Improves security and CX using biometric authentication

by James · October 11, 2022

Just as there have been advances in technology, the fintech sector has also been on the rise. With a compound annual growth rate of 25%, the global fintech business is forecast to be valued at USD 310 billion by the end of the year.

However, with the continued growth of the fintech sector, cyber attacks within the industry have increased significantly. The Global Intelligence Office report predicts that third-party, zero-day vulnerabilities and ransomware groups will adapt to the changing cyber environment and continue to increase.

As the chances of fintech firms’ security increasing due to the increased cyber-attacks, fintechs need to be able to protect their data while providing exceptional customer service. Can biometric authentication help fintech firms do both?

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A cyber attack is a cyber attack, regardless of the amount

Whether the amounts are significant or minimal, online fraudsters have increased the speed at which they attempt to defraud people and businesses. Midway through 2021, online fraud saw a 285% increase compared to previous years. This has come in tandem with the increase in digital lending from fintech companies.

While it may seem impossible for fintech firms to tell if they are interacting with an online fraudster, they can do so via biometric authentication technology such as Face ID. With the speed and accuracy with which Face ID operates, fintech firms will be able to authenticate and confirm that they are interacting with a customer and not an online fraudster. This is possible because of the uniqueness of each person’s biometric makeup.

Should fintech firms embrace biometric authentication, they will improve security. But will it improve the customer experience? Or would it hinder the customer experience for people who interact with them?

Biometric authentication can also benefit customers

Increasingly, across all sectors, customers expect contactless experiences. Out of a total of 4,000 people across the US, UK and Australia, 75% had used contactless payments to make a purchase. In addition to this, 56% of consumers surveyed claim that they prefer contactless payments to entering a PIN code.

In a sector that largely revolves around technology and its integration into the process of transferring money, customer experiences must be seamless and secure. This can be achieved using two-step authentication that includes both biometrics and digital ID. By enabling customers to identify themselves first using their digital identity and then with biometric authentication technology, such as liveness detection, fintech firms would not only improve the customer experience, but also ensure their security.

So, with the evolution in technology, fintech firms cannot afford to stay still. Doing so could leave them vulnerable to cyber attacks and loss of customers as a result. With the speed at which contactless experiences and security are being used across all sectors, is it a question of if and when fintech firms will implement technology as such?

Biometric authentication can work hand in hand

While it may seem like a scary thought, fintech firms must accept that cyber-attacks are becoming more sophisticated in the way they are carried out. Cyber attackers no longer use one method to infiltrate or attack fintech firms, they use a variety of ways.

To combat this, fintech companies should look to technology that enables them to identify the real from the fake, the innocent from the criminal. Doing so can save them countless amounts of money as well as customers.

About the Author: Jonathan Andresen is the Senior Director of Incode Technologies, a San Francisco-based ID verification and biometric authentication platform. Based in Singapore, he has extensive experience in marketing management and execution of metric-driven marketing programs.