Biometrics: which purpose for the banking sector?

 

 

“Compte Nickel”, contactless payments, mobile banking, etc. are some examples of the numerous banking services which arose from fintechs and digital breakthrough. They bring both a significant step forward in terms of comfort and accessibility for the customer, as well as new challenges for the banking industry players. Providing transactions security and improving customer experience are among the main areas of development and strategic thinking for financial institutions; this led them to pay a closer attention to opportunities offered by biometrics. , We see an increasing number of initiatives and innovations in this fast-developing sector.

 

Contactless will replace checkbooks and confidential codes

Contactless payment has emerged in recent years as a real alternative to the traditional range of payments. This quickly attracted mobile phone players who had been fast to offer their mobile payment solutions. Nevertheless, in France, the interest in Apple Pay, Orange Cash or Lyf Pay is not as strong as expected. Indeed, if other countries like Japan (where nearly one person in two has already experienced this type of service) are fond of it, the French are much more committed to their bank card and continue to carry out most contactless transactions with this type of payment.

According to a survey performed by Harris Interactive in November 2016, only 6% of interviewees had already used their smartphones as a means of payment, while 82% of cardholders who have a contactless featured card had the opportunity to use it.

These two options however remain used for small amount daily expenditures for obvious security reasons; while Apple Pay allows to carry out transactions up to 300 euros, contactless payments by card is most of the time restricted to about thirty euros.

To fight fraud, robbery or bank cards hacking more efficiently, industry players decided to use technological innovations, and in particular, biometrics.

 

Authentication systems more or less reliable

Morphological analysis can be carried out using fingerprints, eye iris, vein networks of retina or hand palm, or hand morphology and facial features.

The means of identification most commonly used by banks remain at this stage   fingerprints. However, in order to benefit from a service based on a fingerprint recognition system, the client must go to his bank branch to proceed, with the assistance of an advisor, to a fingerprints scan. The latter then provides a box that will serve as a biometric reader when checking in or making a transfer. In the same vein, Crédit Mutuel Arkéa, Société Générale, BNP Paribas, Crédit Agricole and BPCE have democratized and simplified the contactless mobile payment with biometric fingerprints authentication through the “Paylib” app.

 

Another major innovation is voice recognition, which is considered more reliable and more flexible than fingerprint. The CNIL gave the go-ahead to La Banque Postale to deploy the “Talk to Pay” solution and allow automatic online payment with a mere speech recognition device. The customer will thus be able to operate and manage certain transactions with a simple phone call. This breakthrough is part of the features already deployed to reduce the risk of card fraud, particularly regarding remote payments which represent less than 12% of card payments and yet two thirds of frauds.

These biometric solutions make secure contactless payment possible and it is becoming more and more prevalent. According to a study carried out by Visa in July 2016, Europeans are particularly interested in the use of biometrics: 53 % of interviewees were in favor of scan and fingerprints authentication.

 

However, there are still some obstacles to overcome. First, the use of an authentication connected object (mobile, specific box) can be a constraint for the client who may lose it or face network issues when it is time to pay. Then, fingerprint verification cannot be sufficient to identify an individual with certainty. Moreover, some authentication methods are more reliable than others: for example, facial recognition or palmprint have a greater reliability than speech or fingerprint recognition. To be truly efficient, these biometric methods should ideally be combined with another means of authentication.

 

 

Source : Morpho

 

Given the present stage of technology and in spite of a great potential, biometrics cannot be considered as a fully reliable technology and shall be limited to non-sensitive banking operations. Moreover, biometric data can be stolen and hacked with far more dramatic consequences than a traditional piracy. Indeed, if resetting and changing a password is quite common, changing fingerprints or irises is not an option.

 

Facilitating customer experience while protecting data…

The future challenge of banking industry is to facilitate the customer’s experience while maintaining a high level of reliability and security. This will definitely involve a strong authentication that does not require the use of a phone or a box (like facial or palm recognition). Biometric data security topic will become critical. The good news is in comparison with Apple, Orange, Samsung, Facebook or Alibaba on issues related to data protection and fight against cybercrime, banks have a recognized know-how, a renowned expertise and a high level of overall confidence and trust among its clients…

 

[Automatically translated by Lingotek]

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