Biometrics is the term which combines technologies that allow you to recognize a user by their biometric data (fingerprint, retina, face image, and so on).
How do financial institutions use biometrics?
For remote identification of new customers through a single database.
Clients need to visit the bank branch once and hand over their data. After that, system users can remotely become clients of other banks without visiting the office and providing their passport. For banks, this becomes an opportunity to attract new customers in the regions of absence. The user can become a bank client without leaving home, which is especially important for people living in remote areas of the country, as well as for people with disabilities.
Biometrics for customer identification.
Biometrics simplifies the customer journey, as physical channels and contact centers do not require a passport or identity card.
Many leading banks use biometrics instead of documents. This technology recognizes customers at the entrance to the branch, confirms transactions, and also helps create the best customer offer.
This way of using biometrics speeds up service and boosts sales.
Use of biometrics for security.
Banks use biometrics to combat fraudulent transfers. The technology helps to recognize a fake or lost passport and to confirm atypical client transactions, such as transfers to other people’s cards, paying for online purchases, closing a deposit earlier using a selfie in a mobile application.
Biometrics instead of a card.
A relatively new direction in the development of technology is bioacquiring.
With it, you can pay for purchases by scanning your face, just by looking at the camera (biometrics is tied to a card or account).
This allows customers to pay for purchases faster, and stores to reduce their costs.Biometric systems are a reliable and proven mechanism for increasing the security of remote interaction between clients and organizations.
Today, the client can choose different methods of identification: a simple PIN or password, a fingerprint, voice recognition, video verification, etc. None of the methods provides 100% protection against the actions of intruders, and biometrics is no exception. However, using biometrics as a second or third factor of authentication can greatly increase data security and improve the customer experience because the customer is not required to remember complex passwords.
In the pandemic year of 2020, when it became necessary to transfer all types of banking and other services to a remote format, the demand for biometrics increased. There was a high demand for remote identification when opening a new bank account online, using financial services, verifying accounts.
According to KPMG’s 2019 Global Bank Fraud Survey, 67% of banking leaders are investing in physical biometric tools – voice, fingerprints, facial recognition. The most advanced organizations are already developing more sophisticated behavioral biometrics, which is a set of characteristics unique to each user, allowing user profiling and fraudster detection.
Looking at the world experience in biometrics, it is primarily used for registration services for bank new customers and verification of existing ones.
Some examples of such systems are:
– Indian biometric system Aadhaar, which contains more than 1.2 billion templates of biometric data of the country’s inhabitants (fingerprints, iris) to date and is used for government and banking services;
– South African ABIS system with samples of fingerprints, irises and photographs of users, which is used for social and financial services;
– Thailand’s Digital ID system, which allows customers to open bank accounts remotely using facial recognition technology for secure processing.
