S&P Global Ratings warns that banks in 2021 could face their toughest year since the aftermath of the global financial crisis. The ratings agency assigns a negative outlook for almost one third of global banks. “For many banking systems, we do not envisage recovery to pre-Covid-19 levels until 2023 or beyond,” say S&P analysts.
If your bank is looking for ways to protect your bottom line in the face of increasing uncertainty, you should consider biometrics. Deploying biometric identity verification across your banking platforms has a significant positive impact on your bottom line. From reducing costs to increasing sales, biometrics is paving the way for banks to undergo digital transformation.
Biometric identity verification uses behavioral or physical characteristics to identify whether a customer or employee is allowed access to devices, systems, or data. Biometric identifiers include facial patterns, fingerprints, voice intonation, and typing cadence.
With biometrics, retail banks keep sensitive data secure by ensuring that only authorized users are permitted to access it. Biometric identity verification systems improve security, speed up the verification process and deter cybercriminals.
Here are the top five ways that biometrics improves your bank’s bottom line.
1. Biometrics Makes Banking Transactions More Secure
Before fraudsters can steal from your bank, they must first steal an identity. Fraudulent ATM transactions and criminal online banking transactions are only possible when criminals have banking customer credentials in their possession. They typically get these credentials by stealing them, or by buying them from someone who has stolen them.
Today, these credentials are most commonly a banking card number and a PIN or password. The trouble is, criminals can easily steal these credentials through phishing emails and malware, exposing your bank to theft, fraud and bottom-line losses.
Biometric identity verification makes banking transactions more secure by adding another layer of security. For example, with facial recognition systems, instead of presenting a bank card number and PIN, customers must also present their face to a facial recognition system, typically in the form of a selfie that they take with their smartphone.
Today’s facial recognition engines use artificial intelligence, machine learning and liveness detection (both active and passive detection) to make it next to impossible for fraudsters to fool these systems with stolen identities, since stealing someone’s face is still fairly difficult to do.
2. Biometrics Enhances the Customer Experience
A growing number of banking customers are avoiding retail bank branches, and their actions have nothing to do with social distancing or lockdowns or COVID-19. Today’s banking customers, particularly the younger generation, prefer to do their banking online, often on their phones. Driving to a branch, finding a parking spot, and waiting in line for a teller to become available are foreign concepts to them.
Banking customers are now demanding that their banking experiences be as seamless, quick and painless as the experiences they have with other consumer-grade experiences, such as hailing an Uber ride, ordering curbside pick-up from McDonalds or watching the latest streaming movie on Netflix.
Biometric identity verification eliminates the friction so common with manual identity verification by letting bank customers identity themselves with their faces or their fingerprints. For example, banks are using technology like IDmission’s Biometric Identity Verification to identify customers in a split second, all from the customer’s phone. The process is frictionless, and Level 2 ISO-compliant.
The process relies on passive liveness detection, which requires no action from the customer, such as blinking, smiling or turning their head. Passive liveness detection is the key to improving the customer experience. It makes the identity verification process convenient, quick and seamless, while maintaining data security and integrity. In other words, it delivers the customer experience that bank customers are used to (and now expect) in other areas of their life.
3. Biometrics Increases Security Across All Access Control Points
If your bank has dozens or hundreds of branches, you know the challenge of employee access control. Large, multi-branch banks have critical and complex security requirements. After all, large numbers of employees routinely need to access multiple physical and logical systems. Your security is compromised anytime an employee loses their keycard, shares their password or gives away their login credentials during a phishing attack.
Biometric identity verification increases security across your entire enterprise and all access control points. It offers strong security that, along with passwords or key cards, enables a state-of-the-art, multi-factor authentication (MFA) system that is next to impossible to counterfeit or spoof.
IDmission, for example, provides a unique approach to MFA by adding a biometric layer to your current authentication process. Bank employees are required to present a keycard (something they have), a PIN (something they know), and a selfie (something they are, the biometric component). This biometric-enabled MFA ensures that employees have access to only the areas of your enterprise that they are authorized to access.
Better employee access control means fewer cases of identity theft and hacking. And that translates into fewer losses and a healthier bottom line.
4. Biometrics Increases Sales
There are essentially two ways to increase sales. 1. Acquire more new customers. 2. Get existing customers to conduct more transactions. Biometric identity authentication helps you do both.
Let’s start with how to increase sales by acquiring more customers. Last time we checked, almost 40% of potential new banking customers abandon traditional onboarding processes and head to a digital alternative provided by a competitor. Today’s bank customers want to access their accounts from any device, from any location, and at any time of the day or night. If your bank doesn’t offer this convenience and speed, your potential customers will go elsewhere.
Biometrics lowers your customer onboarding abandonment rate by making the process of identity verification quick, seamless and painless. Biometrics makes onboarding a new customer quick, easy and secure.
Now let’s talk about increasing sales from existing customers. Biometrics increases revenue from fees and interest by letting your customers choose their own experience (whether in-branch or virtual). When you let your customers bank the way that works for them, they do more of their banking with you. They pay bills, apply for loans, make purchases, send wire transfers, cash checks and plenty more—all enabled by the convenience, speed and security that biometrics provides.
An added bonus of biometrics is that satisfied customers remain customers. Biometrics reduces customer churn. Customers who enjoy the benefits that biometric identity verification offers continue doing their banking with your bank. The longer they remain with you, the more fee and interest income you generate. And the higher your lifetime customer value becomes.
5. Biometrics Reduces Overhead
Biometrics gives your bank the option of reducing your footprint. By giving your customers a convenient, quick and seamless way to do their banking online, you reduce your reliance on bank branches and all of the overhead that goes with them.
But going branchless is only possible when the alternative you offer your customers equals or rivals the in-branch experience in terms of services offered, speed of service, customer experience—and ease of customer identity verification.
Deploying biometric identity verification gives you options. You can let customers open mobile wallets through biometrics while remaining compliant with regulations. You can partner with small businesses to act as your agents. You can offer customers the convenience of making payments using QR codes. All of these options allow you to reduce your number of branches, and to remove that overhead from your balance sheets.
Reap the Benefits of Biometrics in Your Bank
One thing you can be sure about is that the world won’t look the same after the COVID-19 pandemic has passed. Customers are enjoying the convenience of banking from home on any device, day and night, and you can expect that trend to continue.
If your bank wants to stay relevant to tomorrow’s customers—and stay competitive against today’s rivals—you should deploy biometric identity verification across your enterprise. Biometrics improves your bottom line by making banking transactions more secure, enhancing the customer experience, increasing security across all access control points, increasing sales, and reducing overhead.
Leave a Comment