Offshore Development Companies Are Bringing Biometric Identification Management Technology in Banking Sector

use biometrics to identify customers and employees in banking

What impact has biometric identification had on the global banking industry? (Photo courtesy of pixabay)

The followin guest post on biometric identification in banking was submitted by Vin Boris.

BIMT (Biometric Identification Management Technology) has been in use for decades. This form of technology has proven its metal and has entirely changed the way security practices are conducted in every field of our life.

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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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The Impact of Mobile Biometrics in Banking

Biometrics in Banking

The acceptability of mobile biometrics in banking is on the rise

Smartphones are powerful tools, and when used for authentication purposes in banking, they can become even more so. Source

The rising demand to more effectively secure online and mobile banking and financial services transactions through accurate customer identification to prevent identity theft and banking fraud has sparked an interest in the use of biometric identification technology.

Biometric identification solutions provide quick and accurate customer authentication by using unique physiological characteristics (who you are) for identification instead of PINs (what you know) or ID cards (what you have).

Biometric identification technology is difficult if not nearly impossible to forge, meaning that through the use of biometrics, the banking and financial services sector can drastically reduce or even completely eliminate losses incurred by customer identity theft and fraud. A lot of banks around the world are already using biometric technology for customer identification, and a lot more are following suit.
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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 →

New Technology to Tighten Bank Security – Voice Biometrics

voice biometrics helps secure financial trasnactions

Voice biometrics is playing a larger role to help better secure transactions in the financial services industry.

When it comes to banks, there is a constant need to update security measures to ensure the safety of bank accounts. Biometric voice recognition technology now enables bank customers to use their voice as an added layer of protection for their bank accounts.

Voice biometrics is a very promising innovation that will protect accounts from call-in center scams, wherein felons call a bank’s customer service hotline pretending to be in a situation that will move the assisting representative to give them access to confidential data and inevitably, to the account’s funds. 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

biometric fingerprint scanner

New Deloitte Report Indicates Biometrics in Banking Could Help Secure Mobile Transactions

biometrics in banking is on the rise

The use of biometrics in banking is increasing as more consumers understand its potential and become more familiar with the technology.

The Deloitte Center for Financial Services released a report that indicates eroding consumer confidence in the security of mobile financial service applications has forced the industry to take a closer look at incorporating technologies such as biometrics to help alleviate fears and insecurities. The report seems right on cue following our post last week about the need for the financial services and banking industries to more closely assess the use of biometrics for customer and employee ID and to better secure mobile devices while engaging in transactions.

A link to the full report can be found here and it presents some very interesting statistical data culled from a recent survey Deloitte launched to ask consumers about their comfort level with using mobile banking apps. A few of the highlights:

  • Many (banking customers) are hesitant to use mobile services due to concerns over security, privacy, and ease of use.
  • Mobile is increasingly becoming the primary method of interaction with their financial services providers.
  • Should the at-home mobile experience that financial services companies offer be different from out-of-home experiences, where there is perhaps greater concern about security and privacy? 
  • (Consumers) placed a much higher value on the ability to interact using mobile devices with their banks than with other financial providers.
  • For many consumers, when it comes to conducting financial services over mobile devices, the advantages and conveniences offered by smartphones and tablets are being trumped by more negative considerations about the devices themselves and data security.
  • 61% of those who do not regularly use mobile devices for financial services cited security issues as the prime reason.
  • 3 in 10 respondents said that security issues had prompted them to severely restrict the use of mobile devices for financial services.
  • 72% would appreciate the use of biometric identification in banking (such as fingerprints or eye scans) to enable a device for financial services transactions.
  • Biometrics is another mobile device capability that financial services companies could leverage to make customer interactions easier and more secure.
  • Nearly 2/3 of smartphone users said they would find it valuable to use biometric identification (fingerprint, voice scan, or iris scan) on mobile devices for ATM transactions and payments.

It is clear that the proliferation of biometric identification capabilities on smart devices has brought the technology more into the mainstream helping consumers to develop a higher comfort level to use it and more importantly, understanding why and how biometrics in banking is a natural evolution of securing online transactions. However, there is still trust to be built in using biometrics in banking on mobile devices to secure transactions. The report states:

“However, the comfort level with biometric security and encryption decreases as the amount of the transaction increases. For instance, the proportion of consumers who are comfortable with this technology drops from 26 percent for a transaction size of $1,000 to only 11 percent for a transaction worth $10,000. This finding illustrates that biometric solutions may be more successful for smaller transactions. As consumers gain experience with biometrics, they might then be more willing to use them for larger payments.”

What’s clear is that not only is biometrics in banking an opportunity for the industry to leverage existing smart device capabilities to boost security, but the use of biometrics is also an opportunity to better engage consumers and build trust – two critical pillars of quality service, customer retention, and spreading positive word of mouth.

Thanks to the staff at the Deloitte Center for Financial Services for their research and reporting. Extremely interesting insight into the rising use of biometrics in banking and an opportunity to truly understand consumer sentiment when it comes to their perceptions of whether mobile banking is appropriate for their use.

Do you feel that biometrics in banking has a place to help increase security and build trust with consumers?