Banking inclusion has skyrocketed in recent years. According to the World Bank, 71% of people had access to a bank account in 2022, up from 42% a decade before. This growth can mainly be attributed to the digital revolution – two-thirds of adults worldwide now make or receive a digital payment, which has risen from just 35% in 2014. Juniper Research estimates that the number of remote banking customers is expected to exceed 3.6 billion by 2024.

While there are many advantages to remote banking for banks and customers alike, there’s a serious challenge posed by this trend. Remote banking relies on a level of trust in the identity of the individual accessing the service, and that trust can be exploited by cyber-enabled crime. As banks expand remote access to digital services and make access easier for users, they often extend an unintended invitation to fraudsters.

In truth, banks are facing pressure on all fronts – consumers expect to be able to open accounts and bank remotely with speed and ease. Meanwhile, fraudsters are siphoning money and undermining security through online channels. Simultaneously, banks face the threat of KYC and AML compliance fines.

In response, many banks are leveraging advanced verification technologies to onboard and authenticate the new era of online bankers – replacing cumbersome manual processes and supplanting outdated authentication methods like passwords and passcodes.

Biometric verification technology in particular can enable banks to deliver an effortless user experience, maximize customer inclusion, reduce user frustration, and provide the security needed to protect against fraud while supporting compliance with regulations. But not all solutions provide the same level of protection.

How Are Biometrics Used in Banking?

There are a few key use cases for biometrics in banking:

Customer Onboarding

The first and most critical step is verifying the identity of a new remote customer. This is how banks ensure that they’re engaging with a legitimate individual from the outset, which enables banks to filter out potential bad actors, bots, and fraudulent identities early while supporting compliance efforts (proving they “know” their customers).

By scanning their trusted identity document – such as a driver’s license – and then completing a brief biometric facial scan, banks can check the verified identity of each new customer without ever meeting them in person.

Onboarding is the point of highest risk because you don’t know anything about the user or their risk until you have enrolled them – so it’s important to start off with the highest level of identity assurance to defend against threats such as synthetic identity fraud. Trust established at onboarding will carry through the customer lifecycle.

Customer Authentication

An account could be onboarded legitimately, but then compromised through account takeover fraud, identity theft, phishing, or other fraudulent activity. Biometric face authentication ensures that the person trying to access an account (the ‘visitor’) is the same person who created the account (the ‘owner’) on an ongoing basis.

Once the individual’s identity has been established using the highest level of assurance, returning authentication doesn’t require the same stringent process and can be achieved through a simpler liveness check – unless something has changed to raise the level of risk. Examples of this include the customer asking for a new line of credit, adding a new authorized user to their account, requesting a password reset, or setting up a new device or rebinding an existing device. In these instances, a bank may decide to step up the authentication and require an additional biometric scan to ensure that this is in fact the customer requesting these changes. This enables banks to deliver the required convenience and flexibility for customers.

The two above processes have become absolutely essential for banks to deliver remote services securely and conveniently – and biometric technology is the core.

How Can Biometrics Be Implemented in Banking?

Biometric technology can be implemented in many ways. It can be combined with other authentication methods to create a multi-factor authentication or step-up authentication solution, for example.

In some jurisdictions, banks are required to implement multiple security factors under strong customer authentication laws.

Why Do Banks Need Biometric Technology?

Banking with biometrics delivers several key benefits:

The Benefits and Advantages of iProov Biometric Face Verification for Banks

Not all biometric solutions provide the same level of protection. This is because they are not created equal in their ability to determine the “liveness” of the supposed person trying to verify their identity, ensuring that the person is who they claim to be and present at that time. This is important when defending against generative AI attack methodologies like deepfakes and face swaps.

Additionally, there can be consequential differences in usability. When reviewing solutions, it is necessary to understand important things like if there are device or technology requirements, and if will the user be asked to perform certain movements as they will lower completion rates.

iProov technology delivers several key benefits:

  • Reduced operating costs: Minimize costs associated with manual processes and errors, and reduce associated fraud costs by assuring the customers are who they say they are.
  • Maximized completion rates: Top biometric solutions can deliver incredible completion rates – iProov’s are typically > 98% in production environments.
  • The highest levels of security: A strong biometric solution can deliver unrivaled security. iProov is chosen by the world’s most security-conscious organizations – such as the Department of Homeland Security, UBS, and the UK Home Office – and other banks such as Knab and Rabobank for a reason.
  • Customer and organization fraud protection: By ensuring the genuine presence of customers during the onboarding and authentication stages, you minimize the pathways criminals have to defraud your services – ultimately resulting in lower fraud costs and safer, more secure customer accounts.
  • True inclusivity, usability, and privacy: iProov technology is accessible regardless of age, gender, ethnicity, and cognitive ability. The technology is passive and intuitive. The user does not have to smile or turn their head but authenticates by simply looking at their device. The more people that can use a solution, the greater reach it has. You can read more about how iProov biometric technology delivers data privacy here and how it delivers inclusivity & accessibility here.
  • Reduced risk of compliance penalties and reputational damage from negative publicity: Biometric technology enables banks to meet regulatory guidelines while reassuring customers, which can in turn protect the organization’s reputation.
  • Supported Compliance with regulations such as KYC and AML: Biometric technology supports KYC and AML compliance by delivering secure, robust customer onboarding and ongoing authentication. This reduces the costs and time taken for KYC and identity verification, removing much of the burden associated with the KYC/AML ecosystem for banks.

Biometric Authentication and Verification Technology in Banking: Summary

Facial biometric technology…

  • Delivers a fast and easy onboarding process, with effortless authentication, which makes all the difference in attracting and retaining customers in an increasingly competitive environment.
  • Delivers the flexible authentication required by banks – organizations can choose different levels of identity assurance based on the activity carried out. Additionally, the technology can be implemented flexibly – through multi-factor or step-up authentication, for example.
  • Creates overwhelming hurdles for adversaries to overcome.

Ultimately, the future of banking is digital and will owe much of its success in balancing security with customer experience to biometric solutions.

Image of someone holding a credit card to represent article: Biometrics in banking, what are the advantages of biometric technology for banks?