Money and security have always gone hand-in-hand — the more you have of the former, the more you need the latter. That’s part of the reason that biometrics has become such a hot topic in the world of financial technology in recent years. As financial services increasingly go digital, and money goes virtual, there’s a greater need than ever to make sure that access is given only to the authorized user, and that fraudsters are kept out.
But convenience has also emerged as a key factor in the growth of FinTech biometrics, with a growing number of consumers appreciating the ease of a fingerprint scan on a smartphone, or voice identification in a call center — especially when this technology can replace clunky and unreliable password security.
As a result, the financial world is throwing more money at biometrics than ever, and innovative solutions are proliferating. There’s a huge amount of variety in biometric FinTech, so to kick off Financial Biometrics Month, we’ve put together a primer detailing a handful of particularly hot areas.
The Mobile Channel
The most essential trend of the last few years has been the emergence of mobile biometrics in banking. Dovetailing with the mobile biometrics revolution pioneered by Apple’s Touch ID fingerprint scanning for the iPhone, this area remains crucial, with a wide range of banks and other financial services providers enabling customers to login to their accounts on mobile with a simple fingerprint scan or even a selfie, and newer innovations like behavioral biometrics adding an extra layer of security.
The mobile biometrics revolution has also led to a trend that has really caught fire over the last year or so — selfie-based onboarding, in which end users are able to open accounts remotely thanks to their smartphone’s camera. Sophisticated artificial intelligence plays a key role here, with computer vision technology being leveraged to read the end user’s official ID document and verify its authenticity, while facial recognition is used to match the photo in the ID to the user’s selfie image. A number of solutions have emerged, with some variation in the mechanisms and processes used, but the fundamental combination of ID reading and biometric facial recognition is what’s driving excitement among the clients embracing these systems.
What’s Next for Your Wallet
While mobile biometrics have reached a kind of crescendo in FinTech, another innovative technology is just tuning up: Biometric payment cards are expected to be a major new development in the financial services world in the very near future.
It’s the product of a couple converging forces, with fingerprint biometrics experts having sought new areas of expansion over the last couple of years, and financial services stakeholders looking for ways to enhance the security of tap-to-pay transactions as more consumers around the world have got their hands on NFC credit and debit cards. Now, a number of players have come through with viable answers in the form of fingerprint-scanning cards, and major institutional players like Visa and Mastercard are actively working with their partners to prepare the industry for major launches. Needless to say, a lot of money is riding on this technology.
What’s Next for Your ATM
The emergence of biometric payment cards could mean that biometric ATMs are about to catch fire, too. The concept has been around for years, and so has the technology. But one important reason that it hasn’t caught on is the lack of infrastructure — banks haven’t been collecting customers’ biometrics, and so there hasn’t been any great incentive to undertake such a project just so that customers can leave their cards behind when accessing an ATM. Biometric payment cards could change that. Mass enrollment opens up an opportunity to leverage those same biometric credentials in other banking applications, including ATM access.
In the meantime, isolated deployments have been popping up around the world over the past several months, illustrating the potential security and convenience benefits of biometric ATMs, which could help to inspire a wider embrace of the technology going forward.
Who Needs Cards Anyway?
There is a logical next step to all this, but it would still sound like science fiction to a lot of consumers. If an ATM can identify you by your fingerprint, and so can a payment card, why can’t a POS terminal, too? Why not just scan your finger to make a purchase?
The short answer is, you can. There are already systems emerging that can link a consumer’s credit or debit account directly to their fingerprint, or face, or even palm, allowing for a purchase to be made with no need for intervening hardware. It’s still a new concept, but it’s one that is already popping up in pilot projects all over the world. And as consumers get used to scanning their fingerprints on their biometric payment cards, or even scanning their faces to make purchases with Apple’s newest iPhones, it’s not hard to imagine that they will ultimately embrace the ‘naked payments’ concept, too.
Clearly, there’s a lot going on in the world of biometric FinTech. And more of this kind of innovation will be on display at this year’s Money20/20 Las Vegas event, where a wide range of players in the financial services sector will be keen to show off their latest solutions. Be sure to stay tuned as the week ahead of Money20/20 is sure to bring a lot of big announcements from the world of biometric FinTech, and don’t miss our live coverage from the show floor once Money20/20 kicks off on October 21st!
October 11, 2018 – by Alex Perala