The financial services sector has been one of the earliest adopters of biometric technology, and one of the clearest illustrations of its enthusiasm for this kind of technological innovation can be seen in the ascent of selfie-based onboarding in recent years. This has been such a dramatic success story that it has made it easy to overlook some of the other ways in which banks and other financial services providers are embracing biometric technologies today, especially with respect to their own, internal security measures. So for our latest feature for Financial Biometrics Month, it’s worth taking a look at some of the hidden gems of biometric FinTech that have been quietly gaining traction in the background.
Watching for Patterns
It doesn’t get any more “in the background” than behavioral biometrics technology. That’s because behavioral-based anti-fraud solutions are designed not to be seen by the end user. They are passive and completely frictionless, and that’s a big part of why banks love them.
Broadly speaking, behavioral biometrics solutions are designed to track various metrics such as the end user’s typing patterns, how they tap their smartphone screens, mouse movements, and so on. In so doing, they can spot some of the subtle signs of fraud: a user opening a new account who rapidly navigates online forms that should be unfamiliar to them, for example; or an unusual amount of hesitation when entering personal information that should easily come to mind.
Some behavioral biometrics, such as those developed by pioneers like BioCatch and BehavioSec, are able to go a step further. Beyond simply looking for behavioral patterns associated with fraud, these advanced behavioral biometrics systems are able to build unique user profiles around behavioral habits and to use these for user authentication.
All such solutions offer compelling benefits to financial services providers, especially as they have sought to adjust to the acceleration of traffic into digital channels in the wake of the pandemic. There is a strong need for solutions that can automatically spot fraud without adding friction to the user experience, and enabling the continuous authentication of legitimate users during an online session is a powerful tool for both security and customer service.
What’s more, there is still plenty of innovation ahead. A Montana-based startup called Neuro-ID recently raised $35 million in venture capital thanks to excitement about a behavioral biometrics solution that is designed to not only fight fraud but also analyze behavioral patterns in order to glean insights about customers’ intent, and thereby increase conversions for clients. That points toward a future in which financial services firms will increasingly implement behavioral solutions that can fight fraud, authenticate customers, and sell them on more products and services.
Listening to Customers
Another modality that banks have embraced in the fight against fraud is voice recognition. Virtually every major bank offers contact center services for customers who want to manage their accounts over the phone, and fraud has been a longstanding issue in this area due to the inability of operators to see valid ID or other visual proof of a caller’s identity.
Voice recognition offers a compelling solution. Like behavioral biometrics, voice recognition technology minimizes friction; while there may be an initial biometric registration session, voice recognition software can proceed to confirm a caller’s identity without the need for any special action on the customer’s part beyond simply talking to a customer service representative. Not only does this boost anti-fraud security, but it can also enable banks to identify their customers without putting them through the onerous process of answering security questions, thereby improving the customer experience and reducing the time spent on each call.
The clear benefits of this technology prompted one large bank – HSBC – to deploy it as early as 2017, just when voice recognition was starting to gain traction in the financial services sector. More recently, vendors like Nice and Nuance have been busy providing voice recognition technology for financial services customers in Vietnam, Russia, Australia, and Korea over the past year.
Securing the Branch
Finally, a growing number of banks are implementing biometric technologies at the branch itself. In many cases, this relates to internal security. New York’s Orange Bank & Trust Company, for example, recently decided to take advantage of BIO-key’s PortalGuard solution – which supports fingerprint recognition and multi-factor authentication – to secure branch workstations and regulate access to enterprise applications. And earlier this year, IDEMIA provided facial and iris recognition technology to India’s Federal Bank to allow the institution to enable contactless access control and attendance tracking for its employees.
Like the voice recognition and behavioral biometrics use cases described above, these deployments won’t be highly visible to customers, but they’re important examples of how biometric technologies are quietly transforming security in the financial services sector. As for customer-facing biometrics, there are plenty of uses cases beyond selfie onboarding. Panini, a pioneering leader in check capture solutions, recently expanded into the identity space with its BioCred readers that bring fingerprint biometric to the bank branch, and some banks are starting to roll out biometric ATMs that let customers access their accounts using facial recognition, for example. At the bank branch, meanwhile, biometrics can be used for everything from passive customer identification to replacing signatures on sensitive transactions, as HID Global has explained in a recent eBook. These are customer facing deployments, but likewise can enhance a bank’s internal security by guarding against fraud and theft.
Going forward, all of the kinds of biometric deployments outlined above will likely continue to rise in popularity as more financial services providers come to recognize the benefits of these technologies. Selfie-based onboarding may be in the spotlight, but there are plenty of other ways in which biometrics are being used to enhance security and customer service in the space.
Financial Biometrics Month is made possible by our sponsors:
November 25, 2021 – by Alex Perala