Financial institutions have always been a hotspot for unlawful activities. The industry is the prime target for fraud, theft, robbery, or other criminal activities. However, its security has evolved drastically in the last decade. Now, it is moving toward the next step of advanced security, biometric identification.
A few decades ago, biometric technology seemed to be a technology of the future that would take a while to develop and become a part of our daily lives. However, technological advancements in creating and applying these systems to identify each person’s distinctive traits have made fiction a reality much sooner than anticipated.
Nevertheless, the security of current authentication techniques remains questionable. Personal information that is frequently shared online, including on social media, can be easily used to hack or guess passwords. It’s also true that more than 25% of four-digit passwords currently in use come from the top 20 PIN combinations worldwide.
Thus, FinTech businesses are looking into ways to streamline processes while also enhancing security. Leaders in the industry and experts are still pointing to biometric technology as the best option for a simple customer authentication process in mobile banking, retail, and other settings.
What Is Biometric Identification?
The accurate identification of people based on their inbuilt physical or behavioral characteristics is called biometrics. To rephrase, it entails finding patterns that are particular to each person, like the face, voice, fingerprints, or vein pattern, and using them to recognize service users of all kinds.
Because these patterns cannot be imitated, they are ideal for safeguarding sensitive operations, such as online financial transactions. Fintech companies are using biometric technology to solve the problems associated with anonymity on the internet, including on social media, along with providing intuitive and practical solutions for their customers’ and employees’ daily operations.
How to Use Biometric Identification In Fintech?
For authentication, biometric technology uses biological data, such as voice recognition or touch ID fingerprints. The human characteristics it employs to verify identity are distinct and unique to each individual. Many of us are already familiar with biometric technology thanks to our smartphones’ fingerprints and face recognition capabilities. Because of its security and simplicity, biometric technology is an excellent solution for the banking industry.
In the financial industry, biometric technology can be used to confirm a customer’s identity at any time. Biometrics, for example, can be used for:
- Signing up: By registering their face, a customer’s identity is initially verified for them to be registered as a customer.
- Identity verification: The verified data can later be used by customers when they are using the platform for payment, withdrawal, or other transactions.
- Agreement: Signing any kind of agreement requires prior identification verification.
Modes of Biometric Authentication For Fintech Companies
Human beings possess unique data in their genetics. Considering that biometric companies use such data to ensure safe access, biometric verification has different modes of authentication.
Mobile apps can scan and digitize a fingerprint in seconds, making it a hassle-free option. Fingerprint recognition is heavily used in mobile banking and branch banking because it requires little equipment and is a quick method to confirm one’s identity.
Face recognition is a technique that uses 3D sensors and computer algorithms to recognize a person’s face based on the relative position of their facial features. This method is gaining popularity but necessitates the use of some non-universal technologies.
Iris scanners examine the iris’s complex color and line patterns. Some iris scanners are even available on mobile phones and are simple to install at fixed locations, such as ATMs. Iris scanning is extremely secure because it is a form of live detection. Before completing a transaction, some newer ATMs and cash machines now require an iris scan.
Since fintech heavily depends on mobile banking, iris authentication would not be feasible for them. This is because iris scanning is not widely available on smartphones, and so, users need additional devices for verification.
Finger Vein Scanning
This modality is based on the unique vein pattern in your palm or finger. Typically, you must enroll in person with a palm scan. This method requires larger equipment and is more commonly used for branch or ATM banking rather than mobile banking.
The benefit of biometric identification
The financial industry can benefit greatly from biometrics. Some of the most significant advantages of biometrics in banking include:
- Quick and precise identification: Customers can be authenticated accurately and quickly using biometric technology. The customer’s identification is confirmed in seconds, which is convenient for both customers and banks.
- Exceptional safety: If documents can be forged or stolen, biometric authentication relies on distinguishing characteristics. As biometric technology advances, it will be a very secure way to identify banking customers.
- Reduced operational costs: Biometric data eliminates the need for additional equipment or human operators, allowing financial institutions to significantly reduce their operational costs.
- The management of transactions from any device: Customers can manage their financial transactions using biometrics on any device, from any location, providing the ultimate convenience. The transactions will be safer due to biometric authentication, as well as easy as they can be done from any place with access to the internet.
- Less fraud: Biometrics in banking aids in the prevention of insider fraud and cyber-attacks. Biometric technology assists banks in establishing secure employee authentication, providing a clear audit trail of every transaction. It also protects customers’ identities when they use online banking.
M2SYS Technology: The Complete Biometric Solution
M2SYS is one of the first companies to realize the importance of biometric identification in different industries. The company developed the perfect solution for customers, which will fit most of their needs. Customers can rely on M2SYS for specific case-basis solutions to the complete setup. With years of experience and a robust team of experts in the field, the company is looking forward to bringing more innovation to the industry.