Over the years, online payments have become a regular part of our daily financial transactions. The convenience of online payments and the ease of carrying out financial transactions from the comfort of our homes have made online payments a preferred mode of financial transactions. However, the one main concern that online transactions raise is security and privacy. As the volume of online transactions grows, so does the number of fraud cases. A single cyberattack can bring down a financial institution, affecting millions of customers and the reputation of the institution.
With the rise in cyberattacks and fraud attempts, we need a solution that not only secures online transactions but also provides an added layer of security. This is where biometric authentication comes into the picture. Biometric authentication is the use of biometric identifiers like fingerprints, facial recognition, and iris scans to confirm the identity of an individual. It is a reliable way of verifying a person’s identity and ensuring secure online payments.
What is biometric authentication?
Biometric authentication is a form of identification and authentication that uses biometric identifiers to confirm the identity of an individual. Biometric identifiers are unique physical or behavioral characteristics that can be measured and compared. Examples of common biometric identifiers include fingerprints, facial recognition, iris scans, and voice recognition. Biometric authentication uses these identifiers to make sure that the person who claims to be who they say they are, actually is.
Biometric authentication works by matching the biometric identifier with the stored reference or template. The stored reference is created during the enrollment process, where the user provides their biometric information to the system. Once enrolled, the biometric template is stored securely on the system, and the user can use the same biometric to authenticate themselves during subsequent transactions.
Biometric authentication provides a more secure and reliable way of verifying an individual’s identity compared to traditional authentication methods like passwords and PINs. The likelihood of two individuals having the same biometric identifiers is very low, making it difficult for fraudsters to use false identities to carry out financial transactions online.
Importance of biometric authentication in financial transactions
Biometric authentication is increasingly becoming a preferred mode of authentication in financial transactions because of its many benefits. Firstly, it provides a higher level of security compared to traditional authentication methods like passwords and PINs. With biometric authentication, fraudsters cannot use stolen passwords or PINs to access financial accounts. They will require the biometric identifier of the authentic user, which is impossible to replicate or steal.
Secondly, biometric authentication makes financial transactions more convenient and hassle-free. With biometric authentication, there is no need for remembering complex passwords or carrying around several cards and tokens. Biometric authentication enables users to carry out financial transactions quickly and easily using their fingerprint, facial recognition, or iris scans, all with the touch of a button.
Thirdly, biometric authentication makes financial transactions more secure and reliable. Financial institutions can use biometric authentication to carry out real-time identity verification, enabling them to detect and prevent fraudulent transactions. Biometric authentication also makes it possible for institutions to offer remote services like online banking, mobile payments, and other digital transactions with ease and confidence.
Biometric authentication techniques for financial transactions
There are several biometric authentication techniques used in financial transactions today. Some of the most common techniques include the following:
Fingerprint authentication
Fingerprint authentication is the most widely used biometric authentication technique today. It works by capturing a digital image of the user’s fingerprint and matching it against the reference template stored in the system’s database. Fingerprint authentication is fast, accurate, and reliable, making it the preferred method for many financial institutions today.
Fingerprint authentication devices can be integrated into mobile devices, laptops, and other online payment platforms. This makes it easy and convenient for users to access their accounts and carry out financial transactions securely and quickly. The technology is also very affordable and does not require any specialized hardware or software.
However, fingerprint authentication is not without its challenges. The main challenge is that fingerprint databases can be breached, and fraudsters can steal user fingerprints, making it possible for them to impersonate the user. Also, some individuals have worn out or scarred fingerprints, which can make fingerprint authentication difficult or impossible to use.
Facial recognition authentication
Facial recognition authentication is another biometric authentication technique used in financial transactions. It works by capturing a digital image of the user’s face and matching it against a reference template stored in the database. Facial recognition authentication is fast and accurate and can be carried out remotely, making it ideal for online payments and digital transactions.
Facial recognition technology is becoming increasingly popular in financial transactions because of its simplicity and convenience. In most cases, users can use their mobile devices to access their accounts and carry out financial transactions, making it easier and more convenient for users.
However, facial recognition authentication is not without its challenges. The main challenge is that facial recognition technology is not yet perfect, and it can be fooled by images and videos. Also, it is susceptible to race and gender biases, which can make it difficult for some individuals to use.
