How Biometric Tech is Beneficial to Financial Security

biometrics for financial security

A rise in data breaches is prompting many banks and financial institutions to adopt biometric identification technology for customers and staff. (Photo courtesy of flickr).

The following guest post on the use of biometric technology for individual identification in banking and financial services was submitted by Maricel Tabalba.

A significant increase in data breaches in the past few years has urged many financial institutions to consider using biometric security. The Gemalto breach level index showed that there were 1,540 credit card related data breaches in 2014. Additionally, the Consumer Sentinel Network stated that the number one complaint in their database were concerns regarding identify theft. Continue reading →

Will Biometric Technology Take Over Banking Security?

The use of biometric technology for banking security is on the rise.

The use of biometric technology in the banking sector is on the rise.

If you haven’t heard the news, more banks are adopting biometric technology for customer authentication to increase security. Banks all around the world have been searching for more advanced technologies such as biometrics for better protection against identity theft, fraud, and cyber-crime often perpetuated by stolen customer identities.

Biometrics acts as a strong authentication tool to help secure transactions and also helps to increase customer trust and improve brand reputation. Biometrics in banking has evolved so rapidly across the world that it raises the question as to whether the technology is going to entirely take over banking security. We believe it is.

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Infographics: The Impact of Biometrics in Banking

As global financial entities become more digitally-based, banks are piloting new technologies to improve customer and employee identity management in an effort to combat fraud, increase transaction security, and enhance customer convenience. One cutting edge technology increasingly used at many of the world’s top financial institutions is biometrics. In today’s post, we have identified the factors that drive demand for biometrics and the impact it’s generating, especially in the context of identity management in the banking sector. Continue reading →

Biometrics in Banking: Are Customers Buying In?

Banks and financial services are shifting towards biometrics to ensure security and customer convenience.

Banks and financial services are shifting towards biometrics to ensure security and customer convenience.

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. Continue reading →

The Impact of Biometrics in Banking

biometrics in bankingThe rapid digitization of banking services combined with the continued need to adopt stricter customer and employee identification protocols to prevent identity theft and fraud has set the table for biometric identification technology to become an integral and strategic part of financial service security platforms. Acting as a strong authentication tool to help secure ATM, brick and mortar, and online transactions, biometrics in banking also helps to increase customer trust and improve brand reputation. The necessity for a stronger authentication solution became inevitable in banking services because of the growing pace of sophisticated transactional technology adoption along with the unfortunate rise in fraud and security breaches due to reliance on traditional security systems such as passwords.

biometrics in banking

The rise in use of biometrics in banking is helping to better secure customer transactions to prevent fraud.

Biometric Technology in the Banking Sector

Biometrics are automated methods of recognizing customers through their biological characteristics and traits such as fingerprints, finger vein patterns, iris, and voice recognition. Biometric characteristics are unique for every individual and difficult to forge, which is why biometric verification and authentication is commonplace in immigration control, law enforcement, and forensic studies. Many banks worldwide are already using biometrics with their banking systems to authenticate employees and customers and among all banks utilizing biometrics, 52 percent are located in Asia. Japan has more than an estimated 15 million customers using biometric authentication for banking transactions. Banks in Mexico, South America, Africa, and the Middle East are also moving towards the use of biometric identification technology because of its popularity with consumers, and ability to offer more security than traditional personal identification numbers (PINs) and passwords.

Figures – Proportion of Banking Using Biometric in Different Continents

Different Ways to Use Biometrics in Banking

Biometric technology is slowly replacing traditional passwords and token-based electronic access, signature-based branch service access, and PIN-based access in mobile banking and at ATMs. Here are ways that banks can use biometric technology to improve banking services and better protect customer assets:

  • Biometrics in Branch Banking

Financial service institutions are using fingerprint and finger vein biometrics in banking for customer identification in their branches because these two biometric authentication methods deliver fast results that are suitable for the busiest branches of a bank. Moreover, finger print and finger vein systems are user friendly, easy to use and ensure reliable security. When customers visit branches they can be authenticated at the counter through fingerprint and finger vein biometric scanners that match the customer’s existing biometric template within the bank database, and after successful authentication, the customer will be allowed to move forward with their banking transactions.

  • Biometrics  in Banking ATMs

Using biometrics in banking ATMs is popular in developed countries and the adoption rate is growing significantly. There are two approaches for customer authentication in ATMs — a customer using only biometrics and a bank card or a PIN along with biometric authentication. Therefore, facial recognition, fingerprints, finger vein patterns and iris recognition are the most suitable in ATMs as these biological traits can be easily authenticated in this environment.  Furthermore, these types of biometric modalities also have other advantages such as flexibility, compactness, and accuracy.

