The world is changing day by day with the explosive use of FinTech not only in personal lives but also in businesses. The rise of biometrics in healthcare and biometrics in cars is a positive sign that biometric technology will be huge in the near future. The rapid growth of mobile devices and services, such as mobile payments, is forcing the bank industry to go digital for timely adaptation to the current situation. In the digital banking industry, improving security is one of the priority tasks to keep user’s information and assets safe from fraud and cybercriminals. Banks have developed several highly effective methods to improve digital banks’ security, and one of which is biometric technology for identification and reducing the time of transactions. Biometric technology is applied in many banking systems, especially during the COVID-19 pandemic when physical contacts are limited. So, to minimize losses and improve security, the banking industry has moved away from traditional verifications such as passwords or PINs to biometric technology with cutting-edge authentications (face, fingerprint, voice recognition technology) as the majority of users approach banking services through the Internet or smartphones. Let’s find out what biometric technology is and how the banking industry is beneficial from it.
1. What is Biometric Technology?
Traditional methods of identification, such as passwords or PINs, contain potential risks of counterfeiting. Additionally, forgetting passwords or usernames often happens with a majority of users, while the process of verifying users’ identity again and recovering passwords is time-consuming and complicated. To solve these problems, the banking industry is now using biometric technology for a better user experience when making transactions and verifying identity. According to GlobalData, 67% of global customers would be satisfied with the use of biometric technology to secure payment details.
Mobile Biometrics has been used widely since Apple introduced the Touch ID and Face ID features. Then, this technology becomes more and more popular with a majority of smartphone users. Biometric technology is a proper solution for users who have to remember a variety of passwords from different bank accounts since passwords should be complex and random to be more secure. However, with biometric technology, your physical features such as voice, fingerprints, or facial characteristics will be scanned for identification. These features can be congenital (eye shape and color) or ones that can change through time (voice, handwriting). Since physical characteristics with anti-spoofing technology are hard to mimic and counterfeit, biometric technology provides a higher level of security than traditional ones. Additionally, biometrics technology is not only used for authentication but also for executing transactions. Here are some use cases of biometric technology in the digital banking industry:
- Opening a bank account
- Making transactions without cards in ATM
- Online banking through smartphones or computers
As biometric data is integrated into banking systems, therefore, users can make payments by scanning fingerprints or faces instead of using physical cards with passwords. It provides extreme convenience when users can execute such fast transactions without remembering complex passwords. Currently, many banks have applied biometric technology, which is mostly fingerprint) as an alternative way of identification besides passwords.
2. Types of Biometric Technology
There are a variety of biometric types, however, this article will list the most common types used to enhance security and identification processes in the digital banking industry.
a. Fingerprint Recognition
Fingerprints are one of the most common types of biometric technology that is embedded in smartphones and other devices. The reason why the majority of the industry, including digital banking, apply fingerprint recognition into their systems is that every person has different fingerprint patterns, even twins. This genetic feature makes fingerprints reliable and difficult to copy. Normally, the biometric software works by determining minutiae points of fingerprints, then scanning its attributes such as orientation, arches, loops, swirls, ridges, or even pores. These feature data are stored in the software system to verify an individual’s identity next time.
Users of banks are beneficial from the universal usage of Biometric Fingerprint Technology, which offers great convenience and security. Unlike password or identity cards, fingerprints are a part of your body so it can not be forgotten or missed. Due to the security regulation of several banks, users have to change their passwords periodically, usually every 3 months. So, instead of struggling with the latest passwords, digital banks that integrate fingerprint recognition systems with an easy setting process will improve convenience along with the user’s experience. Due to affordable cost, biometric fingerprint technology is widely applied in almost every bank. Banks don't have to spend the expensive expense to build a software system that contains large storage for storing a large number of fingerprint patterns and several secure layers to ensure that data can not be leaked or stolen.
b. Voice Identification
With the boom of voice assistants such as SIRI by Apple, Cortana by Microsoft, Voice Recognition has become popular in various industries, and the banking sector is not an exception. Voice identification relies on unique characteristics of an individual voice such as tone, pronunciation habits, and audio quality to distinguish an individual from others. The voice identification systems first will capture the voice of their employees or customers from a normal conversation so that they don’t need to spend time reading available phrases.
With this technology, you can make orders, transactions, check attendance, or log in to bank accounts by using your voice only, without stopping what you are doing.
Voice Recognition is a right-hand assistant for multi-tasking people and helps them to save time when doing bank-related activities. Another reason why voice identification should be universally applied in every industry, including the banking sector, is that it brings convenience to a group of disabled people, who are unable to type and use computers. Similar to fingerprints, it is hard to cheat biometric software systems with fake voices as the process of verifying a voice of a person is based on several and complex characteristics. However, voice biometric technology can not identify your voice if field noise is recorded at the same time. Moreover, several factors that change one's voice temporarily or permanently such as age, health condition, respiratory diseases caused by smoking tobacco, or air pollution, can lead to false authentication. Then, an effective voice recognition system requires users to set ones’ voice periodically, once in a few years.
c. Face Recognition
Biometric Face Recognition is considered the next level of banking security. Previously, this technology was widely known by the Face ID functions of Apple’s iPhone X. There are various complicated and cutting-edge technologies behind Face recognition, for example, 3D sensor and software algorithms to determine ones’ facial features matching with a face that have similar characteristics in systems, such as eye, lips shape, and color, the position of these features, etc. Face Recognition requires multi-factor verification, which creates more barriers to fraud.
AI Technology greatly contributes to making it an automatic process for minimizing touchpoints when unlocking baking applications in a smartphone or getting cash from the ATM. During the COVID-19 pandemic, using Face Recognition for the banking industry is extremely effective when customers can do banking-related activities while preventing the spread of coronaviruses with “touchless” technology. All 3 types of biometric technology are nearly impossible to fake since it requires personal characteristics that no one can have 100% resemblance such as facial, voice, or fingerprint patterns with others. Consequently, biometric face recognition helps banks to bolster users’ confidence in bank security. However, there is no perfect technology existing, including biometric face technology. The process of scanning facial features can occur errors due to temporary physical changes such as makeup, glasses, and lenses. Moreover, when accepting to use Face recognition, users are taking risks with their images. Unlike passwords which can be reset again, once your face image is leaked, frauds can use it for bad purposes without your consent or steal assets in bank accounts.
3. Final thoughts
When the world keeps changing with the rapid development of brand-new technologies and widespread digital transformation, building an effective security system is a key priority. With the enormous advantages, biometric technology is predicted to explode soon and become a game-changer in the security landscape of every industry, involving the banking sector. Biometric technology helps banks to develop a new way of authentication and automatic transaction making with a high level of security and convenience.
To not getting left behind, you should consider integrating biometric technology into your businesses. Let’s contact us for free blockchain consulting. SotaTek, which is a top-notch Custom Software Development company, delivers B2B Fintech Services that help your business to build effective touchless and safe identification systems by leveraging advanced Biometric Authentication App Development Services such as AI Development with blockchain technology.