Iris scan authentication
Iris scan authentication is another biometric authentication technique used in financial transactions. It works by capturing a digital image of the user’s iris and matching it against a reference template stored in the database. Iris scan authentication is fast, accurate, and reliable. It is also very secure because the iris is unique to each individual and is almost impossible to duplicate.
Iris scan authentication devices can be integrated into mobile devices, laptops, and other online payment platforms. This makes it easy and convenient for users to access their accounts and carry out financial transactions securely and quickly. The technology is also very affordable and does not require any specialized hardware or software.
However, iris scan authentication is not without its challenges. The main challenge is that it can be difficult to use, especially for individuals with eye problems or eye diseases. Also, iris scan authentication devices can be expensive and difficult to obtain.
Benefits of using biometric authentication in financial transactions
There are many benefits of using biometric authentication in financial transactions. Some of these benefits include the following:
Improved security and fraud prevention
Biometric authentication provides a high level of security and fraud prevention in financial transactions. It makes it impossible for fraudsters to use stolen passwords or PINs to access financial accounts, and it also enables institutions to carry out real-time identity verification for detecting and preventing fraudulent transactions.
Enhanced customer experience
Biometric authentication makes financial transactions more convenient and hassle-free for customers. With biometric authentication, there is no need for remembering complex passwords or carrying around several cards and tokens. Biometric authentication enables users to carry out financial transactions quickly and easily using their fingerprint, facial recognition, or iris scans, all with the touch of a button.
Increased operational efficiency
Biometric authentication makes financial transactions more secure and reliable. Institutions can use biometric authentication to carry out real-time identity verification, enabling them to detect and prevent fraudulent transactions. Biometric authentication also makes it possible for institutions to offer remote services like online banking, mobile payments, and other digital transactions with ease and confidence.
Cost savings
Biometric authentication reduces the need for traditional authentication methods like passwords and PINs, which can be expensive to manage and maintain. It also reduces the need for physical tokens and cards, which can be expensive to produce and distribute.
Real-life Examples of Biometric Authentication in Financial Transactions
Biometric authentication is already being used in many financial institutions worldwide. Some of these institutions include banks, insurance companies, and fintech companies. Here are some examples of how institutions are using biometric authentication in financial transactions:
HSBC
HSBC has introduced voice recognition technology in their call centers in the UK, making it possible for customers to access their accounts without the need for passwords or PINs. The technology is fast, accurate, and secure, making it easier and more convenient for customers to access their accounts.
Mastercard Identity Check
Mastercard has introduced a biometric authentication solution called Identity Check, making it possible for customers to use their facial recognition or fingerprint to authenticate themselves during online payments. The technology is fast, accurate, and secure, making it easier and more convenient for customers to carry out online payments.
Jumio
Jumio is a fintech company that provides biometric authentication solutions to financial institutions. Their biometric authentication solutions use facial recognition and document verification to confirm the identity of customers during financial transactions. The technology is fast, accurate, and secure, making it easier and more convenient for customers to access their accounts and carry out financial transactions.
Challenges of Biometric Authentication in Financial Transactions
Whilst biometric authentication has its many benefits, there are challenges that institutions that plan to implement it in their systems must consider:
Privacy concerns
Privacy concerns are one of the main challenges of biometric authentication. Biometric data is sensitive, and users are wary of how it is collected, stored, and used. Institutions must implement strong data protection policies and procedures that comply with data privacy laws, and that guarantees the privacy and security of user data.
Technical limitations
Biometric authentication technology is not yet perfect, and technical limitations can limit its effectiveness. For example, some users may have deteriorated fingerprints, or facial recognition may not be accurate if the lighting conditions are unfavorable. Institutions must be aware of these limitations and ensure that their systems are designed to address them.
Cost and complexity
Implementing biometric authentication can be costly and complex. There is a need to invest in the necessary hardware, software, and infrastructure to enable biometric authentication. Costs can also arise from ensuring updates and maintenance for the devices and software.
Conclusion
Biometric authentication is a reliable way of verifying a person’s identity and ensuring secure online payments. Biometric authentication provides a high level of security and fraud prevention in financial transactions, enhances customer experience, and increases operational efficiency. While it presents many benefits for institutions and users, there are privacy concerns, technical limitations, and cost and complexity challenges that they should consider.
With biometric authentication, we can expect a more secure future for online payments, providing users with the peace of mind they need to carry out financial transactions safely and efficiently.
