The financial services industry is increasingly showing an interest in biometrics.
Apple Pay and iTouch have taken biometrics to the mass market, followed by leading manufacturers such as Samsung, LG and others. At the same time, real time authentication and identification through multibiometric platforms that use behavioural and voice biometrics, are rapidly being adopted to improve customer experience and reduce identity fraud. It is becoming increasingly important for the financial services industry to stay informed about current developments in biometric technologies and their deployments. A platform for information exchange about today’s use cases and technical advances would be welcomed.
Speed is of the essence
Paying in stores using a mobile phone is becoming more popular, but it still takes several steps to complete a purchase: taking out your mobile device, opening the payment app and entering a code. Checking out quickly is a priority for both consumers and retailers, as fast checkout means more efficiency. “Biometry is moving rapidly into the security ecosystem and its adoption in consumer devices will jumpstart this phenomenon,” says digital security research analyst Dimitrios Pavlakis. “Specifically, smartphone biometrics not only provides a secure solution for authentication, mobile payments and BYOD initiatives, but also enhances user experience, navigation, mobility, and versatility.”
According to ‘Bank Systems & Technology’, mobile payments will be “stuck in low gear until making a mobile payment becomes faster than using a credit card”. Biometrics promises to bring speed to the checkout process; whether by face, fingerprint, hand geometry, iris or voice recognition. The technology of biometric identification is maturing rapidly. Gartner even predicted that by 2016 30% of organisations will be using biometric authentication for access to mobile devices. According to a WorldPay survey almost half of all European consumers would like to see biometric payments emerge as an alternative payment technology.
Mobile devices need more security
It is important that the financial services industry further familiarises itself with biometric identification methods and applications by seeking guidance on how biometrics can help optimise key aspects of the banking and payment processes: customer interaction, operational efficiency and fraud prevention. There is a gradual shift from desktop/notebook computing towards smartphones, tablets and other more portable devices. Increased mobility makes these devices more suitable as a means of payment and this creates an opportunity for financial service providers. However, the added mobility also means that these devices are much more likely to end up in the wrong hands. This is where biometrics can play an important role.
The implementation of biometrics creates significant opportunities for the financial services industry. Biometrics can be used to improve processes and customer experience, while protecting the privacy of the users. Based on the new biometrics use cases that emerge on a regular basis, financial institutions are clearly seeing the benefits of biometric technology. Nowadays, many personalised, location independent services rely on biometrics. A good understanding of how biometrics impacts front-end and back-end processes and systems is a prerequisite for the design of successful deployments.
It is clear that biometrics can have a real impact on the financial services industry, but the effect of these implementations really depends on the underlying business cases. In order to progress as an industry, it is important that information is exchanged and experiences are shared from a business perspec-tive. This exchange should include important aspects such as process flows, implementation strategy, fraud reduction, added value and customer experience.
At the end of 2015, a series of three seminars entitled ‘Biometrics in Banking and Payments’ was held that was organised by the European Association for Biometrics. The seminars took place in three European financial capitals: Frankfurt, London and Amsterdam. There was considerable interest from banks to participate. In total 250 people from over 45 different banks and financial institutions participated, including representatives of Royal Bank of Scotland, Visa Europe, ING, ABN AMRO, Credit Suisse, Bank Santander, Deutsche Bank, Barclays, Lloyds Banking Group, Coventry Building Society, Banque Boursorama, Tesco Bank, Metro Bank, BarclayCard, Vanquis Bank, Lufthansa AirPlus Service-karten, Deutsche Bundesbank, BaFin, Bundesverband Volksbanken Raiffeisenbanken, the Bank of Tokyo-Mitsubishi, Rabobank, SNS Bank, Binck Bank and the Dutch Central Bank (DNB). This suggests that the topic is now hotter than ever.
Improving the user experience
During the seminars it became evident that biometric technologies are on their way to become an integral part of various identification and authentication processes within the financial services industry. There was an emphasis on increasing user convenience, while adding certainty about the identity of the user. In most cases biometrics is not presented as an identifier, but rather as a convenient tool to add the physical person to the chain of authentication tools in an environment that is otherwise fully digital. Illustrated by various case studies and demonstrations the happy marriage between biometrics and smart devices (such as mobile phones and cards) is creating a variety of innovative and user-friendly client experiences.
Following ING, Deutsche Bank has now also released its strategy for the use of biometrics in transaction authentication. It should be noted that the use cases and implemented solutions among financial institutions vary widely. Matters such as on-device or off-device processing, but also the biometric modality used are subject to specific choices and requirements. One may ask whether a consolidation is ahead of us or whether each of the various scenarios actually requires a specific solution.
In any case, banks, credit card companies and other financial service providers seem to have chosen flexibility by adapting to whatever the consumer prefers to use. This approach was most clearly demonstrated by keynote speaker Adrian Field from Visa Europe, who clearly considers technology a servant to the ever evolving consumer and business needs. ING’s presentation about their use of iTouch in mobile payment authentication was an ultimate demonstration of how traditional banks have adapted to the evolving environment of mobile transactions.
The question remains whether traditional banks will be able to keep up with newcomers such as Apple Pay and Samsung Pay and if so, what their strategies will be. If we have learned one thing from the seminars, it is that biometrics is unquestionably finding its way into the financial services industry by improving authentication and user experience.
1 Schaus, P. (2014). Biometrics: Mobile Payment’s Secret Weapon. Bank Systems & Technology.
2 Gartner Says 30 Percent of Organizations Will Use Biometric Authentication for Mobile Devices by 2016.
3 Europeans Eager To Use Biometric Payments.
Max Snijder is one of the leading independent biometrics experts in Europe. His expertise includes strategic aspects of biometric deployments, as well as issues on functional and operational requirements, use cases, processes and procedures. During his 15 years+ experience he has built up an in-depth knowledge of border control, national security, e-Passports, airport security, electronic services, access control and mobile security. Max has lectured at the NATO Centre of Excellence-Defence Against Terrorism (CoE-DAT) and is co-founder and Secretary of the European Association for Biometrics.