Rob Katz

From Prodem to Citibank: Biometric ATMs

Man at ATM - IndiaThe Financial Times reported Friday that Citigroup, the world’s largest financial firm, will roll out a network of biometric ATMs to better serve low-income Indian neighborhoods. The machines will use thumbprint recognition technology in place of personal identification numbers, and color-coded instructions will be delivered by voiceover to serve the needs of illiterate customers.

Sound familiar? It should–Bolivia’s PRODEM rolled out a network of similar machines starting in 1999, as we documented in a What Works case study written by Roberto Hernandez and Yerina Mugica. In the 2003 study, the authors describe how PRODEM’s locally-designed machines work:
The smart card stores the customer’s relevant information including name, account number, account balance, five most recent transactions, and digital fingerprint. When customers approach a PRODEM FFP Smart ATM, they receive audio instructions…[they are] instructed to insert their smart card and place their finger on the fingerprint recognition device…The system reads the smart card and matches each customer’s fingerprint with the image stored on the card to authorize transactions. The touch screen display is color-coded to ensure that the customer can follow the verbal instructions (blue button for withdrawals, yellow for account inquiries).
The Financial Times reports that Citi’s “machines will recognise account holders’ thumbprints, eliminating the need for a personal identification number, and will have colour-coded screen instructions and voiceovers to help guide them through transactions.”
Short of asking Citigroup, there’s no way of knowing whether this is just a coincidence, or if they used PRODEM as a starting point. It sure sounds like Citigroup did their homework, though, and that a successful model piloted by a NGO-turned-bank (PRODEM) will now be part of a financial giant’s BOP strategy.

The article also notes that this project is not part of Citi’s Corporate Social Responsibility department:
Citigroup’s scheme aimed to make a profit but he gave no timeframe. “It’s not a philanthropic exercise…for it to be sustainable, we should break even and make a little bit of money.”
I’m excited to see this happening. Citi is a leader–if not the leader–in the financial services industry; this BOP play will encourage its competition to explore similar projects in emerging markets just to keep up. Furthermore, it appears that they’ve done their homework, exploring successful models in other markets and understanding the unique demands of their target customer. Maybe they even read the case study. While these ATMs will not be the BOP solution for the vast majority of India’s BOP–who live in rural villages without power or connectivity essential to ATM operations–this project signals Citigroup’s intention to compete with large national companies like ICICI Bank to capture the lucrative, untapped BOP markets. And as more companies compete to win BOP customers, prices should drop and service should improve. We’ll keep an eye on Citigroup’s progress and try to report back as we learn more.

(HT: Patrick Donohue)