The future of global commerce could be a cashless society, many experts predict, and that puts the burden on financial institutions to make sure their customers’ data is secure and protected.
As digital banking rises to replace the more traditional industry, one phenomenon has arisen hand-in-hand with it and that is the use of biometric technologies.
What are biometric technologies?
These are methods of verifying the end-user’s identity via a fingerprint, retinal scan, or even voice recording.
The idea behind these methods is that they use data that cannot be easily replicated – such as the structure of a person’s eyes, fingerprints, and different voice patterns. These examples, among other things, tend to be quite unique and specific to an individual.
Compare this with the PIN and chip system today and you will see why so many financial institutions are willing to embrace a new future, powered and secured by these methods.
According to Gartner, a research and advisory firm that provides market insights and statistics, to leaders in IT and Finance industries, in 2021 the customer experience and the customer-centric model will continue to be one of the main drivers of customer acquisition, reflecting on business growth.
Reflecting on that financial services has become one of the most important verticals for biometric technology in recent years. And the trend grows exponentionaly. Given the dynamics of this sector, it’s worth taking a close look at recent, ongoing, and future developments concerning biometric FinTech in the digital banking services sector.
Yet there are some drawbacks.
We will discuss the advantages of biometrics for digital banking, as well as some of the pitfalls that exist.
1. Advantages of Biometrics in Digital Banking
The most immediate advantage of biometrics over other methods is that it provides a robust level of security that is difficult to find in other systems.
Not only that, but we are simply in the beginning stages of biometrics as a field and option for data protection. Systems in the future will employ layered defense (a.k.a multiple verification points) and will be much harder to penetrate without having very sophisticated methods of doing so.
Another huge advantage of biometrics is that it relies upon things people have with them all of the time including their smartphone.
Unlike chips in cards or other forms of identification that rely upon an external source, biometrics relies upon the end-users themselves as the data point from which they can establish that person’s access to an account.
2. Disadvantages of Biometrics in Digital Banking
As with any system, no matter how sophisticated, there is the possibility that it could be hacked and exploited by nefarious actors in the future. While by itself this is not enough of a reason to overlook biometrics, it should give increased incentive to having the most secure system possible in this area.
Though it is difficult to predict the future, analysts think that the usage of multiple data points, as well as the invention of new, currently unknown methods, will make hacking biometrics systems virtually impossible.
A huge issue with biometric technologies now, as compared to more traditional methods, is that the failure rate is often much higher. The goal is to enable consumers to have the most pain-free process as possible. Throwing up roadblocks to that not only sours customer experience but also contributes to cart abandonment.
Another huge issue is that many of the current biometric technologies that rely upon a smartphone also require that smartphone to operate at a certain efficient capacity. Because smartphone performance varies from user to user, not to mention connection speeds and the problems that come with coding transaction processes in apps, biometric transactions tend to fail more often than not.
Overcoming this means not only reconciling performance variables among smartphones and other devices used but also making the method fail-proof and efficient enough to meet the needs of the always-on-the-go mobile consumer.
We at Monneo believe that the “digital and technological revolution” is already the future of the banking industry and thus we ever since strive to deliver on that. Through our technology platform, we break down legacy barriers and connect online merchants with leading European banks that can provide virtual IBAN accounts and digital payment services around the world. If you are interested to learn more about our services or if you have other specific questions you want to address do not hesitate to contact us or browse our official website for more information.