The Rise of Biometric Technology in FinTech
While mobile banking has vastly simplified how we interact with our finances, security measures are becoming more and more elaborate. To gain access to personal accounts and to verify transactions, users are needing to come up with increasingly complex text-based passwords and make use of multi-step verification processes using SMS codes, email verifications, and other inexpedient measures.
Not only that, current authentication methods are not that secure. Passwords can easily be hacked or surmised from personal data that is readily shared online and on social media. It’s also true that the 20 most common PIN combinations in the world represent over 25% of in-use four-digit passwords.
Going forward, FinTech companies are exploring ways to both simplify and improve security across the board. Industry leaders and experts continue to point to biometric technology as the ultimate solution for a convenient customer authentication flow within mobile banking, retail, and elsewhere.
What is Biometric technology?
Biometrics represents a vastly superior and secure method to authenticate users. In essence, biometric technology scans physiological characteristics, such as fingerprints, iris patterns, and facial features, which are then used to identify an individual. It is incredibly difficult to cheat biometric systems, as these security systems rely on the analysis of many data points linked to individual users, and often they come with anti-spoofing technology built in.
In FinTech, biometric technology is not only being used to authenticate individuals but also to expedite payments and transactions. Biometric data links users directly to their financial identities. This means that instead of using a credit card or cash, people can authorise payments with a simple fingerprint scan, for example. Beyond these so-called naked payment systems, voice biometrics are also becoming an increasingly popular authentication method, such as with voice-activated digital assistants like Amazon’s Alexa or Google Home
How Biometrics are improving mobile banking experiences
Here we explore major biometric trends which are being implemented to improve mobile banking and payment experiences:
Biometric authentication for payments
Recent years have seen biometric solutions flood the mobile payment space. This has been further fuelled by the COVID pandemic, where cashless and touchless forms of payment have become a must to curb the spread of the virus. Smartphone technology is being deployed for POS purchases, while ATMs are now beginning to use biometrics as a new form of authentication. Apple Pay, for example, has introduced mobile POS payments via smartphones, which use fingerprinting through its Apple TouchID biometric system. This increases security measures by verifying a user’s identity and simplifying the online and mobile process. Touch ID has slowly caught the attention of banks and other FinTech services, who are implementing similar systems in their mobile banking apps.
Biometrics for mobile banking
As more and more of our personal banking needs migrate to mobile devices, security remains a major issue. Smartphones can be easily lost, and pin numbers are easy to hack by more experienced fraudsters. Introducing biometric authentication within mobile banking apps is a great way to combine client convenience with financial security. Financial institutions are increasingly upgrading their mobile authentication strategies to replace PINs and passwords with biometrics, such as fingerprints or facial recognition patterns. The technology can be further developed to allow for users to digitally sign for any sensitive transactions, further increasing security without adding too many time-consuming protocols that slow down mobile banking.
Voice-controlled cloud-computing software
Since the launch of Apple’s Siri and Amazon’s Alexa, voice-controlled technology has become more ubiquitous in the world. Thousands of smart products, from smart phones to virtual assistant AI devices, already use this technology to great effect. The tech has proven to be such an unmitigated success with consumers, that voice-activated software is likely to continue to be integrated into more appliances and gadgets around our homes. Everything from smart locks, thermostats, and lights will soon be commonly activated by voice controls. In the retail space, this will extend to the ability to pay for goods and services using voice-activation software. Directly linking an individual’s voice with their personal banking account will result in a more seamless and convenient shopping experience, which will be incredibly difficult for fraudsters to cheat due to unique qualities of each individual voice.
More organisations, across a wide range of sectors, continue to look towards biometrics to improve their authentication processes. A mix of fingerprint, retina, voice, facial and heartbeat scans will help create fool-proof identification systems. This will be the key to great mobile banking and mobile payments experiences, with enhanced security, in the future.