How biometric authentication is shaping the future of mobile banking

Biometrics is a way of measuring physical characteristics to verify one's identity. Once it was a form of cutting-edge technology that can only be seen in science fiction movies; however, security is one of the most important issues and the main priorities to move to 2019. With the increase in fraud rates reported, many organizations are being pressured to implement more robust security options and biometric authentication seems to be the answer.

Many Intech analysts predict that the PIN number will be obsolete in the coming years, while others will not agree. Whether the PIN is here to stay or not, biometric authentication is advancing rapidly as many banking institutions are adopting this new form of digital security.

The finger recognition capabilities of Apple and Samsung have allowed financial institutions to confidently adopt Touch ID authentication for mobile devices, allowing users to log in at the touch of a finger. The emergence of biometric solutions provides an additional layer of security beyond the simple password, which measures the specific characteristics of a person, such as voice, handwriting, fingerprints, face, retina or iris of the eye, infrared vein thermos gram or a combination of these identifiers While biometrics still has its flaws, many banks are changing this technology to improve their user experience for mobile banking by offering users more security and convenience.

Along with the increase in fraud, there is the indisputable increase in biometric authentication in the development of mobile applications as banks are reconsidering security. This publication will provide an overview of how biometric factors are influencing the banking industry and how institutions can adopt this emerging technology.

Trends in the biometric landscape 2019.

As billions of customers switch to digital platforms for their banking needs, it is more important than ever for financial institutions to offer an optimized mobile platform to provide fast, hassle-free authentication to log in to accounts and make payments. In the next six years, it is anticipated that the size of the biometric market will reach 24,590 million dollars, and by 2023, there will be approximately 2,600 million users of biometric payments.

Attitudes towards biometric authentication have been relatively positive with 56 percent of consumers who say they rely on their fingerprint to authenticate accounts and mobile payments more than a traditional PIN. In addition, 52 percent of consumers say they are more comfortable storing their biometric fingerprint data on a payment card than in a bank's central database.

Consumers enjoy the convenient process that biometrics has to offer, and major banking institutions are responding with new mobile solutions that provide their clients with seamless access to information and financial services. MasterCard, for example, announced that by the spring of 2019, customers will be able to identify themselves with biometric data such as fingerprints or facial recognition. As compensation, banks that offer MasterCard branded cards must offer biometric authentication or remote transactions along with the existing PIN and password verification methods. Citi Treasury and Trade Solutions (TTS) has also introduced biometric authentication to its customers this year. In the future, Citi customers can log on to Citi Direct BE at desks by using a fingerprint or facial recognition through Citi's mobile application.

Despite being favored for its convenience, the growing popularity of biometric authentication puts technology at risk of becoming a target. The extent of the data breaches in 2018 was surprising. The number of records committed in the first half of the year exceeded the total number of unfulfilled records for the entire 2017 according to the Experian 2019 Data Failure Industry Forecast. Cybercriminals are becoming more sophisticated and the new technology presents a surface of broader and more severe attack. With biometric authentication, data can be modified when it is first registered, and sensors can be manipulated or deteriorated with excessive use.

Here are five main market trends that we can expect to see during this period of growth that will affect the adoption of biometric technology in the banking industry, both from the perspective of the client and from a security perspective.

PINs and passwords are no longer enough

While many banks ensure that their customers' data is secure and protected with passwords and PINs, customers still run the risk of fraud. Companies like Microsoft and Intel are beginning to recognize the pressing need for powerful security and are building biometric authentication systems in their future products. The single-sign-on biometric (SSO) is a password management technology that protects data from unauthorized users. These visionary companies are paving the way for banks to enter the biometric space for mobile banking.

More devices are being built with biometric technical capabilities

According to a study by Gartner, more than 30 percent of mobile devices currently use biometric authentication as a security system. The number of mobile devices with biometric integrations is growing rapidly and something that banks should see as an opportunity rather than a barrier to adoption.

Biometric modes of security and convenience.

There are different modes of biometric authentication that institutions can adopt, such as fingerprints, voice, retina, heartbeat, facial recognition, etc. HSBC recently introduced the fingerprint and Touch ID in its mobile banking application, and many other banks will follow it. This eliminates the inconvenience of remembering passwords and suffering the dreaded lock of the account after many password attempts. With this new technology, users have enhanced UX with greater comfort and security.

Biometric technology that influences other platforms

Apple Pay makes mobile POS payments on smartphones increasingly secure by using fingerprints with Apple Touch ID and face recognition to verify a user's identity. Previously, Touch ID was limited to the app store, iTunes purchases and device unlock. This new security method caught the attention of banks that are now integrating Touch ID for users to access their mobile banking services. Some of the banks that have already adopted Touch ID include American Express, ING Direct (now Tangerine) and HSBC.

Multifactor for a powerful security guarantee

The use of PINs and passwords as the only security option positions consumers as easy targets for fraud. Many organizations are now considering multi-factor authentication (MFA) by combining a fingerprint with retina, voice or facial recognition, for example. MFA makes it extremely difficult for a hacker to infiltrate customer accounts.

Biometric modalities

Biometric identification methods can be achieved on mobile devices either through their built-in biometric sensors, attaching portable biometric hardware through a USB cable or through a Wi-Fi connection. Here are some biometric methods that banks are already taking advantage of:

Iris scan:

This mode contains more than 200 unique data points that are stored in the institution's database. Many biometric experts believe that iris scanning is the most reliable way to authenticate a user's identity.

Speech recognition:

It is said that this option works best when it is paired with another authentication mode. Earlier this year, HSBC announced an introduction to mobile applications and voice recognition ATMs to allow customers to conduct banking transactions without the need for passwords or cards.

Facial recognition:

Face recognition can authenticate users at ATMs, as well as mobile and online banking. This type of authentication depends on the user's environment, such as lighting or face position, which makes it a less effective security option.

Fingerprint scan:

Fingerprint scans are currently the most popular form of biometric authentication used on many devices around the world.

Vein pattern authentication:

Authentication of the vein pattern is based on the unique pattern of veins in the palm, finger or eye to identify a user. The user's vein patterns are as unique as their fingerprints, but not so easy to replicate.

These biometric authentication modes can be used in a variety of banking scenarios, including withdrawing and depositing cash from ATMs, testing identity by contacting your bank, and generally authenticating mobile banking applications. With the advance of biometric technology, passwords, PINs and security questions are becoming obsolete. Financial institutions are aware that security is never guaranteed with any method, but they must choose the best available solutions to protect their customers, as well as themselves.

Why adopt biometric technology now?

Since Apple launched its Touch ID and Samsung introduced its fingerprint scanner, the use of physical features as a form of authentication to access user data has proven to be very successful.

Financial institutions have the opportunity to optimize their user experience; users will not have to remember passwords and usernames, simplifying their lives. In addition to this, biometric authentication cannot be hacked, shared or forgotten, so customers take advantage of the opportunity to use biometrics instead of traditional authentication methods. This technology is particularly ideal for the financial sector, since it satisfies the constant need of banks to protect their customers' information.

The success of biometrics has proven to be extremely valuable in mobile app development, but it is the financial sector that has been particularly slow to adopt. Despite reasonable concerns regarding the safety and security of mobile banking customers, biometric technology will be the definitive change for authentication: reducing the fraud rates of one fingerprint at a time.