Banks, understandably concerned with improving security amidst rising investments in payment technologies, are turning to biometrics for an answer. It is estimated that the market for biometric identification in financial services applications will increase
from $123 million in 2015 to $657 million in 2019. A year later, in 2020, payments worth $5.6 trillion will be protected biometrically around the globe. Authentication will come in many sophisticated forms, relying on unique biometric factors, such as finger
print/vein, voice, eye-print, facial features and heartbeat, to identify users.
A leading provider of market intelligence and consulting services in the areas of mobile, online and digital, forecasts annual spending on online fraud detection to touch US$ 9.2 billion by 2020.* A significant part of that spending would be on advanced
biometric authentication technologies to secure transactions, which are currently seen as a weak spot in the payment ecosystem.
In the coming years, biometric adoption will be driven by digital evolutionary trends – contactless payments and wearable payments using devices monitoring parameters such as heart rate, to name just two. ATM verification will also turn increasingly biometric.
South Africa has been one of the early adopters, employing fingerprint readers in its machines for the past 20 years. In Brazil, more than 55,000 ATMs are now biometrically-enabled. In Japan, that figure stands at 80,000, and a user base of 15 million customers.
And Latin America has made a splash with one of its biggest private banks deploying multispectral fingerprint readers at 16,000 ATMs.
But this is only the beginning of what awaits. Biometric technology is on an exciting trajectory with the industry exploring new avenues for deployment. Going forward, banks can not only regulate customer account access, but also mitigate insider fraud by
improving both employee verification and the traceability of every transaction. A leading American Bank, is an example – the bank is offering a choice of biometric authentication options to corporate users of its mobile banking application.
Elsewhere, plans are afoot to apply the technology at a mass level. In France, the national interbank network is exploring using biometrics in payments and is likely to introduce a new authentication standard based on fingerprints. Nigeria is in the midst
of a huge exercise to register the biometrics of bank customers to improve protection against fraud.
In the near future, biometrics can have multiple uses in banking beyond just accessing accounts. They can help financial institutions to prevent insider fraud by establishing secure employee authentication, accountability and concrete audit trail of each
transaction. Biometrics also serve as a great second factor authentication for higher-risk transactions such as wire transfers. Another use of biometrics in banking, though long term, can be behavioral mapping where biometrics can be used in nitpicking inconsistent
Finally, the technology itself is poised for a quantum leap into the realms of behavioral and brainwave biometrics. In a world where consumption is becoming more personalized, such developments represent the ultimate personalization of security.