A novel Template Updating system for fingerprint verification systems used in mobile applications is introduced in the paper. Based on the proposed method, the system performance is improved much more than the original one. Not only the FRR (False Reject Rate) but also the small overlap problem caused by the very narrow sensor on the mobile phone are solved. Based on the template updating system, templates are replaced with matched inputs towards a target structure which can expand the coverage of templates with large displacement and rotation. By using the test database, the system performance shows the FRR can be reduced by 79% in comparison with the one without template updating procedure. This system was adopted in practical mobile phones in the commercial market in 2009.