The Problem Biometric Authentication Solves for Financial Services
Both the frequency and impact of data breaches are rising, but this is especially apparent in the financial industry. In fact, the number of data breaches tracked in the United States in 2016 hit an all-time high, with an estimated 1.5 billion people affected. This increase in data breaches clearly demonstrates how antiquated existing identification security is. Passwords, PINs, and physical ID cards simply aren’t working.
Biometric authentication can help solve this growing problem by providing a simple solution for consumers and financial institutions alike that helps to reduce fraud, effectively authenticate customers, and authorize financial transactions. Acting as a strong authentication tool to help secure brick-and-mortar institutions, as well as ATM and online transactions, biometrics also helps to increase customer trust and improve reputation. Below are three key problems biometrics can solve for financial service firms.
Fraud Reduction
Biometric authentication allows financial firms independence from passwords, PINs, and hardware tokens, which are susceptible to attack. After all, passwords don’t prove who you are — they only prove you know something about the person you say you are. They can be easily cracked or stolen and used to fraudulently log into accounts.
Biometrics, however, are unique for every individual and difficult to spoof, which is why biometric authentication is already commonplace in many other industries and use-cases such as law enforcement and forensic studies. In a world where hackers are becoming increasingly sophisticated, biometrics allows financial institutions to prove, beyond a doubt, who is requesting access.
Convenient Authentication
Financial service firms need better security, but it needs to be convenient to the consumer. This is where biometrics comes in — biometrics are convenient. Gone are the days of remembering passwords and speaking with a help desk representative to reset passwords. Using biometrics, financial service firms can verify a customer through several methods.
However, the savviest of institutions have learned that, to be successful, different applications require different biometric modalities. I have seen voice recognition used to secure the contact center channel, fingerprints for contactless mobile payments, facial recognition for remote customer registration, and iris used for digital payment authorization. Each method serves as a convenient, frictionless solution to customer authentication.
Secure Mobile Payments
The mobile industry is constantly evolving, and no trend highlights this better than the innovations occurring in mobile banking. However, the biggest challenge facing companies is how to secure user data and financial transactions. I’m a firm supporter of biometrics over other authentication mechanisms because of its unique ability to work across a wide-range of financial channels.
For example, a hardware token may work for authenticating a customer into a web-based banking service whilst that customer is at home, but it fails when that same customer is checking their balance on their smartphone at work. Hard and soft tokens have also caused headaches for employees, as they must type in a long string of numbers and are required to carry those numbers without losing them. This can be solved with a scalable biometric authentication platform linked to a mobile biometric SDK that can leverage multiple biometric modalities. A one-stop authentication solution for financial services that supports customer authentication in all of its channels, matching the right biometric technology to context and the risk.
Due to the increase in data breaches and banking and the role customer trust and loyalty in the success of banks plays, financial service firms should continue to search for ways to adopt biometrics. When integrated with an existing security system, biometric technology can ensure financial service firms have the highest level of authentication security possible.
