Banking on biometrics

Holding biometrics in as high of a regard as a Swiss bank account, Goode Intelligence publishes project results
Banking on biometrics

With customer experience and convenience acting as major drivers for the adoption of biometrics it was only a matter of time until a company started to research the impact this could have on the current IoT and smart city movement. But the question on the lips of everyone here at NCN is how influential could the adoption of biometrics actually be?

With a focus on banking, Goode Intelligence publishes the results to its latest research project: ‘Biometrics for Banking; Market and Technology Analysis, Adoption Strategies and Forecasts 2018-2023 – Second Edition’. The company say the research identifies by the end of 2020, some 1.9 billion bank customers will be using biometrics to do a number of tasks, such as:

  • Withdraw cash from ATMs.
  • Prove their identity when contacting their bank via telephone (both actively and passively).
  • Prove identity for digital on-boarding using their face.
  • Access digital bank services through an increasing number of connected IoT devices including smart home devices and via connected car and smart city services.
  • Authenticate into a mobile bank app using their biometric, either using an embedded sensor or through an app or SDK.
  • And, use a combination of biometric modalities (face and voice for instance) to initiate money transfers when accessing web-based eBanking services.

Biometric vendors are experiencing tremendous growth on the back of the escalation of consumer-led adoption of biometric authentication. The adoption for banking purposes is a major contributor to this growth; and, Goode Intelligence forecasts that by 2023 it will contribute US$4.8 billion in revenue for companies involved in delivering biometric systems to the banking industry. During its research studies the company recognised that biometrics for banking is an increasingly vital part of a bank’s toolkit. With its never-ending task of reducing financial fraud and ensuring that customers can conveniently prove their identity; implementing a biometrics system can result in smarter identity verification and authentication for the customer-first bank.

Alan Goode, founder and CEO of Goode Intelligence and author of the report, says “Biometric technology is being rapidly deployed to support a wide range of banking services, from the traditional – ATMs and branches – to the new banking channels of mobile and IoT. Customer experience and convenience are major drivers for the adoption of biometrics by agile third parties wanting to differentiate their services with each other – it will be an ultra-competitive market and, biometric authentication could be a key differentiator.

“The emergence of new channels is being driven by the Internet of Things (IoT) and we are only at the beginning of a movement that allows bank customers to access banking services from a wide range of intelligent connected devices that include the smart home, smart car and smart city. The availability of secure banking APIs – part of the open banking movement –  is allowing third parties to integrate banking services into their devices and services, allowing bank customers to better manage their day-to-day finances. Biometric technology is fast becoming the glue that binds this technology together – passively verifying a person’s voice while they talk to their smart speaker – allowing them to pull up their latest account balance with a voice command.  Then actively requesting a face or palmprint when the bank’s risk engine decides that a money transfer request is outside the normal risk appetite. For instance, that ride-share through the streets of central London is a riskier transaction than the one initiated at home. This linking of fraud management, adaptive authentication and a choice of passive and active biometric tools, will be key for banks wanting to stay in the game.

“Of course, treating biometrics as an important tool for banks, rather than thinking of it as a silver bullet, is vital in securing digital transformation projects that leverage biometric technology are successful.”

The report investigates the current global adoption with market analysis including key drivers and barriers for adoption, interviews with leading stakeholders, technology analysis with review of key biometric technologies and profiles of companies supplying biometric systems to banks.

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