Biometric Security & Password Management in Fintech
Biometric security is revolutionizing the fintech landscape, offering a potent blend of robust protection and user-friendly convenience. As password vulnerabilities persist, fintech startups that integrate biometric authentication stand to gain a significant edge. From facial recognition for account sign-ups to fingerprint scans, these innovative measures promise heightened security and streamlined user experiences. While concerns about privacy and discrimination loom, responsible implementation with opt-in choices ensures a balanced approach.
Biometrics are advancing significantly in more conventional digital financial services from a security perspective. Fintech startups that adopt these security measures may have an advantage since only biometrics can deliver the high degree of security that banks and other financial institutions need with the simplicity that online clients crave.
The success of fintech in online banking
Facial recognition software is now being used by Turkish bank Garanti BBVA to find and sign up new online clients for account opening. Customers may safely open new accounts using their own devices with their mobile onboarding solution, and biometric onboarding with document verification enables new customers to be registered and validated.
In 2022 and beyond, we'll probably witness an increase in this tendency. Our mobile biometric framework at Aware processed nearly five times as many transactions in 2021 as it did in the whole year of 2020. Applications that will improve consumer access to biometric security are constantly being created. The simplicity of use and security that these solutions offer ought to appeal to fintech firms, especially in light of the rise in account takeovers in the financial services industry.
Account takeovers, a kind of identity fraud in which criminals access legitimate customers' digital financial accounts using stolen credentials, increased by 19% in 2020 compared to 2019. Account takeover fraud is extremely profitable for fraudsters and may be damaging for businesses and their consumers because to the massive quantities of securities banks and fintechs deal with on a daily basis. Biometric security measures like face recognition can fend off this
Fintech and limitations of password usage
Because they are something a person owns rather than something they are, passwords are inherently weak. In other words, passwords are simple to hack, prone to malware and phishing, and easy to steal. According to research, consumers frequently use the same passwords for many online accounts. It makes sense since passwords are hard to remember, sometimes extremely complicated, and resetting a forgotten password is expensive.
But this all implies that if a thief obtains login information from a breach, they may have access to many more accounts that use the same username and password. Every day, there are new breaches, and the stolen credentials that have been collected frequently wind up being traded or sold on dark web marketplaces. How would security and advantages for both users and providers increase if access to a fintech or bank wasn't controlled by a password but rather by biometrics?
Biometric authentication and fintech security
Biometric authentication uses a user's unique characteristics, such as their fingerprint, facial features, iris structure, or behavior, to confirm their identification. These variables include distinctive data points that cannot be imitated.
By incorporating facial or fingerprint recognition or other biometric modalities into the fintech app experience, companies can help customers feel more secure about the security of their data and save them time by eliminating the need to remember numerous passwords in favor of just presenting their face, eye, or voiceprint. Since most mobile phones feature fingerprint- or facial-unlocking security options, many consumers are really already familiar with this authentication method.
Despite all the advantages, some biometric technologies, notably face recognition, have recently come under scrutiny for privacy violations. Since your "faceprint" is personal information, many individuals are uncomfortable with the concept of it being shared or used without their permission. This might eliminate the anonymity that many individuals take for granted in public settings, even online. Even the possibility of age, ethnicity, or location-based discrimination has been raised when "connecting" a person's face to another source of personal data, such as social media platforms.
The secret to using face recognition effectively is to do it with multiple safety measures in place, but especially with obvious opt-in and opt-out alternatives. Make sure there is a clear choice for users to select not to save their facial imprint in the app and instead log in with a password or another type of identification if you're using biometric authentication in your fintech app, for instance. Although it's unlikely that many people would select this option, it's nevertheless vital to provide it. It should go without saying, but be sure the biometric authentication system you choose has a track record for accuracy and upholds the highest standards of data security.
What Does This Mean for the Future:
Fintech's reliance on biometric authentication marks a turning point in digital security. With the increasing prevalence of breaches and password-related fraud, biometrics offer a game-changing solution. By leveraging users' unique characteristics, fintech companies can bolster security while simplifying access. However, the responsible use of biometrics is key, with transparent opt-in options and stringent data protection measures. As biometric technology continues to evolve, its integration will likely define the future of secure and user-centric financial services.