Will Biometric Technology Take Over Banking Security?
If you haven’t heard the news, more banks are adopting biometric technology for customer authentication to increase security. Banks all around the world have been searching for more advanced technologies such as biometrics for better protection against identity theft, fraud, and cyber-crime often perpetuated by stolen customer identities.
Biometrics acts as a strong authentication tool to help secure transactions and also helps to increase customer trust and improve brand reputation. Biometrics in banking has evolved so rapidly across the world that it raises the question as to whether the technology is going to entirely take over banking security. We believe it is.
What is Biometric Technology?
Biometrics in banking are automated methods of recognizing customers through their physiological characteristics and traits such as fingerprints, finger vein patterns, iris, and voice recognition. Biometric characteristics are unique for every individual on the planet and extremely difficult to spoof or forge, which is why the technology is commonplace in high security government operations like border control, prison management, and national ID. Biometric technology is also quickly replacing passwords and token-based electronic access, signature-based branch service access, and personal identification number (PIN) based access in mobile banking and at ATMs.
Why Biometrics for Banking Security?
Many banks worldwide are already using biometrics with their banking system software to authenticate employees and customers — 52 percent being located in Asia. In fact, Japan has more than an estimated 15 million customers using biometric authentication for banking transactions. Banks in Mexico, South America, Africa, and the Middle East are also moving towards the use of biometric identification technology because of its popularity with consumers, and unique ability to offer more security than traditional PINs and passwords.
Besides ensuring security for transaction authentication and employee and customer identification, another reason why banks are quickly adopting biometric technology is because of increasing customer demand. Many people now prefer biometrics for banking security over more traditional forms of authentication. Experts also point to the fact that biometrics is the most secure customer authentication method available.
Biometrics for Know Your Customer – (KYC) Management
In some countries, banks are required to follow Know Your Customer (KYC) policies regulated by the government. The main objectives of KYC initiatives are to prevent criminals from using banking channels for money laundering and fraudulent activities. However, financial and banking institutions are looking at KYC controls to not only meet regulatory requirements but to also cut down fraud and improve overall customer relationships across their products and channels. The major benefits of using biometrics for banking security through KYC Management are:
- Accurate identification
- Quick verification
- Optimum security
- Convenience and ease of use
How Banks Can Use Biometrics
To sum up the importance of biometrics in banking, here are some ways banks can use biometric technology to improve banking security and services, and better protect customer assets:
- Biometrics in branch banking
- Biometrics in ATMs
- Biometrics for internet banking
- Biometrics in mobile banking
- Single sign-on (SSO) form more effective password management
Conclusion
Due to increasing customer demand for banking security, banks are providing more convenient and secure banking services through the use of biometric technology. Biometric technology, integrated with an existing bank software solution is empowering banks to deploy the highest level of authentication security possible. We can safely assume that it is just a matter of time that the entire global banking industry will eventually shift to biometric technology for authentication and security.
