Financial Services Needs Biometrics—and Expert Guidance, Report Suggests

Now is the time for financial services institutions to “start planning for the transformation” of their security architecture from systems based primarily on passwords to those rooted in biometrics, argues a new report from The Financial Brand.

The Shift Toward Biometric Authentication

The article, authored by Liz Froment, surveys a general and growing enthusiasm for biometric security in the financial services sector. Citing data from PYMNTS, the article notes that three times as many consumers access their online accounts through mobile devices, and that biometrics is “by far the most preferred” authentication method. It also notes that 75 percent of consumers fail to follow password best practices, such as by using the same weak password across multiple accounts.

Biometrics offer a solid solution, being less susceptible than passwords to theft and offering streamlined ease of access to online accounts.

“Tokens and biometrics offer a more streamlined and user-friendly experience, providing quick access to accounts and reducing friction during login,” said Wipfli Financial Services Practice Leader Anna Kooi. “Say goodbye to forgotten passwords and account lockouts. Biometrics and tokens can enhance customer satisfaction by minimizing these common pain points.”

Addressing Security and Privacy Concerns

But while financial services professionals like Kooi appear to be very much in the pro-biometrics camp, they also pointed to areas of concern that must be addressed in their comments to The Financial Brand. Security is still an issue, for example—even if biometrics are stronger than passwords in this regard.

“Biometric systems can be vulnerable to spoofing attacks, and banks are addressing this by using multi-factor authentication (MFA), combining biometrics with tokens or passwords for added security,” noted David Donovan, the EVP of Financial Services at Publicis Sapient.

Privacy and data protection are also serious issues, Wipfli’s Kooi noted. “Banks must handle biometric data responsibly and transparently,” she said. “Transparency in data handling and clear communication about security measures are paramount for successful adoption.”

The Future of Biometric Authentication in Banking

Kooi went on to add that banks “need a method for securing biometric data and a fallback mechanism, like PINs, in place in case biometrics fail.” It’s an assertion that might get some pushback from biometric authentication experts, who could argue that offering a PIN-based failsafe simply reverts back to a less secure form of authentication.

Moreover, biometrics firms have been allocating more time and money to the development of liveness detection and anti-spoofing systems that are specifically designed to counter presentation attacks, which remain the only serious threat to biometric authentication mechanisms.

Biometric Security Trends and Insights

The report thus gestures to the deeper discourse around biometric security in financial services that is now underway, which involves the kinds of technological trends and architectural considerations that will be detailed in FindBiometrics’ forthcoming Financial Services Biometric Digital Identity Prism, for which data is currently being collected.

Some of the most salient of these dynamics will also be discussed in the FindBiometrics “Year in Preview” online event slated for March 20, which aims to look at the most important trends that are shaping the year to come.

As The Financial Brand‘s overview shows, there is considerable excitement about biometrics in financial services even as there remains a need for clarity on the considerations and practices that come with the technology. “Explaining the why behind biometrics, as well as the security benefits, along with continuing education and support, can help pave the way for more widespread adoption,” the report asserts.

Source: The Financial Brand

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February 27, 2024 – by Alex Perala