To protect sensitive information and improve user experience, financial institutions require a secure authentication solution, such as biometrics in digital banking. Passwords, PINs, and OTPs are easily forgotten, stolen, or compromised by knowledge-based authentication techniques. Microsoft disclosed that weak passwords exposed 44 million user accounts to account takeover. According to Google, the majority of users duplicate passwords across different sites, leaving them exposed.
As a result, biometric verification for bank accounts is becoming an increasingly important component of financial industry security platforms. Biometrics enables strong and dependable authentication for ATM, in-store, and online transactions. It contributes to increased client trust in banks and the brand reputation of financial organizations.
According to a Visa poll, 65% of consumers are more comfortable utilizing biometrics in banking to protect their payment data, effectively ruling out traditional security techniques. The need for strong identification verification as transactional technologies become more widely used has made biometric use in banking critical for financial organizations.
What is Biometrics in Digital Banking?
Biometric authentication is quickly becoming a standard in the banking industry due to its ability to provide more secure identification verification methods. To verify the user, this technology employs physical features such as face recognition, fingerprint scanning, voice recognition, and retina recognition.
The biometrics authentication industry is now dominated by banking applications such as mobile banking, internet banking, ATMs, and even in-branch banking. According to Juniper Research, mobile biometrics will handle about $2 trillion in in-store and remote payments annually by the end of 2023, which is 17 times higher than the $124 billion projected in 2018. Traditional security approaches, in addition to modern transactional technologies that address chronic fraud concerns, are no longer enough; hence, biometric technology in banking systems is critical for defending against data breaches and other threats.
Benefits of Biometrics in Digital Banking
Biometric verification for bank accounts is quickly becoming a standard practice in the banking and FinTech industries since it provides more security and convenience than older techniques. Consider the following significant advantages:
Biometric authentication in mobile banking applications offers a safe and dependable method of banking on the go. This strategy is a welcome improvement over usernames and PINs since it provides additional security against fraud or unauthorized access attempts. Furthermore, biometric features are hard to replicate digitally, resulting in a more secure environment for customers’ bank accounts.
Customers prefer biometric authentication in mobile banking over traditional passwords and physical security keys. Customers may instead use their fingerprints, face identification, or voice recognition to swiftly and easily access their accounts. This eliminates the need to memorize complex passwords or the dangers of misplacing physical security keys.
More Prominent Operating Efficiency
In terms of time savings, biometric usage in banking techniques can provide a significant benefit to clients when compared to traditional banking operations. Furthermore, banks that use various forms of identification can eliminate the need for human assessments and investigations, enhancing operating efficiency.
In banking, biometric technology provides strong security against fraudulent actions such as identity theft and account takeover. It detects anomalies in user behavior or biometric features that might suggest malicious intent. When banks are notified of such incidents, they may move quickly to reduce any possible financial damage.
Biometric Authentication Methods in Digital Banking
To implement biometric security in your firm, you must gather unique biometrics data. Biometric banking is classified into three types: morphological (body structures), biological (genetic and molecular features), and behavioral (habits). Morphological biometrics include fingerprint or facial shape recognition, and biological biometrics include DNA and blood. Voice recognition is an increasingly prevalent way for behavioral biometric technology in banking for financial organizations nowadays. It should be noted that morphological qualities such as fingerprints or face scans are commonly used in bank verifications and identifications. Banks also frequently employ finger/palm vein readers and iris scanners.
How Does Biometrics in Banking Work?
Digital identity authentication and authorization are possible with modern biometric security systems. They are driven by specialized software that processes acquired data and makes use of specialist scanners, which can be tiny or huge depending on the type of data requested.
A scanner gathers biometric information, transforms it into a digital representation, and compares it to an existing database to begin the process. If the samples match, the user is permitted access; otherwise, access is refused or the relevant notification for a system operator is presented. Passwords are rendered obsolete with the introduction of biometric security solutions.
In summary, effective biometric system implementation consists of three steps: enrollment (gathering identifying data), storage (protection from unauthorized users), and comparison (verifying client identification). Biometrics have significantly increased the safety of banking operations while also making them more easy for clients.
Biometric Authentication in the Financial Sector
Organizations or individuals interested in using biometric security solutions must first establish which data pieces are critical to their strategy. Because not all biometric identifiers are equally simple to collect and process, there are a few important factors to consider while making this decision:
Banks such as Bank of America have used this form of identification in their Android and iOS banking apps. Consumers are already used to unlocking their cellphones with their fingerprints and completing online purchases with biometric fingerprint payment systems, so it’s only logical that they’d feel at ease utilizing comparable technology to conduct financial transactions in the banking sector.
Fingerprint scanners are becoming more popular in locations such as Poland, where 2000 ATMs in bank branches and supermarkets employ finger vein recognition technology, and in several Japanese banks for access control of safety deposit boxes within branches. More firms will likely use fingerprint authentication systems on mobile devices and physical sites in the near future.
The financial industry is increasingly interested in incorporating facial recognition technology into its banking systems. Customers may sign up for selfies banking,’ which has been accessible since 2016, by just taking a selfie. It compares to the image on their government-issued ID; clients do not need to visit a real branch of a bank. AI-enabled banking technology backed up by dependable biometrics gives both ease and security.
Furthermore, this technology may be utilized in online transactions, such as Apple Pay, Selfie Pay, and AliPay, which provide face biometric verification in online banking for increased security. Back in 2015, USAA was the first large bank to use face biometrics. Facial recognition software is becoming increasingly used in the banking sector across numerous platforms.
