly improbable,'' he says.

Should use of the ``virtual'' branch take off, it's likely to mean even greater loss of jobs in the banking industry. The logic is simple - automated branches are cheaper to operate than brick-and-mortar buildings. In addition, they can be easily moved from unprofitable locations.

Although the Richmond Federal Credit Union machine had some initial kinks, ``it served its purpose,'' says Elise Woods, operations manager for the credit union.

``It was appealing to members, and some of them swear by it,'' Woods says.

Don't be surprised by installation of many more of these advanced teller machines, and continued reduction in bank payrolls.

``By the year 2000,'' says Sammons, ``it's estimated that another 500,000 jobs will leave the banking industry.''

But, he reasons, one worker's layoff is another's opportunity. Just look at the emergence of so-called ``Internet banks.''

``There's a big market evolving for self-service technology,'' predicts Sammons.

``You're going to see it everywhere in the next few years.'' ILLUSTRATION: Color photo

IAN MARTIN/The Virginian-Pilot

A small plastic scanner...

Graphic

KEN WRIGHT/The Virginian-Pilot

THE FUTURE OF BANKING?

[For complete graphic, please see microfilm]

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