In order to remain competitive, financial institutions need to offer secure and convenient authentication solutions. In addition, they must comply with national, regional and transnational legislation. Financial Biometrics will help them meet these requirements. However, determining the appropriate approach to implementation isn’t easy. In this article, we’ll discuss some of the key factors governing the use of this technology in the financial sector.
Trends
The use of biometrics for financial services is expected to reach $11 billion by 2020, according to Goode Intelligence. The firm has compiled data on the adoption of biometrics across the financial sector, and has cited the growing need for greater security and convenience. For example, credit card companies are using biometrics to protect against identity fraud.
Besides improving security and customer service, biometrics can reduce identity fraud, provide a transparent audit trail, and help protect financial data. The growing incidence of financial fraud has led banks to restructure their identity practices, and biometrics provides them with the solution they’ve been seeking. Moreover, many customers expect frictionless access to banking services, and a password-based identity solution doesn’t meet this demand.
Although facial recognition and other biometric technologies have been around for a long time, the financial sector is only now starting to incorporate these technologies. This development is largely due to significant technological advancements, the increased need for remote onboarding, and regulatory requirements such as the US Bank Secrecy Act.
Applications
Applications of financial biometrics include ensuring the authenticity of financial transactions. These technologies provide security and convenience to both customers and financial institutions. These biometrics are more reliable than human agents and reduce the risk of fraud. However, it is important to note that financial institutions must adhere to local, national and international legislations to use biometrics.
The adoption of biometric authentication technology by banks and other financial institutions is increasing. It allows financial institutions to identify customers and protect valuable resources. Financial fraud has become a widespread problem, and biometric technology offers banks a solution. Using face and fingerprint scans, banks can ensure the identity of their customers. Using biometrics to validate the identities of customers eliminates the need to enter passwords and other security measures.
Biometrics is a highly secure and convenient way to make online banking easier. It can also reduce credit card theft. Because biometric enrollment is done directly on the customer, it becomes nearly impossible for anyone else to open an account under that customer’s name. If someone attempted to open an account under the existing customer’s name, a biometric search would reveal who the account thief is.
GDPR implications
GDPR requires companies to obtain consent from the data subject to process biometric data for specific purposes. This consent must be freely given, specific, and “informed.” In addition, companies that use biometrics for non-payment purposes must disclose the purposes and types of processing to the data subject.
GDPR also requires data controllers to perform privacy impact assessments when processing biometric data. This is because biometric data is sensitive personal data. GDPR also prohibits some processing that could be unlawful, but recognizes certain bases as valid to justify processing biometric data. Some of these bases include the explicit consent of the data subject and the performance of specific contracts. Other processing is justified by specific purposes, such as fraud prevention.
GDPR is an important piece of legislation for companies. Companies doing business in the EU must comply with its regulations or risk heavy fines. For example, Facebook’s stock price dropped sharply on March 19, 2018 when it became clear that future regulation would mean lower profits for the company. Companies will need to invest in GDPR-compliant systems to protect customer data. However, many companies don’t have adequate systems in place.
Business applications
Biometrics in the financial industry is a rapidly expanding field. The technology has a number of important benefits for financial institutions. For example, it can provide efficient and convenient authentication methods. It also helps meet regulatory requirements at both the national and regional levels. Moreover, financial institutions will be more competitive if they can offer biometric services that are easy to use and secure.
In addition to reducing fraud, biometrics also help banks keep track of their customers’ activities. This means that banks can keep track of audit trails and monitor customer behavior. It also allows financial institutions to offer virtual onboarding capabilities to customers. In addition, biometrics can improve online banking processing and help banks meet ISO compliance standards.
As digital banking becomes more prevalent, banks are finding biometrics to be an essential solution to ensure a frictionless customer experience. For example, financial institutions can now verify a customer’s identity more efficiently and securely through a fingerprint or face scan, rather than relying on a password or PIN. The technology also protects customers’ identities when using mobile banking services.