Financial institutions (FIs) or Fintechs have historically been hotspots for fraudulent activity. The sector is a popular target for identity theft and online banking fraud, as well as financial crimes such as money laundering and terrorism funding. But, in the previous decade, its security has grown dramatically. It is now progressing to the next level of sophisticated security, Biometric Verification.
Biometric verification appeared to be a future technology that would take time to develop and become a part of our daily life a few decades ago. But, technical advances in developing and deploying these systems to detect each person’s unique characteristics have made fiction a reality far sooner than expected.
Yet, the security of existing authentication mechanisms is in doubt. Passwords may be readily hacked or guessed using personal information that is routinely given online, notably on social media. It’s also true that the top 20 PIN combinations in the globe account for more than 25% of all four-digit passwords currently in use.
Hence, FinTech companies seeking methods to simplify procedures while simultaneously improving security picked biometrics, particularly facial biometrics like Face Match and Face Trace, which leverage AI and ML technologies to be exact while also maintaining user onboarding speed. Biometric technology, according to industry leaders and experts, is the greatest alternative for a simple consumer verification procedure in mobile banking, retail, and other industries.
What is Biometric Verification?
Biometrics is the precise verification of user based on their inherent physical or behavioural features. To repeat, it requires identifying patterns unique to each individual, such as the face, voice, fingerprints, or vein pattern, and utilising them to identify service users of all types during identity verification.
Because these patterns are impossible to replicate, they are suitable for protecting sensitive processes such as online financial transactions. Biometric technology is being used by fintech firms to overcome the challenges connected with anonymity on the internet, including social media, as well as to provide simple and practical solutions for their customers and workers’ everyday operations.
How is Biometric Verification used in Fintech?
Biometric technology employs biological data for authentication, such as speech recognition or touch ID fingerprints. The human features used for identity verification are different and specific to each person. Because of our smartphones’ fingerprint and facial recognition capabilities, many of us are already familiar with biometric technology. Biometric verification is an ideal choice for the banking sector because of its security and simplicity.
Biometric technology may be used to validate a customer’s identification at any time in the banking business. For example, biometrics may be used for:
- User Onboarding: A consumer’s identification is initially confirmed by recording their face before they are enrolled as a customer.
- Identity verification: Customers can utilise the validated data when they use the platform for payment, withdrawal, or other operations.
- Compliance Screening: Specific regulatory compliance requirements necessitate the use of identity verification using AML screening and KYC Onboarding, either for global sanction screening or PEP screening against watchlists.
What are the modes of Biometric Verification For Fintech Companies?
Humans have genetic data that is unique to them. Since that biometric verification providers such as IDcentral rely on such data to enable secure access, biometric verification has several means of authentication.
Smartphone apps can quickly scan and digitise a fingerprint, making it a convenient choice. Because it takes less equipment and is a simple way to validate one’s identification, fingerprint recognition is widely utilised in mobile banking and branch banking.
Face recognition, also known as Face Match, is a technology that recognises a person’s face based on the relative location of their facial features using 3D sensors and computer algorithms. This approach is becoming more common, although it requires the usage of several non-universal technologies.
Iris scanners study the intricate colour and line patterns of the iris. Some iris scanners are even accessible on mobile phones and are easy to install in permanent areas like ATMs.
Because fintech relies primarily on mobile banking, iris authentication would be impossible for them to implement.
What are the benefits of Biometric Verification?
Biometrics have a lot of potential in the FinTech industry. Among the most notable benefits of biometrics in the finance sector are:
Fast and reliable identity verification
Biometric technology allows customers to be authenticated properly and promptly. The customer’s identity is validated in seconds, which benefits both the consumer and the bank.
Improved Fraud Protection
Because papers can be falsified or stolen, biometric authentication depends on differentiating qualities to prevent online banking fraud. When biometric technology progresses, it will provide a very secure method of verifying identities of banking clients.
Lower operating expenses
Since biometric data removes the need for extra equipment or human operators, financial institutions may drastically cut their operational costs.
Transaction management from any device
Clients may control their financial transactions using biometrics from any device and from any place, giving the utmost ease. Transactions will be safer because of biometric verification, as well as easier because they can be completed from any location with internet connectivity.
The use of biometrics in banking helps to avoid insider fraud and cyber-attacks. Biometric technology helps banks develop secure employee authentication while also giving a detailed audit record of every transaction. When users utilise online banking, it also secures their identities.
Try IDcentral’s Face Biometric Verification Solution with AI Integration
Sumanth Kumar is a Marketing Associate at IDcentral (A Subex Company). With hands-on experience with all of IDcentral’s KYC and Onboarding Technology, he loves to create indispensable digital content about the trends in User Onboarding across multiple industries.