How Biometrics Impacts Payments Process

Howard Berg

Senior Vice President at Gemalto
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How Biometrics Impacts Payments Process

19.12.2017 11:10 am

This time Howard Berg, Senior Vice President of Gemalto shared with Financial IT his insights on the importance of biometrics in payments and what value can it add to merchants and consumers at FinTech Connect Live 2017.

What was the most exciting topic at Fintech Connect Live this year?

Fintech Live 2017 was packed with presentations and several topics were particularly exciting, from the impact of Brexit on the fintech industry and what it means for the accessibility of tech talent and investment, to how incumbent and challenger banks are reacting to and preparing for PSD2. In addition, the rapidly developing role of Artificial Intelligence and Machine Learning was discussed, and the developments in biometric technology.

For me, the most exciting topic of all was the growing demand and popularity of biometric EMV cards. The increase in uptake of contactless cards, combined with the adoption of fingerprint recognition in smartphones means that consumers are ready to adopt these cards, even though biometric authentication is still at a formative stage. In just a few years, biometrics has jumped off the pages of science fiction and into the hands of millions of consumers globally. What’s more, biometric cards are to become a reality as early as 2018, which will further change the perception of modern-day payments solutions.

What is the importance of biometrics in banking and payments?

What’s particularly exciting about biometrics is that they have the potential to improve two key aspects of a service, especially for services in the banking and payments industry: a smoother user experience and stronger protection against fraud. Biometric authentication puts the user at the centre of the proposition, which is by far the best approach for innovation. It simplifies the consumer’s interactions with the virtual world, and we know that financial services cannot sacrifice convenience in order to deliver robust security. This is what makes biometric authentication increasingly important for the banking and payments industry – it balances security with convenience.

Security is extremely important for consumers when it comes to banking services. In fact, a recent Gemalto study suggested that 44% of consumers would leave their bank in the event of a security breach, and 38% would switch to a competitor offering a better service. It also showed that consumers suffer from both unjustified rejection and excessive authentication steps when banking online or on mobile. The results from the survey demonstrate the critical importance of marrying convenience with security for a seamless customer experience – and biometric technology will help banks to achieve it.

How are banks responding to the challenge?

Biometrics are starting to play a huge role in the banking and payments industry, especially when it comes to mobile banking. As we are all well aware, a few years ago Apple introduced the iPhone 5S which made fingerprint authentication a mainstream method for unlocking our devices. Soon after this, banks adopted fingerprint recognition as the authentication method for their mobile apps, opting to make mobile banking more reliable, convenient and secure at the same time.

Now biometrics are moving away from just the smartphone.  For example, a new generation of EMV cards with a built-in fingerprint reader are already been trialled by banks. These in theory can do away with contactless spending limits or even the need to enter a PIN number. And banks are also looking to an ever-increasing range of factors to decide whether or not a transaction is fraudulent. These include the user’s location, and the device they might be using, but also can now including biometric factors – even down to the way you type, or control your computer’s mouse. Banks will increasingly use a matrix of different factors, including biometrics, to give each transaction a ‘risk score’ – and if it thinks the risk of fraud is high, the bank can request further user authentication, such as a fingerprint check, in real time. As this technology becomes more common, our banking experiences should become much more seamless – far reducing the number of times purchases are blocked or held up by fraud checks and making life easier for the consumer.


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