Rise of biometrics in Financial Services
As the world becomes increasingly more digital, the number of passwords people have to manage is becoming a serious problem. Financial institutions need to investigate acceptable biometric alternatives for authenticating mobile banking users that balance both security and simplicity.
What is bio metrics?
Biometrics refers to metrics related to human characteristics. Biometrics authentication (or realistic authentication) is used in computer science as a form of identification and access control. It is also used to identify individuals in groups that are under surveillance.
What can biometrics be used for?
Examples of physiological characteristics used for biometric authentication include fingerprints; DNA; face, hand, retina or ear features; and odor. Behavioral characteristics are related to the pattern of the behavior of a person, such as typing rhythm, gait, gestures and voice
Why use biometrics for financial services?
- Improve service Reduce costs
- Enhance fraud detection – (External and Internal)
- Compliance with govt. regulations
- Strengthen proof of identity (POI) processes
- Better risk management
- Improved identity management
For financial institutions, one of the primary goals of digitization is to improve the simplicity of banking. In an effort to improve the user experience, one of the stumbling blocks has been the password authentication process needed to access mobile banking. Combining the need to improve the security of accessing accounts due to increased data breaches, with a desire for greater ease of use, is a difficult balancing act.
Recent Research Study:
According to a research study done by Telesign, 73% of adults in the US and UK use the same password for everything. In addition, more than half of consumers (54%) use five or fewer passwords across their entire online life, while 22% use just three or fewer. Finally, almost half (47%) of consumers rely on a password that hasn’t been changed for five years.
An Equifax-commissioned survey found a majority (56%) of respondents would like to use a biometric security method to log into to online banking over regular usernames and passwords, reports Finextra.
Digital bankers have major pent up demand to use fingerprint scanning.
- Fingerprint scanning is the most preferred way to authenticate. One in three respondents said they would prefer to use fingerprint scanning, like Apple’s TouchID technology, to log in to their financial accounts. Consumers preferring fingerprint scanning outnumbered those choosing regular user name name and passwords by a 14 percentage point margin, at 33% versus 19%.
- Despite its popularity, the majority of bank customers lack access to fingerprint scanning. Sixty-four percent of respondents with a bank account said that they were unable to access digital banking by scanning their fingerprint. Once factor behind the lack of availability is that many banks that lead in offering fingerprint scanning only support the feature on Apple iOS, finding the large number of devices to support on Android presents a greater development challenge.
- Tech providers lead banks in meeting customer demand. The three major technology provider mobile wallets, Android Pay, Apple Pay, and Samsung Pay, each already support fingerprint scanning to make purchases online and at the point-of-sale. Banks are increasingly finding themselves directly competing with mobile wallet providers, as more issuers release their own branded mobile wallets, like Wells Fargo Wallet, Chase Pay, or Citi Pay.