An industry group recently launched a project to analyse how biometrics could strengthen customer identification and help prevent fraud in the banking industry.

The Financial Services Technology Consortium's (FSTC) biometrics initiative aims to provide banks with a better understanding of the current state of biometrics and how the technology could make it harder for fraudsters to steal someone's identity or take over accounts.

The project will look at the various types of biometrics, their cost and performance, and what applications they could best be applied to, Schutzer said.

The technology will also be studied intensively for its use online, in call centers and in retail branches.

Dan Schutzer, FSTC executive director, said a number of banks are currently piloting biometrics but cost and maturity concerns have been holding banks back from actually deploying biometrics.

Mark Diodati, a senior analyst for identity management and information security at Burton Group, said U.S. banks have steered clear of biometrics.

Not only will a biometrics system require the installation of software, it also will likely mean hardware troubleshooting in order to work, he said.

Iris scanning has some potential for ATM use, but banks are still a long way from deploying it, Diodati said.

Banks are also reluctant to use biometrics internally, favoring either one-time password devices or smart cards for employee authentication, Diodati said.