For years, the financial services sector has been one of the most exciting areas of innovation and adoption with respect to biometric technologies. Some of the biggest trends in the overall biometrics industry – such as selfie-based authentication – have become particularly prominent in the financial space, where major institutions have been looking to stay competitive with tech-savvy challengers.
That’s why for the past month we’ve dedicated special coverage to financial biometrics. A lot of ground has been covered, and with October coming to a close, it’s time to look back at some of our key insights.
New Challenges, Incoming Threats
We began our featured coverage by addressing the elephant in the room: COVID-19. Needless to say, the pandemic has had a dramatic effect on the financial services sector, though in some ways it has been “disruptive” in a very positive sense, accelerating progressive changes that were already underway.
Selfie-based onboarding, for example, was already gaining momentum going into 2020. But with the pandemic and associated lockdown measures pushing bank customers into online channels in droves, financial services organizations’ interest in remote onboarding solutions has skyrocketed, especially when it comes to low-friction systems that compare end users’ selfie photos to their official IDs for identity verification.
Likewise, a heightened need for cybersecurity has helped to further popularize the kinds of behavioral biometrics systems that can automatically detect the signs of potential fraud in online user behavior. This is the other major prong in the financial sector’s security strategies to face new challenges and counter incoming threats.
What’s Next for Payments and the Future of Money?
From there, we looked beyond COVID to see what’s in the pipeline for payments and money. Biometric technology is already helping to propel the rise of mobile-based payments today, and that trend is expected to accelerate in the wake of a pandemic that has pushed consumers further away from the use of cash. And on that note, we’re also starting to see the emergence of biometric contactless payment cards. A number of major financial and biometrics players have been quietly developing these fingerprint-scanning solutions in recent years, and many now expect to see large-scale launches next year.
Looking even further ahead, we might catch a glimpse of an even more radical innovation in the future of payments: so-called “naked payments” in which a given biometric is directly tied to a payment account. This means that there is no need for cash, cards, phones, or any other physical token to conduct a transaction. It’s a novel concept that has been explored on a tentative basis for a few years now, and could see a rising profile now that Amazon is making a big investment in this tech.
Fresh Business Models and Next-Gen Infrastructure
Our next feature brought us back to the near-future. Taking the position that serious crises open the door to opportunities for substantial change, the feature looked at what financial services organizations can start working on tomorrow to reshape their infrastructure and operations for the better.
Call centers, for example, can take advantage of voice recognition technology to burnish security at a time when volumes are on the rise. These kinds of biometric solutions have existed for years and have been embraced by a relatively small number of banks; but now, COVID-19 has put a spotlight on the call center touchpoint and its vulnerabilities, which could prompt many more forward-thinking financial services organizations to embrace the technology.
Then there’s the need for change at the level of ATMs. Customers don’t want to touch shared surfaces, and PINs never offered much security in the first place. Here, again, is an opportunity to implement biometric authentication that would allow customers to securely access a kiosk without the need to insert a bank card or press in a PIN code – and ATM makers have solutions in the works.
Financial Institutions in the Era of Biometrics-Driven Digital Transformation
Finally, our Financial Biometrics Month Special Event concluded with a thoughtful discussion amongst an expert panel comprising some of the biggest names in biometrics. FacePhi CEO Javier Mira, Onfido CEO Husayn Kassai, and BioConnect VP Julia Webb all shared their insights on a range of topics, from the most pressing security threats in financial services, to opportunities presented by the “new normal”, to biometrics at the bank branch. Moderated by FindBiometrics President Peter O’Neill, the discussion was recorded for the ID Talk podcast, and is available wherever podcasts can be heard.
It’s a fitting conclusion to the Financial Biometrics Month Special Event, perhaps especially for its expert forecasts about what’s coming next. Biometrics have been booming in the financial services sector for years, and 2020 has only set the stage for more exciting innovations and transformations to come.
October 30, 2020 – by Alex Perala