Biometrics – which uses behavioral or physiological characteristics to identify an individual – isn’t a new concept to consumers anymore. People across the world have become accustomed to using facial recognition or fingerprints to unlock mobile devices and fingerprint scanners when making purchases. This technology also offers the ability to improve security across many business fields, particularly banking.
Over time, the banking industry has continued to replace traditional systems with biometric systems, with many financial institutions embracing or currently adopting biometric identification technology. The rapid digitization of the industry along with the continued need to use stricter employee and customer identification protocols to prevent fraud and identity theft has laid the groundwork for biometric identification to become a strategic, integral part of banking securing platforms across the world.
Biometrics in banking, which offers a strong authentication tool that helps secure online, in-person, and ATM transactions, boosts brand reputation, and improves customer trust. Banks are already adopting technology that uses biometric information to ensure transactions are more secure while enhancing the customer experience.
Banks are already using biometrics when customers:
And from onboarding to everyday transactions, biometric authentication offers many benefits. Here’s a closer look at biometrics in banking, some of the challenges faced by the banking industry, and why banks consistently turn to biometrics as they move into the future of banking.
Today, we have a need for end to end banking. With the emergence of “fintech” in the past decade, bank processes have changed significantly. Times are changing, which means your bank must change, too. Unfortunately, as technology continues to progress, the banking industry faces some unique challenges.
Every industry today – banking included – is facing the challenge of serving and satisfying its members. It’s all about offering the best possible customer experience. Customers have choices today when choosing their banking provider, and they’re looking for a modern, streamlined banking experience. If you’re unable to provide that, expect your customers to go elsewhere.
Passwords and requiring authentication with text messages or phone calls are old-school for most consumers, and they want a more streamlined experience that lets them access their banking information quickly while ensuring their money is secure.
As more banks take a digital approach to banking, it’s critical to ensure you’re staying competitive. As your competitors begin using biometrics in banking practices, you’ll need to do the same thing to compete.
Managing costs is also a challenge for banking institutions. Network security and data breaches cost banks millions. A recent survey done by ACI Worldwide found that 44% of customer financial accounts have been compromised, and around 15% of those breaches result in fraud. And these breaches can cost your institution, with a Ponemon Institute Survey reporting that these incidents cost $9.4 million on average.
Every two seconds, there’s an instance of identity theft, according to a study by Javelin Strategy. Through the years, the incidence of identity theft continues to rise as fraudsters continue to get more tech-savvy, too. In fact, in 2019, Statista notes that data breaches saw an increase of 17%. Those are scary numbers for your bank and for your customers. You can’t afford to let your customers be at risk.
Reducing risks for your banking institution and for customers is one of the biggest challenges banks face right now. Despite the emergence of biometric identification technologies, breaches continue to happen, which is why banks must take greater steps to ensure the safety of their customers and their information.
Last, banks also face the challenge of trying to integrate new technologies with legacy technology. Legacy technology is usually dated or older technology. Technology changes at an astounding pace these days, and it’s difficult to find systems to integrate with older technology.
From satisfying customers to reducing risks, the banking industry faces many challenges. In response to those challenges, banks are turning to biometric authentication. But why are banks turning to biometrics?
One reason banks are turning to biometrics is to have virtual onboarding capabilities. The world has changed with the Covid-19 pandemic, and as the pandemic continues, the world has had to adapt. Virtual onboarding has become the norm in the banking industry and other industries as we all adjust to social distancing to prevent the spread of the coronavirus.
Experian recently conducted a survey and found that 61% of people believe that biometric identification is as secure or even more secure than using password systems. And not only do customers like that biometric technology is secure, but it’s fast, too.
Banks find that using biometrics in banking gives them the ability to quickly authenticate banking customers. Biometric systems quickly provide full visibility in customer accounts, and there are no instances of duplication to worry about with a quality system in place.
Another benefit of turning to biometrics is that biometrics helps keep personal information from being compromised by unwarranted users, preventing fraud. Biometric authentication is one of the most effective methods of authentication, and it keeps banking customers’ information protected.
Beyond protecting the identity of your customers when they’re using banking services, biometric technology can also prevent insider fraud. Biometrics allows your banking institution to establish secure employee authentication, improved accountability, and an audit trail of every transaction that’s done by employees.
Speaking of leaving an audit trail – using biometrics also allows you to track and monitor customer activity with an audit trail as well. Biometric technology solutions allow you to see customer activity within the system, so you’re alerted if there’s a problem with customer activity that may indicate fraud.
Banks are also turning to biometrics in order to adhere to ISO Compliance Standards. Biometrics must go through certain pieces of compliance before they’re deemed ISO compliant. Why is it so important to be ISO compliant? ISO compliance can reduce the occurrence of fraud by up to 90%.
Since the first time Apple launched Touch ID and then Samsung introduced a fingerprint scanner on mobile devices, biometric authentication has proven to be successful with consumers. Although biometrics has been widely adopted across many business and government sectors, the banking industry has been a bit slow to begin adopting biometric identification measures. However more banking institutions are realizing that biometric technology is the future of banking, offering the ability to protect customers while improving the overall customer experience.
When you choose IDmission, there’s no need to install new hardware in order to authenticate your customers. Customers have the ability to identify themselves securely via their mobile devices. It’s that easy to begin using biometric identity technology for your banking institution. And when you do, you’ll enjoy the benefits of virtual onboarding, a streamlined user experience, greater customer satisfaction, adherence to ISO compliance standards, and reduced fraud.