Voice recognition is a fast-evolving technology that has a wide range of potential benefits for customers. Speech modulation, accent, tones, and frequency are assessed using AI and machine learning to build a voice print–a reference template used for client identification. Customers can use voiceprints to substitute passwords or PINs for further protection.
According to research, $8 billion in digital voice assistants will be deployed globally by 2023, with more than $80 billion spent on voice commerce prospects. Voice recognition was initially used in banking in 2014, and it is currently rapidly gaining popularity in consumer electronics, medical diagnostics, and financial services.
In terms of security, voice biometrics are fundamentally different from passwords. Voiceprints, unlike plain text passwords, are saved in an encrypted manner, making them difficult to interpret even if someone has access to them. Furthermore, every time a fraudster interacts with the voice-activated IVR system, their speech is recorded, allowing for accurate identification and the prevention of future unauthorized attempts.
Biometric iris scanning is a popular identification verification approach that uses the different patterns in people’s irises to identify them. It is known for its dependability, precision, and complete security. Traditional authentication systems based on passwords, pins, and other knowledge-based approaches are subject to hacking; however, iris scanning provides far more confidentiality protection.
Previously used largely in airports for security screening, iris scanning is now becoming more common, with various systems installed at ATMs in the financial sector, including Bank of America and the National Bank of Qatar. Furthermore, several nations deploy technology to facilitate border crossings without the usage of passwords.
Static (offline) or dynamic (online) processing is the most prevalent type of signature recognition. Capturing a handwritten signature as a visual picture and comparing it to an existing copy is what static recognition is all about. When a touchscreen device gives a signature, dynamic processing captures data on time, rhythm, pressure, and other parameters.
Biometric scanning using the most recent finger geometry devices gathers comprehensive information such as shape, surface, length, breadth, thickness, and distance between fingers. To capture every detail, cutting-edge three-dimensional imaging is employed.
Gait is an individual locomotion pattern that is defined by body size, movement speed, stride length and width, angles, and other detectable aspects. Biometric identity systems, sports science, medical diagnosis and research, and many more sectors use gait-based authentication. These characteristics are analyzed by high-accuracy gait recognition cameras to produce trustworthy verification findings.
Use Cases Of Biometrics In Digital Banking
Biometrics are increasingly being used in banking to authenticate consumers and safeguard their assets. It may be used instead of passwords, tokens, signatures, and PINs in-branch services via mobile banking and ATMs. Implementing biometric authentication in banking measures benefits banks by improving client service while increasing security. Here are some examples of biometric applications in banking.
Biometric technology can help financial institutions expedite their customer onboarding process. Customers are frequently required to undergo Know Your Customer (KYC) verification in person, which requires them to visit a branch and provide documentation, which might take days or weeks. Customers anticipate convenience at all times, thanks to technological improvements that allow systems to provide simplified services. Biometrics in banking, such as face recognition, provide dependability and security while allowing banks to reduce the time spent onboarding customers.
Biometrics in banking ATMs has gained popularity in a number of industrialized nations, with PINs and biometric features such as faces and fingerprints being the two most prevalent authentication methods. This is owing to their use in ATM systems, where they provide ease, and accuracy, and are space-efficient. As a result, it’s no surprise that more banks are incorporating biometrics into their ATMs.
Mobile banking solutions are becoming increasingly popular. According to research, 79% of smartphone owners have used their smartphones for online purchases in the last year, with 70% of millennials especially using mobile banking. Despite this, there is still a lack of security on these platforms due to an increase in fraud incidents since 2015. To overcome this, internet banking can use facial biometric verification to get access to banking services such as KYC monitoring and transaction identification. Banks must preserve the security of consumer data by implementing modern technology from reputable sources, making biometric authentication in banking an effective safeguard.
Security Risks Involved in Using Biometrics
Biometrics in financial systems provide more security than traditional authentication techniques, although vulnerabilities exist. Attackers are skilled at developing ways to fool biometric scanning technologies, such as generating 3D models of persons from social media images and using deep fakes. Furthermore, the software that powers biometric devices creates and maintains sensitive user data, thus further precautions, such as using cloud computing for banking, should be made to safeguard it. When US government systems were hacked in 2015, the fingerprints of 5.6 million employees were taken. As a consequence, combining biometric technology with other types of verification is an excellent strategy.
How to Enhance the Security of Biometric Technology?
Vulnerability is an issue that must be addressed in biometric security systems. Fortunately, there are dependable methods for protecting against breaches and fraud. These include demanding various forms of authentication, storing data on the cloud, and engaging an expert AI software development services firm. Combining iris scans with fingerprints is sometimes a suitable option for maximum protection. Furthermore, collaborating with a supplier who stores and encrypts data in the cloud will prevent illegal access. Finally, hiring people that specialize in this sort of job may considerably decrease the likelihood of errors.
Biometrics is a cutting-edge field of study that has the potential to revolutionize the banking and finance industries in the near future. Biometrics in digital banking can be an efficient answer if you’re seeking for new ways to assist your consumers in verifying their identification swiftly and securely. Appic Softwares top-notch financial software development services have helped a wide range of clients, from startups to major international institutions.
Significant technological skill is required to implement such a system. Appic Softwares offers specialized, tailor-made solutions to facilitate the successful incorporation of biometric technology into existing business models.
So, what are you waiting for?