Biometric Verification in Fintech: The Future of Secure Online Transactions

Financial institutions (FIs) or Fintechs have historically been hotspots for fraudulent activity. The sector is a popular target for identity theft and online banking fraud, as well as financial crime such as money laundering and terrorist financing. But in the previous decade, security has grown dramatically. It now moves on to the next level of sophisticated security, Biometric Verification.

Biometric verification seemed to be a future technology that would take time to develop and become a part of our daily lives a few decades ago. But technical advances in the development and deployment of these systems to detect each person’s unique characteristics have made fiction a reality far sooner than expected.

Nevertheless, the security of existing authentication mechanisms is in doubt. Passwords can be easily hacked or guessed using personal information routinely provided online, especially on social media. It is also true that the top 20 PIN combinations in the world account for more than 25% of all four-digit passwords in use.

Therefore, FinTech companies are seeking ways to simplify procedures while improving security-picked biometrics, especially facial biometrics such as Face Match and Face Trace, which leverage AI and ML technologies to be accurate while maintaining user speed. Biometric technology, according to industry leaders and experts, is the best option for a simple consumer verification procedure in mobile banking, retail and other industries.

What is biometric verification?

Biometrics is the accurate verification of the user based on their inherent physical or behavioral characteristics. To reiterate, it requires identifying patterns unique to each individual, such as face, voice, fingerprint or vein pattern, and using them to identify service users of all types during identity verification.

Because these patterns are impossible to replicate, they are suitable for protecting sensitive processes such as electronic financial transactions. Biometric technology is used by fintech firms to overcome the challenges of anonymity on the internet, including social media, as well as to provide simple and practical solutions for their customers and workers’ daily operations.

How is biometric verification used in Fintech?

Biometric technology uses biological data for authentication, such as voice recognition or fingerprint with Touch ID. The human features used for identity verification are different and specific to each person. Due to the fingerprint and facial recognition capabilities of smartphones, many of us are already familiar with biometric technology. Biometric verification is an ideal choice for the banking sector due to its security and simplicity.

Biometric technology can be used to validate a customer’s identification at any point in banking. For example, biometrics can be used to:

• User onboarding: A consumer’s identification is first verified by registering their face before they are registered as a customer.
• Identity verification: Customers can use the validated data when using the platform for payments, withdrawals or other operations.
• Compliance check: Specific regulatory compliance requirements require the use of identity verification using AML screening and KYC Onboarding, either for global sanctions screening or PEP screening against watchlists.

What are the modes of biometric verification for Fintech companies?

Humans have genetic data that is unique to them. Since biometric verification providers such as IDcentral rely on such data to enable secure access, biometric verification has multiple means of authentication.

Fingerprint recognition

Smartphone apps can quickly scan and digitize a fingerprint, making it a convenient choice. Because it requires less equipment and is an easy way to validate one’s identification, fingerprint recognition is widely used in mobile banking and branch banking.

Face Match

Facial recognition, also known as Face Match, is a technology that recognizes a person’s face based on the relative location of facial features using 3D sensors and computer algorithms. This approach is becoming more common, although it requires the use of several non-universal technologies.

Iris Scan

Iris scanners study the intricate color and line patterns of the iris. Some iris scanners are even available on mobile phones and are easy to install in permanent areas such as ATMs.

Because fintechs mainly rely on mobile banking, iris authentication will be impossible for them to implement.

What are the benefits of biometric verification?

Biometrics has a lot of potential in the FinTech industry. Among the most notable benefits of biometrics in the financial sector are:

Fast and reliable identity verification

Biometric technology allows customers to be authenticated correctly and quickly. The customer’s identity is validated in seconds, which benefits both the consumer and the bank.

Improved fraud protection

Because papers can be forged or stolen, biometric authentication relies on differentiating qualities to prevent online banking fraud. As biometric technology develops, it will provide a highly secure method of verifying the identity of bank customers.

Lower operating expenses

Since biometric data removes the need for additional equipment or human operators, financial institutions can drastically reduce their operating costs.

Transaction management from any device

Customers can control their financial transactions with the help of biometrics from any device and from any location, providing the utmost convenience. Transactions will be safer due to biometric verification, as well as easier because they can be completed from anywhere with an internet connection.

Reduced fraud

The use of biometrics in banks helps to avoid insider fraud and cyber attacks. Biometric technology helps banks develop secure employee authentication while providing a detailed audit trail of every transaction. When users use online banking, it also secures their identity.

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*** This is a Security Bloggers Network syndicated blog from IDcentral written by Sumanth Kumar. Read the original post at: