Biometrics has let banks revolutionize their customer relationships. From using Face ID to unlock mobile apps or fingerprints for authorizing in-store payments, biometrics are now taken for granted in our financial lives. It has also changed how financial institutions do business in ways that are equally revolutionary, although not nearly as noticeable.
Know Your Customer
Know Your Customer regulations, aimed at preventing money laundering, are becoming stricter, and banks are deploying biometric identity verification solutions, typically fingerprint recognition, to keep up with the changes. Fingerprints provide a way to quickly and accurately identify a customer against a pre-existing database when high-risk account services are requested, or against a national database when opening a new account in countries that maintain them.
Improving Branch Security
Using biometrics on-premises to monitor customers is quickly becoming more commonplace. Retail stores have tested using facial recognition for customer loyalty programs – welcoming frequent shoppers and recommending sale items to them. But banks are entering this arena as well. In 2015, one bank was able to identify potential “scammers” who had entered a branch to open fraudulent accounts thanks to heart rate and thermal imaging sensors installed as part of its security system. A new customer, smuggled into the country by a criminal organization to open an account for money laundering into the United States, set off red flags by showing telltale signs of stress.
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Customer Recognition in Call Centers
For some banks, our voices are a critical biometric for improving customer service. One of the biggest hassles of calling a bank is verifying you’re you by dialing in your account number or answering a series of secret questions – neither of which actually prove who you are. In 2016 Citibank Taiwan launched a pilot program to recognize customers by their voices, with similar deployments happening across the globe at banks large and small. Voice recognition helps to avoid the hassles of knowledge-based authentication to identify customers naturally during the call. While this is a significant improvement in user experience, voice biometrics can present challenges as background noise, or whether or not the caller has a cold, can affect its accuracy.
Safe Deposit Box Access
One of the classic depictions of a bank is the massive vault, holding cash and other valuables inside. While most banks have upgraded to being mostly digital, there’s still one holdout from that era – the safe deposit box. But some banks are even bringing the deposit box into the 21st century by deploying biometrics for customer access. Customers can enroll their biometrics when they purchase a safe deposit box and then use it to prove who they are whenever they want to access the box again in the future. Higher-tech facilities even have boxes that unlock with a fingerprint, rather than the old two-key system, for an added touch of security.
Of course, banks aren’t only deploying biometrics for their customers. Many financial institutions across the globe are investing in biometric authentication internally as well. Some banks are replacing passwords at employee terminals to improve identity and access management. Others require biometric authentication for high-value funds transfers, verifying who authorized the transfer.
For banks that aren’t ready to fully embrace biometrics, they can also layer it on top of passwords as a second factor for multi factor authentication. Regardless of how biometrics is being deployed though, it is abundantly clear that there’s a demand for the technology. A recent report found that the global fingerprint market will grow considerably over the next five years, from $3.86 billion in 2017 to $6.51 billion in 2022, driven by a rise in the need for combating identity fraud in financial services and other industries.
Banks need to deliver the technologies their customers don’t just want, but expect, to use, and biometric authentication is at the top of the list.