China’s central bank is putting the brakes on efforts to replace in-person bank account creation with authentication based on facial recognition, according to a Caixin Online article by Zhang Yuzhe and Wang Yuqian. Through an official, the central bank has indicated that it won’t permit the practice until the technology can be proven reliable for such a purpose.
Moreover, the official said “it is hard to set a timetable for this,” indicating that such a move certainly wouldn’t be imminent. As such, Chinese banks will continue to be required to maintain the practice of having customers open new accounts in person. According to the article, a Ministry of Public Security official indicated that the central bank’s concerns revolve around the transmission of biometric data, with an academic at Peking University echoing concerns about such systems being “very vulnerable to hacker interception and duplication.”
It is perhaps a minor setback for organizations like Ant Financial Services Group, which is trying to pioneer the use of facial recognition technology in securing payments for its Alipay mobile payment platform; it certainly doesn’t help their case to have such a restriction on the practice. But the central bank hasn’t given any indication that such biometric authentication can’t be used for mobile transactions undertaken by individuals who already have bank accounts. And given that a number of foreign-based competitors poised to launch in China this year already use biometric authentication for their own mPayment platforms, it seems unlikely that Chinese officials would go ahead with any further restrictions with respect to such technologies.
May 27, 2015 – by Alex Perala