The recent situation in the world has accelerated the digitization processes in companies from various sectors of the economy by
three or four years. The financial sector is not an exception. Such a leap has impacted both the services provided and building internal processes. Let's talk about the advantages of applying cutting-edge digital solutions in FinTech using the example of
one of the actively developing areas - biometric technologies.
What biometric technologies are
Biometric technologies are technologies based on biometrics - the science of measuring a person’s individual characteristics. These features can be congenital (eye color, fingerprint pattern) or acquired and changing over the course of life (voice, handwriting).
Characteristics that are checked and used by biometric technologies are subdivided into static and dynamic. The former include fingerprints, retina, veinprints, etc. The latter are voice, intonation, the dynamics of reproducing a signature and a code word,
The evolution of applying biometric technologies
Biometric technologies were originally used in security systems at military facilities. Then, they began to be actively applied in airports, large malls, and other places of mass gathering.
Today, technologies of biometrics
are widely used in areas involving information access. Financial companies are constantly facing the challenges of data security and user access management, which is why they use biometric technologies in many of their processes - primarily in the processes
where authentication is required.
How the biometric authentication process goes
There must be information about a user in the system so that it can recognize them. This means that the performance of the biometric authentication system starts with recording certain individual characteristics of a person. Then, the information is converted
into mathematical code, which is stored in the database and will be associated with a certain user.
When a person tries to access the system, a scan is carried out, and the received data is also converted into a digital code. Then, the code in the database and the new code are compared, and the system concludes whether this information matches. If yes,
the user gets access.
Trends of biometric technologies
The main technologies on the biometric system market are based on the recognition of the following individual characteristics (listed in sequence from most frequently used to rarely used):
2. face image;
3. iris image;
6. hand geometry;
Researchers predict that, in the near future, biometric technologies with fingerprint identification will grow more slowly than other segments and will soon cease to be the leading one. In the next five or seven years, an increase in the popularity of solutions
with identification by veinprints, voice, and iris image is expected.
Let's look at examples of financial solutions that use some of the above individual characteristics for biometric authentication.
ATM without using a bank card
The first ATM for cash withdrawal appeared in 1967 in England and used a PIN for authentication. There have been changes since then, and new functions have appeared in ATMs. One of them is the ability to withdraw money without a bank card, making ATMs even
more accessible. Such interaction with ATMs is possible due to the use of biometric technologies.
How does it work? The customer logs into their account in the banking application. For this purpose, multi-factor authentication is used (this means that not one but several login parameters are checked). The user enters a PIN and uses a camera for face
recognition or puts a finger on a smartphone button for fingerprint reading. Then, a virtual analog of the card appears on the screen, which one can attach to the ATM and withdraw money.
Such a scheme requires a smartphone. But there is another way where neither a card, nor a banking application on a smartphone, nor a PIN code are needed. Sensors for reading biometric parameters are installed right in the ATM. The ATM is connected to a common
banking system of servers where it obtains information about users. The client is identified by a fingerprint or other characteristics and receives money.
The cost of such ATMs is still higher than that of the standard ones, but developers are working on their optimization. In this case, the advantage of biometric technologies is their simplicity and security.
Technological development is making adjustments in sectors that involve working with information. The financial sector is not an exception. This area quickly reacts to changes and actively applies innovations.
Security assurance is a priority for banks and financial institutions, along with providing quality banking services. Biometric technologies take this aspect to the next level.
A recent study by Visa shows that two-thirds of users find biometric authentication an easier and faster solution than passwords, and more than half of cardholders will switch to another bank if their current financial institution doesn’t provide biometric
authentication capabilities. Thus, companies using such technologies not only care about data security and follow digitalization trends but also increase customer loyalty.