Improving Banking Experiences with Biometrics

Customers trust banks and financial institutions with sensitive information and expect robust protection. Biometrics helps balance security and convenience for a frictionless user experience.

A rapidly evolving technology, biometrics comes in different flavors. Visual biometrics encompass facial recognition, fingerprint, finger-vein, iris and retina recognition. There is also behavioral biometrics that includes dynamic signature verification, keystroke dynamics, and voice recognition.

While these biometrics modalities have their own drawbacks (like background noise for voice recognition or poor lighting conditions for facial recognition), biometric solutions that leverage the right modalities for the right purpose will enable banks and financial institutions to enhance customer experiences. Here’s how.

Seamless digital onboarding

A recent research by Fenergo reveals that banks could lose $22.75 bn in revenue to slow onboarding, and with the rise of fintech startups and challenger banks that offer digital-first banking experiences, traditional manual onboarding bogged down in time-consuming steps is no longer an option.

Biometrics-based authentication enables banks and financial institutions to significantly accelerate their due diligence and eKYC activities to deliver fast and frictionless onboarding experiences that take minutes, not hours. For customers, the process is really simple and even fun (for selfie lovers) — you just need to take a picture of yourself and let the bank match it to your government issued ID.

Traditional banks seem to follow the pack. NatWest has become the first major high street bank in the UK to debut account opening with a selfie. By using state-of-the-art AI, the bank performs biometric checks in real time to speed up onboarding and also decrease the amount of fraudulent applications.

Safer mobile banking

Invented decades ago, passwords now seem not that well-suited to our increasingly digitized lifestyle. An average user has to juggle too many PINs and passwords that often results in reusing the same “favorite” passcode across multiple services making a hacker’s job so much easier.

Unlike PINs or passwords, biometric identifiers are much harder to hack and impossible to lose since a user actually becomes the password. Also, financial institutions and banks incorporate biometrics into their mobile banking apps to enable safe authentication for customers to login into their accounts and perform banking transactions on the go.

Secure biometric payments

A recent PSD2 requirement, Strong Customer Authentication, came into force in 2019 with the objective to introduce multi-factor authentication for improved online payment security. Biometric technology helps support these requirements by moving from reliance on knowledge to inherence (meaning what a user is).

Fingerprints or facial recognition used as an additional layer of security can make online payments both safer and smoother by removing the friction from the checkout process.

Staying on the frontline of biometrics technology advancement, Mastercard has introduced its Mastercard Identity Check to enable customers to use biometric identifiers for seamless online payments. Its “selfie pay” app also supports fingerprints biometrics to offer its users a choice and relieving them from the need to remember yet another password.

Today, fingerprint authentication is moving from phone to credit cards. To enable truly biometric payments, Mastercard brings its biometric card to safely identify cardholders for POS transactions. The card leverages a chip and an embedded fingerprint sensor to quickly identify the cardholder, no password needed. With that, all biometric data resides on the card to comply with all privacy requirements.

Cardless ATM transactions

Withdrawing and depositing cash, paying bills, making transfers, and more — ATMs bring convenience to bank customers with easy, round-the-clock access to banking operations. However, ATM skimming emerges as one of the fastest-growing electronic crimes putting a heavy financial burden on a nation’s economy. In 2018, losses due to ATM-related fraud attacks amounted to almost 250 million euros.

To combat ATM skimmers and fraudsters, banks tap into the power of biometrics and equip their ATMs with fingerprint and vein pattern scanners to make sure that only authorized cardholder can access services. Japan’s Seven Bank is planning to introduce facial recognition capabilities to allow customers to open banking accounts on the spot.

To further boost customer experience with ATMs, biometrics technology can enable secure cash access without an actual card present. After signing into a mobile banking app, users can authenticate with on-device biometrics and initiate a transaction. This is what Mastercard and Diebold Nixdorf are collaborating on to raise the bar for banking experiences with cardless ATMs.

Biometric banking is the future

In today’s crowded banking marketplace, the most convenient experiences will have a competitive edge. Biometrics-based authentication not only significantly improves security but also makes it in a non-intrusive manner taking customer convenience to the next level.

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