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The Evolution Of Biometrics In the Banking Sector

Biometric identifiers are almost seemingly impossible to replicate and there are several options available when it comes to implementing them.

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The banking industry today is one of the most important sectors in India due to the role it plays in the daily lives of the steadily increasing working population and their growing disposable incomes that have raised the demand for financial services. Recent studies show that the digital payments system in India has evolved the most among 25 countries, including the UK, China, and Japan. 

Globally, banks today are undergoing rapid digital transformation, striving to derive greater benefits such as enhanced synergy, cost take-outs from economies of scale, organizational efficiency, mitigating cyber risks, etc.; the latter being among the top priorities. Given the enormous amounts of cash and consumer data banks deal with, it has become a top target for hackers. As frequent headlines of data breaches suggest, banks constantly face threats of financial losses, regulatory consequences, and reputational damages. Further, fraud has been spurring bank employees and customers alike, compelling banks to strengthen their security architectures many-folds. There is no doubt in the fact that banks and financial institution must be fully cyber-secure from the inside-out. 

The above scenario has led banks to adopt various mechanisms such as hardware tokens, software tokens, CAPTCHA, OTP, and biometric authentication that have proven to be a strong measure in mitigating cyber attacks and fraud while greatly improving security.  

Biometric identifiers are almost seemingly impossible to replicate and there are several options available when it comes to implementing them. Banks could choose multifactor authentication and require users to provide a combination of biometric identifiers to reduce the potential of fraud by a very large margin. Today, banks in India are going to great lengths to use biometrics at its full potential with fingerprints, voice patterns, iris scans, and facial geometry being some of the most widely used biometric parameters.  

Artificial Intelligence Coupled with Biometrics 

Over the years, physical signatures have been replaced by modern biometrics and have further evolved due to the advent of Artificial Intelligence (AI). With the use of AI, it is now possible to monitor behavioural anomalies and prevent security threats with much more precision. With this technology, it is now easier to recognise activities by bots and hackers. For example, American multinational financial services corporation Mastercard recently acquired NuData Security Inc. to enhance the security of the Internet of Things (IoT) and prevent online and mobile fraud using session and biometric indicators. 

Closer to home, neoEYED, a Bengaluru based start-up provides a similar service that deploys an AI system that can analyse a user’s pattern of logging in and out of their accounts. If an impersonator tries to log in to a user’s bank app, the system can detect the anomaly and alert the user instantly.  

At present, attitudes towards biometric authentication are turning more positive with 56 per cent of consumers saying that they trust fingerprint over a traditional PIN to authenticate card payments. In the next 6 years, the global biometric market size is anticipated to reach $ 24.59 billion and by 2023, there will be roughly 2.6 billion biometric payment users.  

While biometrics might be more secure than passwords, the hacker community’s capabilities should not be underestimated. Hackers have been known to make dummy fingerprints and use selfies that they can easily find online to hack into accounts. For now, a multi-factor approach that uses biometrics and a PIN would seem to be the best approach to go about it. However, as time passes by, we are bound to see great evolution in the field as well the threats it could face; because security needs to constantly evolve because threats don’t stop coming by.  

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

Sudhir Babu

The author is Vice President and Head of Product Engineering at i-exceed

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