Banks & biometrics: a profitable partnership

Security concerns for modern businesses, coupled with the fact the average consumer has 17 passwords to remember/forget, makes this self-evident. Tony Chew of Citibank has said: “Biometrics isn’t science any more. This is a business decision.”

Speed of secure transaction or log-in creates heightened expectations which filter across multiple sectors. Consumers want to do less, not more, and they thank the brands that save them time.

Paying with a selfie, your wrist, by speaking or having your eyes scanned is coming to ATMs, apps, bots, websites and whatever is next. For example, if you bank with Captial One in the US you can, via voice control, use Amazon Alexa to get your bank balance. NatWest’s Get Cash ATM innovation is rife for improvement using new biometric technology to make it even easier to withdraw money should you lose your card. And new US ATMs are being rolled out with NFC technology embedded.

Goode also predicts that there will be 622m mobile banking apps offering biometric authentication by 2020, 160m biometrics-equipped wearables compatible with banking applications, and $5.6tn in payments being secured by biometrics.

It’s a seemingly bright future for biometrics to be applied and pioneered in banking and financial services. But innovation will come from all sectors – such as with AI from IBM, or facial recognition from Facebook. If Apple launched a bank today it would be beautiful, considered, simple and smart. If it did send you a new credit card, the unboxing would be beautiful and perhaps even worth filming and uploading to YouTube.

Increasingly easy to forget passwords and pin codes are being replaced by new and improved means of authentication across three areas: thumb, voice and face.

Firstly, the most commonly adopted method of biometrics is fingerprint sensors, eg Apple Pay. A study conducted by Mitek in 2015 identified that for mobile authentication, 61% of millennials preferred fingerprints (to traditional methods), while almost a third claimed that they would use facial recognition. For apps, it has become very common to now have sign-in via touch ID or equivalent with the vast majority of UK banks having implemented this in some form.

Secondly, facial recognition is the fastest growing form of biometric authentication, since ‘taking a selfie’ is so common place. According to TrendForce, facial recognition tech is expected to double in value to $450m by 2019. It was first powerfully demonstrated by Alibaba via ‘pay with a selfie’ in 2015. More recently, HSBC launched the ability to set up a new bank account using your face. The HSBC mobile app uses facial recognition software to take a headshot a customer, which is then compared against an uploaded photo ID, such as a driver’s license or passport. There are a lot of interesting developments in digital ID using facial recognition, with many startups in this space being acquired.

Finally, there is a rise in voice authentication systems. Citi bank launched a voice verification system for when credit card customers call their bank, to verify their identity. Alibaba is also looking into voice authentication to make a payment, by speaking a particular phrase. Who knows, maybe Apple will launch Apple Say? Furthermore, First Direct rolled voice authentication out to 1.2m banking customers in 2016. Other parts of the human body being investigated include authentication via heart beat or retina scan.

Interestingly there have been many awards won from fintech startups and large financial services brands such as Lloyds Banking Group for work around heart beat authentication, however the barrier to adoption is always security and consumer attitudes. Does it make life easier, simpler and is it safe – are consumers already doing it when they get a taxi or order a takeout? If the answer to these questions is ‘yes’ then expect to see success. If any of these answers result in a ‘no’ it will take time to see new biometric techniques take off.

Implementing biometrics – especially fingerprint technology – has become quicker, more reliable, stable and affordable. As a result of the implementation of biometrics, financial services can reduce the cost (and user frustration) of dealing with users not being able to log-in via traditional pin, password and username means. It can also increase the perception of innovation, gain trust, potentially help acquire new customers and increase conversion. Therefore, biometrics can be a profitable endeavor if focused correctly.

Financial services' attitudes have become much more forward thinking of late. The following quote from the Bank of Melbourne highlights this: “You can’t do today’s job with yesterday’s methods and be in business tomorrow.”

So with biometrics keep your eyes peeled, voices activated, faces relaxed and heartbeats synched. Soon, maybe, we will live in a world transformed with no more forgotten passwords and usernames.

This article originally appeared in The Drum Network supplement magazine on 8 March 2017.