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The Role of Biometrics in Banking
By Paco Garcia
In every business, there is a constant pressure to maintain a competitive level of customer experience and price. That pressure changes as markets and technologies mature or advance. Banks are currently under a lot of pressure from their younger audience to offer more digital services. As banks gear up for this, we’ve seen a dramatic increase in branch closures – according to Which?, more than 1,000 branches have closed in the past two years, and just recently HSBC announced it would be closing 62 UK branches this year as it continues to invest in digital banking.
Brands looking to win the digital banking race will be asking themselves how they can keep their customers secure in a way that doesn’t negatively impact user experience. For many, the answer involves biometrics, and some are already turning to biometric technology to drive innovation in a crowded market. Many financial institutions are using the latest technologies to develop next-generation identification methods to battle fraud, improve the customer experience, and crucially, strengthen weak points in their security.
HSBC and Lloyds have announced that they will use biometrics in the UK, and MasterCard announced that it will be offering selfie authentication in the future. We still don’t know how successful these schemes will be, but most early signs look positive; MasterCard claims that 92% of test subjects favoured the new system over passwords. There is great appeal in not having to recall usernames and passwords for every different website and service you use. According to Intel Security the average person has 27 online accounts, so any alternative to remembering multiple logins will be attractive, and I believe consumers like the ease and simplicity that biometric technology can offer.
It’s not just the ease and convenience which appeal to consumers though. Research from Experian reveals that one in three believe biometric identification is either just as secure, or more secure, than the traditional system of passwords. For the banks who use biometrics, they will be able to offer layered authentication in a consumer friendly fashion. Different biometrics can be used to aid different interactions, including account creation, payments, and withdrawals; allowing the scope of digital banking to increase. So along with convenience, biometrics also offer identity protection, and stronger security for businesses and consumers alike.
Biometrics also make companies more secure as they don’t have to rely on transferable credentials. Transferable permits such as cryptographic keys, passwords and PINs are always going to have the same problem: they can be alienated from the person that is granted access to a particular device or system. It may be fairly easy for a cybercriminal to lie about their identity or try and use someone else’s ID document, but as it stands today, imitating a fingerprint or iris pattern is very difficult. By combining a cryptographic key, good biometric technology with strong anti-spoofing measures, and a strong authentication vector, companies have an incredibly secure and robust 3-factor authentication method.
Biometrics are helping many organisations, not just financial institutions, strengthen any weak points in their security. As biometrics continue to develop, and grow in popularity with both consumers and businesses, it’s safe to say that biometric technology is no longer a gimmick but a key security tool in today’s world.
The author, Paco Garcia, is the CTO of Yoti, a Global Cyber Alliance partner. You can follow them on Twitter @getyoti.
Editor’s Note: The views expressed by the author are not necessarily those of the Global Cyber Alliance.