  • Biometrics for Internet Banking

Many computers, laptops, and even smart phones already have webcams, microphones, and fingerprint scanners, offering flexibility for banks to easily adopt biometric authentication in online banking services with fingerprint, finger vein, facial, and voice recognition. When customers attempt to access their account, some banks now require them to provide a biometric credential first. Some banks require biometric authentication beside the traditional password to make authentication stronger, also known as a “multi-factor” authentication system. This helps banking institutions to protect customer identities from being compromised by cyber criminals and any others trying to illegally obtain sensitive customer information to commit a crime.

  • Biometrics in Mobile Banking

Mobile banking is growing rapidly worldwide, and according to Juniper Research, 400 million people performed a mobile banking transaction in 2013. Despite this large number, many bank customers still have a lack of trust over the security of mobile banking platforms and concerns over security. Banking transactions or customer services could be performed through a voice or speech recognition system where customers need to verify their identity using the microphone in their phones.

  • Single Sign on Solution for More Effective Password Management   

Banks and financial institutions are suffering from network security and data breaches worldwide. According to a recent ACI Worldwide Survey, 44%of customer financial accounts have been compromised and 15% of breaches cause fraud. In a 2013 Ponemon Institute Survey, it was reported that an average cost of these types of incidents is $9.4 million. Banks can easily adopt biometric single sign on (SSO) solutions into their network for password management, identity management, data and network security, and two factor authentication. This system will eliminate vulnerable passwords and loopholes of a bank data security system and will protect both banks and customers from unauthorized access and data breaches. Furthermore, a biometric SSO system will mitigate other security risks and regulatory fines for government compliance.

Benefits of Using Biometrics in Banking

  • Protecting Banking Information – Biometric technology provides the strongest method of authentication that protects banking information from being compromised by unauthorized personnel.
  • Fast and Accurate Branch Banking – Biometric technology provides fast and accurate identification for the banking industry. Customers can be quickly authenticated in mere seconds through a fast biometric scan.
  • Protection Against Insider Fraud – Biometric identification of employees performing transactions on the back end is a crucial step to ensuring identity protection and reducing fraud. Biometrics in banking will help financial institutions to prevent insider fraud by establishing secure employee authentication, accountability and concrete audit trail of each transaction.
  • Secure Online Banking – Over the past years the banking sector has been suffering from massive online service cyber attacks. In most of these cases customers lose their money from the negative effects of identity theft. Biometrics in banking helps the bank to protect customer identities when using online banking services.
  • ATMs with Biometrics – Biometrics in banking for ATMs authentication brings outstanding benefits to both customers and banks. This system now gives customers flexibility to make transactions without bringing bank cards. Banks can avoid the costs and liabilities of customer problems due to lost or stolen bank cards.
  • Audit Trails – Banks can easily track and monitor employee and customer activity in the system to create concrete audit trails with biometric technology solutions.
  • Fast, Secure and Accurate Customer Care Service – The banking sector is always in need of tighter security solutions to provide improved and more secure customer care service over the phone and internet. A biometric voice recognition system for example provides a secure and flexible solution to verify any customers executing transactions outside of a brick and mortar environment.

Conclusion

Due to the role of customer trust and loyalty in the success of banks, and thus in the economic development of countries, banks should provide convenient and more secured banking services to customers. Biometric technology, integrated with an existing traditional security system, will empower banks to deploy the highest level of authentication security possible.
This blog post was written by Arifin Hossain, Executive in our Business Development & Interactive Marketing Department

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Should all Micro-Credit Banks Use Fingerprint Biometrics Banking Technology?

Micro-credit bank using fingerprint biomtrics banking technology

Nobel Laureate Professor Muhammad Yunus

Perhaps foreshadowing a future shift for micro-credit banks across the globe to start using biometrics for customer identification, we distributed a News Release today announcing that ASMAB, a micro-credit bank in the country of Benin, has started to use fingerprint biometric banking technology for customer identification. The genesis for ASMAB’s decision to start using fingerprint biometrics was the widespread fraud and corruption that plagued their business, specifically customers falsifying their identities. These problems were undermining customer confidence in their process so ASMAB (with help from HPC Informatique, a technology solutions provider) decided to incorporate fingerprint biometrics to identify customers, eliminating fraud and corruption in their system and helping to secure consumer confidence.

Headquartered in the Western African capital city of Cotonou, Benin, ASMAB is modeled after the micro-credit Grameen Bank in Bangladesh, pioneered by Nobel Laureate Professor Muhammad Yunus to lend money to the poor facilitating socio-economic development, encouraging savings, and fighting loan shark corruption. Expectations are high that biometrics will help to increase security and decrease fraud in the system restoring customer confidence and building trust. We will be sure to report back at a later date with an update on how the deployment is going and if it is meeting ASMAB’s expectations.

Micro-credit banks have sprouted up all over the globe to help provide low income citizens the chance to borrow money on safe and secure terms. Can we expect to see others follow suit and adopt biometric identification for their customers? You can be sure that after news breaks of ASMAB’s efforts, other micro-credit banks may begin to explore this technology too.