Biometrics in Financial Services: How, What and Why?
For years, biometric authentication has been associated with mobile phones – and with good reason. Since the launch of the first fingerprint touch sensor on Android in 2014, there has been a steady march to the mass deployment we see and interact with every day. Mobile is not the sole use case for biometric authentication, however – and, increasingly, it’s lending a helping hand to payments security. But what are the main drivers bringing biometrics into the financial services world? And how is the market likely to shape up? Lina Andolf-Orup, Senior Marketing Director at Fingerprints, answers these questions below.
A tap over the limit
2018 saw biometric payment cards transition from theory to reality. Partnerships with banks, vendors and payments schemes gained real traction worldwide and have continued to do so into 2019.
In March this year, the UK’s first biometric payment card trials were announced by Royal Bank of Scotland and NatWest to great acclaim, with the solution described by NatWest as, “the biggest development in card technology in recent years.” The major motivation cited behind these UK trials? The opportunity to ‘scrap the payment cap’.
Since its launch more than a decade ago, the popularity of contactless card payments has grown considerably, and adoption in the UK has been particularly high. Recent industry figures suggest the total value of contactless transactions reached £5.9 billion in February 2019 alone - an increase of 19.8% during the same period in 2018 - while almost 83% of consumer debit card transactions are now contactless.
Limited to £30 per transaction however, the true potential of contactless payments has been cut short. While the cap responds to security concerns, adding biometric trust to a payment card can empower banks to lift the payment cap without impeding consumer convenience.
The natural evolution of the contactless card? We think so.
Biometrics is taking centre stage as a means to strengthen security without simply adding more forgettable PINs and passwords.
Security for the age of apps
Open banking and the mandates of PSD2 are making banks, merchants and device makers consider how they can best deliver multi-factor secure customer authentication (SCA) solutions. Meanwhile, in an increasingly connected, always-on world, consumer demands for a more seamless UX have never been higher.
Biometrics is taking centre stage as a means to strengthen security without simply adding more forgettable PINs and passwords.
Its application in mobile devices is increasingly extending beyond simply opening the device to guarding the applications within them. From open banking apps and digital wallets, to m-commerce and in-app purchases, consumers are rapidly realising the benefits biometrics bring to managing and protecting their financial lives.
Introducing biometrics can also enable stakeholders to foster greater consumer trust and safeguard privacy concerns. Not something to shy away from in a post-GDPR Europe.
Payment form factors are exploding!
With over 20 trials announced across the globe, the biometric payment card is likely to be the next big fingerprint-secured solution to revolutionise the payments world. But the possibilities for new form factors are endless – from wearables to USB authentication dongles.
Biometric authentication has an unrivalled opportunity to unify the authentication process across form factors and platforms.
In parallel, we’re also likely to see biometrics technologies beyond fingerprints continue to grow in adoption. The success of fingerprint has paved the way for other biometrics technologies to achieve success, including touchless facial and iris recognition solutions. In fact, we’re increasingly likely to see solutions combining multiple biometrics technologies where, for example, a device could authenticate your face and fingerprint at the same time. By ‘layering’ security with biometrics, the FS world can continue to improve UX, reduce fraud, and perhaps finally say goodbye to PINs and passwords.
Consumers are the key to everything
In an age of increasingly connected, seamless solutions across industries, the consumer experience sits at the heart of everything. Biometric authentication has an unrivalled opportunity to unify the authentication process across form factors and platforms.
For payments, and the FS world more broadly, biometrics answers an age-old question: how do we add security without harming UX? This balance of trust and convenience is vitally important and is what will see the technology continue to thrive in smartphones and in applications far beyond.
It’d be naïve to look too far ahead, but we can be sure that if the rest of the year continues with the same pace as the first quarter, the biometrics industry will certainly be kept busy!
Website: https://www.fingerprints.com/?utm_source=iseepr&utm_campaign=FinanceMonthly_article
Twitter: https://twitter.com/FingerprintCard
