<p> Biometrics is the science of measuring either physiological (i.e. fingerprint, iris) or behavioural (i.e. gait, signature) characteristics for the purpose of determining or authenticating one's identity. While there has been considerable research conducted with respect to the technical aspects of biometrics, very little attention has been paid to consumer acceptability of this technology. The research presented here is a first step towards filling that void.</p> <p> As such, a series of three studies were undertaken. The first study was a qualitative analysis that identified what avenues of exploration Canadian banks considered to be the most salient with respect to consumer perceptions of biometric authentication technology. This analysis consisted of semi-structured interviews with subject matter experts. The second study was also qualitative and asked consumers from across Canada what they perceived as potential benefits and concerns with biometric authentication technology being used to access their bank accounts. Based upon the results of these two studies, which were further informed by a review of technology adoption literature, a third quantitative study was carried out in which a proposed research model was tested. This model identified both contextual antecedents and innate traits that may influence consumer attitudes towards using biometrics to access their bank accounts via an automated teller machine (ATM). In addition, the aspects of control and voluntariness were manipulated, through the presentation of various scenarios, to examine their effects upon both attitude as well as the direct antecedents of privacy and security concerns and usefulness. The proposed model was assessed using structural equation modeling. In addition, ANOV As and qualitative answers to open ended questions were examined to provide further insight as to what will enhance or impede consumer acceptance of biometric technology.</p> <p> The findings suggest that the contextual factors of privacy and security concerns and usefulness have a bigger impact upon attitude as compared to innate personality traits. In addition, while voluntariness appears to have no effect, control has a significant impact upon attitude as well as privacy and security concerns and usefulness. Based upon these results, implications for theory and practice are discussed, and suggestions for future research are presented. It is hoped that this initial research spurs additional interest in examining consumer acceptability of biometrics in terms of both private and public sector applications.</p> / Thesis / Doctor of Philosophy (PhD)

The Canadian banking system has experienced significant changes over the last two decades. Deregulations allowed banks to generate revenue from non-traditional activities, and today fee-based income is as equally important as net interest income. The main objective of this thesis is to investigate how fee-based income affects a bank’s earnings volatility and its exposure to interest rate risk. We conduct empirical analysis of the annual fee-based income earned by the six largest Canadian banks (Royal Bank of Canada, Toronto-Dominion Bank, Canadian Imperial Bank of Commerce, Bank of Montreal, Bank of Nova Scotia, and National Bank of Canada) over the period from 1990 to 2012 inclusive. This analysis shows that almost all kinds of fee-based income generated by Canadian banks are highly dependent on the performance of the Canadian economy. In particular, we notice that the Canadian Gross Domestic Product (GDP) and oil prices significantly affect the revenues generated through fee-based activities. We also find a high positive correlation between fee-based income and net interest income. Additionally, we find that trading activity generates the most volatile income stream and eventually increases the volatility of bank earnings. We construct a Monte Carlo simulation model to analyze bank income under different possible economic scenarios. The Monte Carlo model simulates different types of banks that are common not only in Canada, but also around the world. In addition to net interest income, these hypothetical banks can generate three categories of fee-based income: traditional income, basic non-traditional income, and advanced non-traditional income. We also account for the costs associated with fee-based income in our analysis. Through simulations we find that a small change in the term structure of interest rates leads to insignificant changes in income at any type of bank, eliminating the need to hedge against interest rate risk. Moreover, even when interest rates are expected to move dramatically, banks have optimal balance sheet structures that minimize interest rate risk and optimize the volatility of income. Banks with sub-optimal balance sheet structures need to hedge in order to avoid financial distress. We find that hedging works equally well when a bank hedges its entire net income or just the net interest income component. Moreover, some sources of fee-based income can serve as a good hedging tool against the interest rate risk because they provide a steady income stream that could serve as a cushion for earnings. For example, traditional income and basic non-traditional income decrease risk per unit of return and help banks to stabilize revenues. However, advanced non-traditional income increases earnings volatility and might even lead a bank to financial distress.