The introduction of biometric identification has impacted various business verticals, including banking and financial services. The world of banking, insurance, and financial services is built on risk management and a complex patchwork of state and federal legislation. With security threats constantly evolving in this space, the use of biometrics in financial services is on the rise. The biometrics market in the financial services and banking sector is estimated at $999.3 million USD in just the United States alone.
The COVID-19 pandemic has changed our everyday activities in ways we never could have imagined. One of those changes is a push by the banking and financial sectors to rapidly implement biometric security measures to authenticate individuals. The pandemic impacted millions of people who could not visit banks to open a new account or even speak to representatives. As a result, the industry needed a security solution that could be deployed remotely and quickly to authenticate an individual’s identity so they could carry out their banking and insurance services without putting themselves at risk.
The Future of Biometric Technology in Financial and Banking Services
The current risks involved in entering a physical bank are high for both customers and employees. Customers were eagerly waiting for a solution where a simple activity such as opening a bank account or brokerage account does not require three forms of identity checks or complex passwords that are not only difficult to comply with, but impossible to remember, forcing people to resort to insecure methods, like writing them down.
Highly tested AI algorithms and biometric authentication technologies are proven to be more secure than passwords or cards. Using touchless biometrics, such as face, are more effective than fingerprint scanners as they can be recreated using creative approaches. Customers have also reported a preference towards managing accounts through a website or an application rather than physically visiting the bank. Thus, you can say that the need for biometrics in the finance and banking sector for remote and secure authentication is here for the long run.
Legacy security processes have also added to the growing bill. Almost 10% of the world’s top financial institutions spend 100 million USD on KYC and customer due diligence annually. These numbers are most likely to shrink as biometric authentication takes over an inefficient and labor-dependent identification process by storm.
Benefits of Biometric Identification in Finance and Banking
Whether it’s financial institutions or customers, biometrics in finance is a win-win for everyone, including:
- Fast and accurate identification
- Fraud protection
- Increased security in mobile banking
- Reduced IT and customer support costs associated with password resets, lost tokens, and other inefficient methods
Conclusion
Financial institutions are improving and speeding up their adoption of innovative security technologies that meet regulatory requirements, are cost-effective, and keep customers happy. Biometric authentication is a proven solution that fits the criteria. Used by the defense industry for decades, it’s now being deployed widely in these challenging times. If you are looking for a complete biometric identity solution, try for free today!