Why Is Biometric Authentication Rapidly Gaining Traction in the Banking Industry?
Author: admin | 02 Feb 2024In This Post
The banking sector has security concerns as the authenticity of their manual systems is being compromised. The flaws in current authentication and verification methods, including passwords and PIN numbers, are the pointers behind data breaches, resulting in hefty monetary losses. Advanced biometric authentication in the banking industry reduces data leakage, involving physiological and behavorial characteristics to recognise a person. In 2023, the survey report from English-speaking countries stated that 47% of respondents mentioned that the primary benefit of biometric authentication is not remembering the password, 30% claimed it simplifies the onboarding process and log-ins, and 10% suggested it for online privacy.
Individuals around the globe are habitually using different types of biometrics, as this technology improves security in many industries, specifically banking. With the passage of time, the banking industry is replacing conventional biometric systems to detect and combat fraud in financial transactions. Biometric banking systems have robust authentication that secures in-person or online transactions, boosts brand reputation, and strengthens client trust. That’s why banks are implementing technology that specifically secures transactions and improves the user experience.
Key Takeaways
- Biometric authentication in banks restricts scammers and secures client information instantly.
- Using biometrics in banks saves customers from different challenges, such as staying competitive and minimising risks.
- As per the 2023 survey, 47% of the audience stated that biometric authentication lessens the worry of remembering passwords and PINs.
What is Biometric Authentication- A Quick Insight
Biometric authentication is the most secure identification method as this advanced technology uses unique physiological and physical traits, including facial features, fingerprints, DNA, and voice recognition, to verify a user. Biometric verification is not just restricted to offices; it can also be seen in our daily lives, including smartphones.
Use of Biometrics in Banking
With biometric authentication, banks also facilitate their clients to proceed with their financial tasks without remembering PINS or passwords. Users can easily access their account by simply looking into the camera or doing financial transactions by swiping their ATM card without remembering any password, making payments secure and private. That’s how banks ensure a safe and hassle-free user experience.
When Do Banks Require Biometric Authentication?
Financial institutes and banks require biometric systems when clients apply for any loan, open a savings account, online sign in to a bank account, etc. Furthermore, biometric authentication provides many benefits in banks, from onboarding users to daily financial transactions.
Which Challenges Are Being Faced by the Banking Industry?
In the modern world, end-to-end banking is required. However, with the advent of ‘fintech’, bank procedures have transformed significantly. So, banks are facing the following challenges that have to be tackled with advanced biometric authentication technology.
Satisfying and Serving Members
Conventional banking methods were not properly serving and satisfying customers, as PINs and passwords are old techniques of verification that are challenging to remember. If any firm doesn’t provide advanced services, then they must be ready to witness the reduction in their clients. Customers demand a streamlined experience to access their banking information instantly and ensure their money is in safe hands.
Staying Competitive and Managing Cost
One of the primary challenges for banks is to manage costs, as data breaches and network safety can cost millions of dollars to them. ACI Worldwide report states that 44% of clients’ financial accounts are compromised, and 15% lead to fraud. Ponemon Institute reports that these breaches can cost $9.4 million on average –The reason more banks are shifting to a digital approach, raising competition in the financial market.
Minimising Risks
As per a recent Javelin Strategy, identity theft happens every two seconds and these incidents are rising as imposters are getting tech-savvy. In the US, the number of data compromised in 2022 is 1,802 cases, and more than 422 million users have been affected through data leakage, breaches, and exposure. These figures seem to be scary for financial institutes, and they can’t afford to put their clients at risk.
Integrating Old Technology
Banks and financial institutions face the challenge of implementing technologies with traditional legacy technology that is typically older or updated. Technology is advancing at an unprecedented rate, so finding solutions compatible with older systems is complicated.
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Why are Banks Swiftly Adopting Advanced Biometrics Solutions?
From reducing risks to satisfying clients, the banking firm is facing different challenges. To overcome these, they are adopting advanced biometric authentication solutions. Let’s talk about why advancement is necessary.
To Provide Seamless Online User Onboarding
A major reason why banks are shifting to biometrics is to provide users with seamless online onboarding. After the COVID-19 pandemic, firms are going remotely due to their contactless nature and making virtual biometric authentication a norm.
Instantly Authenticate Bank Customers
Recently, Experian carried out research that found that 61% of individuals state that banking is more secure through biometric authentication than using PIN or password systems. Furthermore, banks state that biometrics provide them with the capability to authenticate clients quickly. These biometric systems instantly provide transparency in client accounts, so there are no chances of duplication or fraud.
Instantly Prevent Fraud
Another benefit of adopting biometric technology is that it helps firms in fraud prevention and prevents unwanted users from compromising individual data. Biometric authentication in banking is the most efficient technique to keep client data secure. Besides securing a client’s identity, biometric authentication restricts insider scams. Hence, the use of biometrics in banking improves accountability, establishes safe employee authentication and audit of each financial transaction.
To Monitor and Trace Client Activity
Biometric identification banking systems help in tracking and monitoring client activity with audit trails. These solutions help to see client activity in the software and alert employees if any problem arises.
Cling to the ISO Compliance Standards
Banks and financial institutions are transforming biometrics to stick to ISO compliance standards. Biometric authentication in banking must undergo specific compliance steps before it’s considered ISO compliant, as it can minimise fraud occurrence by 99%.
Why Does the Banking Sector Choose Facia for Biometric Authentication?
Established in 2021, Facia is the pioneer in liveness detection solutions, assisting banks by providing biometric authentication. In the past years, they have provided thousands of digital biometric solutions to banks, from KYC onboarding to customised biometric authentication systems. If you are looking for a feature-rich and well-developed facial biometric system, then look no other than facia. We have a dedicated team of professionals that can help firms to achieve their goals.
The following key features help us make our service unique:
- 100% accuracy rate
- Helps in combatting 53% of spoofing attacks
- Innovate and adapt quickly to the dynamic tech landscape
- Provide services in 190+ countries
- Successful compliance with GDPR and recognised by NIST
Connect with us to avail a secure biometric authentication system.
Frequently Asked Questions
Biometric authentication is a security process that uses unique physical or behavioral characteristics, such as fingerprints, facial patterns, voice, or iris, to verify individual identities. This method allows access only to authenticated users, offering enhanced security due to the difficulty of replicating or stealing biometric features.
Authentication confirms the identity of a person or device, often as part of accessing a system or service, by checking if provided credentials match those in a security system. Verification, within authentication, specifically checks if the presented data (like a fingerprint or face) matches the assumed identity's data, focusing on proving the truth of a single claimed identity.
The process involves capturing a biometric feature (e.g., fingerprint or facial scan), digitizing this data, and comparing it with stored templates in a database. Access is granted if a match is found; otherwise, it is denied.
Key biometric types include fingerprint scanning, facial recognition, iris and retina scans, and voice recognition, each leveraging different physical or behavioral characteristics.
Biometrics enhance security by making unauthorized access difficult, offering a user-friendly verification process that is quick and efficient.
Disadvantages include privacy concerns related to the collection and storage of sensitive biometric data, potential for errors such as false positives or negatives, high implementation costs, especially for complex technologies, and sensitivity to physical changes in users that might affect accuracy.
