Next generation banking: a light bulb moment in payments

  • Nathan Southall, Senior consultant at Capgemini Consulting

  • 18.06.2015 01:00 am
  • Banking , biometric payments , Nathan is a senior consultant in the Banking RR&C Centre of Excellence of Capgemini Consulting UK. He has 3 years of professional consulting experience and 7 years industry experience working across the Banking Sector, specialising in applying an Operational Excellence lens to Regulatory Risk & Compliance.

Like all great inventions, the light bulb can’t be credited to one inventor. It was a series of small improvements on the ideas of numerous inventors that led to the light bulb we use in our homes today.

Will contactless biometric payments be the next light bulb in the Financial Services sector?

If you're excited about the ease of paying for stuff, with a wave of your bank card but you're worried about fraud then you are not alone; majority of banks and card issuers are pondering the same.

Thanks in part to Apple s TouchID; the finance industry is moving increasingly closer to security solutions that involve minimal user input, whilst providing greater security. This has resulted in innovative solutions being developed like tokenization in payments, mobile wallets and numerous authentication technologies (heartbeat, fingerprint, facial recognition), however in particular to note is a partnership between Mastercard and Zwipe, in the form of a contactless payment card with a fingerprint sensor on it making the Chip & Pin redundant.

Because fingerprints are unique and difficult to copy, banks can now start to offer contactless payments without limit, rather than the current 20 limit for contactless payments, which means anything from a newspaper to an iPad, can be paid for with the tap of a finger.

The ever-growing Cyber threat on banks is commonplace. A report by the security firm Kaspersky Labs claims that a multinational gang of cybercriminals infiltrated more than 100 banks across 30 countries. This initiative by Mastercard appears to have certainly considered two primary obstacles regarding the use of biometrics.

Previous attempts at biometric implementations have not been fully implemented or made mainstream because of these very reasons:

1 - A person's biometrics are stored on a central database, which is being proven to be the least safe method for security - you just need to look at recent news stories to see how many companies have recently had their servers hacked. This new technology stores all biometric information locally on the card and not on a central database - limiting the impact of a cyber-attack compromising this highly sensitive data.

2 - The cost of upgrading the existing infrastructure, all ATMs, card readers, payment terminals and even financial institutions back office systems.

The new technology inside this card has been designed to work with all existing contactless payment machines and ATMs, so you can swipe it on any till that already allows you to tap your card, including the London Underground and London Buses Oyster card readers.

All new innovations are accompanied by excitement and unrealistic expectations. These expectations are often shattered as problems are unearthed, but it doesn’t take long before problems are overcome and better versions of that innovation become available.
This brings us back to the light bulb, will biometrics be the ‘light bulb’ for financial authentication? Or is it heart beat authentication? Or is it microchips in the human body? The innovation agenda for authentication seems endless but the promise for new light bulbs illuminating society is undoubtedly reassuring.


Co-author: Anuj Kumar- Head of Banking Risk and Regulatory Compliance Capability at Capgemini Consulting 


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