As the volume of financial service security breaches, transaction fraud, and identity theft increases, the need for highly secure customer identification systems is becoming extremely important. As a result, in the banking and finance sectors, the “Know your customer” (KYC) initiative is getting more traction to prevent fraud and identity theft. One technology that is getting a lot of attention to help increase security and customer convenience is biometrics in banking for customer identification.
Use of Biometrics in Banking
Biometrics are used in banks as an identity management tool for all types of services, including:
- Withdrawing cash from ATMs
- Verifying customer identities through voice biometrics for telephone transactions
- Mobile bank app authentication
- Using a combination of face and voice to fulfil Know Your Customer (KYC) and Anti-Money Laundering (AML) measures when accessing web-based eBanking services
According to a recent report it is predicted that, by the end of this year some 450 million bank customers globally will be using biometric solutions for banking, and the technology is predicted to be the principal banking authentication method by the year 2020.
Major Drivers for Biometric Technology in Banking
Although the use of biometric identification in banking could minimize transaction times and offer authentication convenience, improved security is its single largest value proposition. Banks and other financial service entities increasingly recognize the importance of biometric technology in securing customer identities to prevent security breaches. In fact, the financial services industry is also thinking of alternative ways to use this technology to combat money laundering, Internet transaction fraud, and identity theft related crimes.
Who is using Biometrics for Banking Services?
Over the last few years we have seen quite a few financial organizations adopt biometric technology to increase security. Here is list of some of the early adopters:
- Mars National Bank of Pennsylvania: Replaced the teller line and now includes “pods” for transactions, meeting rooms for privacy and self-serve convenience boxes – a new concept which lets customers access boxes that use biometrics for security
- Deutsche Bank: Replacing traditional passwords with fingerprint technology, facial recognition, and smart technology that intuitively knows how customers hold a phone
- The National Payments Corporation of India (NPCI): Preparing to pilot iris-based authentication for banking
- Mountain America Credit Union: Implemented biometric authentication for mobile users, allowing them to log in via Eyeprint ID and Touch ID
- Wells Fargo& Co.: Testing voice and iris recognition to authenticate customers using mobile applications
- Barclays Bank: Launched a new high-end banking service that lets its largest customers stay secure by using biometric security
- HDFC Bank: Use fingerprint recognition technology to disburse quick automobile loans
In the years to come this list will grow larger because are many other financial institutions who are seriously considering the adoption of biometrics in banking to increase security and protect customer identities.
Bank customers are fed-up with identity theft and the inconveniences associated with constantly having to prove their identities. Consequently, banks and financial institutions (whether it is on-site, online, or via smartphone) see the use of biometrics in banking as the future technology to protect their customers. Some early adopters have already taken initiative, when will you join them to provide convenient and secure financial services?