Skin in the Game: The Rise of Biometrics in Fintech

Passwords are not only out of date but are also dangerously insecure in a world where more and more of our daily transactions are becoming digitized. It only follows, then, that as financial technology has evolved, so have the biometric methods of authentication. Here are some of the innovations currently being adopted by different companies:

Fingerprint recognition: This is probably the most widely used form of biometrics in existence today. The feature has existed on the Apple iPhone since 2013 and now adds an extra layer of security to the tech giant’s contactless payments system, Apple Pay. The tech is now becoming a common feature among smartphones. Other tech giants, like Samsung, are also using it for payments verification.

Facial recognition: With all smartphones and ATMs now equipped with cameras, facial recognition is also becoming widely adopted. Early last year, The Wall Street Journal reported that American Express Co. had become one of the most high-profile institutions to experiment with facial recognition tech. The idea is that the technology could offer new capabilities for some of the firm’s mobile apps, and new products aimed at customers underserved by financial services.

Voice recognition: One of the hottest startups in the voice recognition space today is SayPay Technologies. The company – which won the APAC regional UBS Future of Finance Challenge – lets user say a unique SayPay code into a phone which allows the phone to authorize a transaction by matching the voice pattern with a database.

Retina scan: According to the WSJ, Citigroup adopted this technology by teaming up with automated-teller-machine maker Diebold to develop a machine that would allow customers to withdraw money with an eyeball scan instead of a card swipe. But, quite rightly, the WSJ article asks whether consumers — already suspicious of large financial institutions — would be comfortable letting a bank scan their eyeballs regularly.

Palm vein recognition: Japanese bank JCB made headlines when it unveiled a partnership with Fujitsu to develop a contact less payments system that incorporates the Japanese tech company’s palm vein authentication technology into JCB’s global network. The technology is meant to be more difficult to falsify than fingerprint technology. Fujitsu already claims to have shipped 470 of devices using the tech.

A combination: Of course the best use of biometrics would be a combination of the some of the above. That is the approach the Deutsche Bank is taking with its Callsign antifraud system. Nick Doddy, Deutsche’s regional innovation manager, explained to the Financial Times how the system can adjust to multiple profiles:

If you’ve broken your right arm and . . . you’re at home and now you’re using your left hand, it will say her location is good, her pin is good, her biometric is good, but she’s now handling it in a different way, so it might say ‘give me a facial recognition’

Photo: Leszek Leszczynski