2011 CIO 100: How Three Companies Are Using IT to Rethink Consumer Services

These 2011 CIO 100 winners applied biometrics, iPod Touches and networking technology to revamp how they deliver core services to customers

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Security Moving money from a personal investment account can be a complex process involving trips to the bank, fees and paper forms designed to ensure compliance with regulations. And it can be full of stress, because such transactions often occur during a life milestone, such as retirement.

The Vanguard Group, which offers consumers retirement, college savings and other investment accounts, has simplified this multistep transaction process using biometric voice-verification software. The project, which earned a CIO 100 Award, lets customers access their accounts and complete transactions over the phone, using their voices as passwords. “The ultimate security measure is something you are,” says Vanguard CIO Paul Heller. “Voice is actually the most secure” form of identification, he adds, because each person’s voiceprint is unique.

John Marcante, an executive with Vanguard’s retail services group, says transactions that once took three weeks can now be completed in three minutes. Previously, Vanguard employees would scan and verify paperwork for 96 types of transactions. That process requires a phone conversation. Now 70 percent of transactions can be completed using biometric authentication.

The system uses software from Nuance that captures individuals’ vocal inflections and other details, making it more secure than a plain recording. To enroll in the service, customers call Vanguard’s 800 number and record the phrase, “At Vanguard, my voice is my password.” The verification system captures three voice samples and sends the customer a confirmation email. When the customer clicks on the link in the email, the service is activated. The process takes about a minute. The service is available on mobile or landline telecommunications networks, though Vanguard hopes to offer it for VoIP calls as well.

Vanguard is rolling out the verification system to its high-net-worth customers this year and will offer it to all customers in 2012. Marcante says teamwork between IT and business leaders made the project successful. Vanguard had tested biometrics a decade ago, but the disconnect between IT, research and business leaders was too great for the project to move forward. Marcante says this time, Vanguard realized that “innovation comes from an overlap of multiple disciplines.”

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