Prevent Loan Fraud with a Biometric-Based Banking Solution

Bank loans are a popular method of financing for individuals and businesses. Banks provide loans with various terms and interest rates depending on the loan’s purpose, the borrower’s creditworthiness, and the collateral offered. However, loan fraud has been a persistent problem in the banking industry for many years. Fraudsters have always found ways to deceive the banking system and obtain loans using false identities or fake documents. This type of fraud can lead to significant financial losses for banks and lenders. According to the Federal Trade Commission (FTC), in 2020, the total number of reported fraud cases related to credit card and bank accounts was over 406,000 in the US. In recent years, biometric-based banking solutions have emerged as a potential solution to prevent loan fraud.

Biometric authentication for banking 

Biometric authentication technology is becoming an essential tool in the fight against loan fraud. Biometric authentication uses unique physical or behavioral characteristics to identify individuals accurately. Biometric authentication has been proven to be more reliable and secure than traditional authentication methods such as PINs, passwords, and security questions. 

Fast and accurate customer & employee identification by M2SYS

M2SYS is a leading provider of biometric identification solutions for government and enterprise biometric solutions. With over 22 years of experience in the identity management sector, M2SYS has developed biometric solutions that have completely changed the loan-taking procedure at banks. M2SYS provides a biometric identification solution that authenticates customers at the point of service to prevent identity fraud and protect the privacy and a biometric bank employee identification interface from establishing a concrete transaction audit trail.

The biometric bank customer identification solution provides a practical and affordable way to establish customer identification accuracy. This solution works by capturing the customer’s biometric information, such as fingerprints, iris scans, or facial recognition, at the point of service. The biometric information is then matched against the customer’s information stored in the bank’s database to confirm their identity. This process is quick and seamless, significantly reducing the time taken to complete the KYC process. The biometric bank customer identification solution helps comply with government regulations to deliver secure, convenient access to confidential information.

The biometric bank employee identification interface is designed to help banks and financial institutions establish a concrete transaction audit trail. This solution captures the biometric information of employees performing transactions on the back end, such as loan officers, at the time of the transaction. The biometric information is then stored alongside the transaction details, providing an audit trail that can be used to identify any fraudulent activity. This solution helps banks comply with government regulations and reduce the risk of internal fraud.

Security is important for financial institutions.

The M2SYS biometric solution provides several benefits for banks and financial institutions:

1. The M2SYS biometric solution adds accuracy and efficiency to authentication, simplifying the KYC process and securing every transaction.
2. It helps protect personal information and financial data from identity theft and fraud.
3. It saves money and resources from lost or stolen passwords.
4. It seamlessly integrates into existing in-house banking software, making the transition to biometric authentication smooth and easy.

A study by the University of Manchester found that using facial recognition technology in banking transactions reduced fraud by 90%. The study found that facial recognition technology was more effective than traditional methods, such as passwords, as it is much harder to duplicate or fake an individual’s face than to guess a password.

Last words 

Loan fraud is a significant problem faced by banks and financial institutions worldwide. Traditional authentication methods such as PINs and passwords are no longer enough to keep fraudsters at bay. Biometric authentication is fast becoming an essential tool in the fight against loan fraud. M2SYS provides biometric identification solutions that help protect personal information and financial data from identity theft and fraud, safeguard data, save money and resources from lost or stolen passwords while seamlessly integrating into the existing in-house banking software. With the M2SYS biometric solution, banks and financial institutions can prevent loan fraud and secure their customer’s personal and financial information. Contact us to learn more about customized biometric solutions.