Biometric technologies are becoming more prevalent in today’s world with consumers expressing increased demand for easy authentication and payment technology. Finger scanning, facial recognition and other biometric verification methods are constantly evolving, however, the use of advanced technology needs stringent security measures.
For financial institutions, advances in recognition arrive at the perfect time, with data breaches dominating the news and biometrics adoption increasing rapidly.
Mobile biometrics has become an urgent security matter—and a critical step for the credit and banking customer experience (CX).
In a new report released by Mastercard – Biometrics: Meeting the challenge of authentication and payments technology, findings were revealed regarding the overall landscape for the short-term future of biometrics as well as an innovating methodology for deploying them.
Many of the findings presented are from the research collaboration by Mastercard and Oxford University, “Mobile Biometrics in Financial Services: A Five Factor Framework”, undertaken to help financial firms advance biometrics adoption more quickly.
“Consumers are driving the trend toward a password-free future where digital identity is all about who we are, not what we remember,” Ajay Bhalla, President, Mastercard Global Enterprise Risk & Security.
High demand for mobile biometrics
93 percent of consumers prefer biometrics to passwords and are looking to adopt the technology.
Over 92 percent of banks are equally keen about biometric technology and want to adopt it for its services.
Despite the advancements and maturity of mobile biometric solutions, the financial industry has been slow and inconsistent in adopting these technologies. One of the reasons for this hesitance is the conflicting guidance that has been provided by technology providers, industry influencers, and the media. This lack of clear direction poses a challenge that the industry needs to overcome.
Bob Reany, Executive Vice President for Identity Solutions at Mastercard, highlighted the importance of addressing this challenge. In an interview with Biometric Update in June 2017, Reany stated, “There has been a lot of conflicting guidance about mobile biometrics coming from technology providers, industry influencers, and the media.” He emphasized the tremendous potential of mobile biometrics in the financial services sector, noting that it can enable the industry to seamlessly integrate optimal security measures with an enhanced customer experience. This combination is a critical success factor that has already revolutionised other industries, such as travel and media.
The financial industry recognises the need to navigate through these challenges and leverage the transformative power of mobile biometrics. By establishing clear guidelines and standards, financial institutions can unlock the full potential of these technologies, enhancing security measures while providing customers with a seamless and convenient experience. As the industry continues to evolve, mobile biometrics are poised to play a significant role in shaping the future of financial services.
In a groundbreaking study conducted by Oxford University’s Department of Computer Sciences in collaboration with Mastercard, it has been revealed that consumer adoption of biometrics in financial services has outpaced the implementation by financial institutions. The research, titled “Mobile Biometrics in Financial Services: A Five Factor Framework,” provides crucial insights into the perceptions and experiences of both end users and financial professionals regarding biometric recognition systems.
The report, which combines quantitative and qualitative research methodologies, encompasses a longitudinal study involving 449 end users of a deployed biometric recognition system in an online payments use case. The investigation analysed the participants’ perceptions before, during, and after utilising the novel biometric system in a financial context over a three-month period. Additionally, a targeted survey was conducted among financial services professionals predominantly involved in consumer banking.
The comprehensive research methodology included an extensive review of scientific, industry reports, regulatory papers, and standards to offer a comprehensive overview and establish best practice guidelines.
The findings of the study shed light on the rapid adoption of biometric technology by consumers, illustrating a significant lead over financial institutions. With an increasing number of individuals embracing biometrics for secure and convenient financial transactions, the study emphasizes the urgency for financial institutions to catch up with this consumer-driven trend.
The demand and adoption of this technology brings opportunity to replace PINs and passwords for better CX and security.
Ongoing data breaches of government agencies, credit bureaus, large retailers and other major organizations have thrown a spotlight on the weakness of forgotten or hacked PINs and passwords. Mobile biometrics now present a major opportunity for financial institutions to migrate away from less secure authentication, while improving CX (i.e., customer experience).
Static passwords have several disadvantages including increase complexity, requiring regular changes, being easily guessable and increases chances of brute force attacks.
The report reveals that consumers have up to 90 online accounts with over 50 percent of passwords used at least twice, 21 percent forget passwords after two weeks and 25 percent of users forget at least one password a day.
In total over one-third of online transactions are abandoned daily due to forgotten passwords.
The report explains that financial institutions may wish to consider a consistent enterprise to manage all touchpoints, as they may have disparate solutions in silos rather than a unified solution. Financial service executives will need guidelines in this regard to bring mobile biometrics to life. “The Five Factor Framework” helps to achieve a consistent enterprise solution by focusing on Performance, Usability, Interoperability, Security and Privacy.
In addition to the full-length research report, we have captured insights in a succinct white paper to help executives understand and deploy biometric technology. Certain factors are more visible to the consumer, having a real impact on user experience, while others operate behind the scenes. Think of the framework as a checklist for financial service companies to reap the benefits of a cross-channel enterprise solution for ease of management and a more consistent consumer experience.
5 factor framework
- Performance – Create frictionless, yet secure biometric solutions by combining low algorithmic error rates with a second factor of device ID for a multi-layered solution.
- Usability – Design a user experience that conveys trust and security while being easy enough to delight even the technophobes.
- Interoperability – Future-proof your solution to work with a range of devices, use cases and methods (face, iris, voice, etc.).
- Security – Minimize your risk by encrypting biometric templates and ensuring they never leave the user’s device.
- Privacy – Use cutting edge protection technologies to preserve confidentiality and anonymity even within an authentication system.
More than 135million people globally have enrolled for services that would use their voice to speed up the authentication process. Clients and customers of banks and financial service companies account for over half of this enrolled population.
The 135 million figure represents an annual growth rate 84 percent during the two prior years. Banks saw a simultaneous increase in efficiencies through reduced call handling times, and even improved first call resolution with greater authentication successes.
Financial executives lack comprehensive knowledge about biometrics, but this knowledge gap can be resolved by utilizing helpful resources like “The Five Factor Framework.” One crucial element that should be emphasized is the widespread implementation of biometrics across various areas, including banking logins, payment authentication, fund transfers, and even call center access. When properly utilized, biometric technology has the potential to enhance the customer experience by ensuring consistency and ease of use, while also providing valuable insights.
The future pace and quality of biometric adoption depends on three factors:
- Consumer installed base: Mobile biometric capability is headed for 100 percent penetration.
- The knowledge gap: 66 percent of companies plan to deploy a biometric system within 5 years. Yet, only 36 percent have any experience with implementing them.
- Methodology: To ensure the best customer experience, banking executives need to focus on Performance, Usability, Interoperability, Security and Privacy.
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