Biometrics in Banking: Who Is Killing the Passwords in 2016?

Biometrics are gaining more and more popularity in the financial sector worldwide. The technology is claimed to be the most convenient method as users don’t have to remember the numbers, codes or passwords. With smartphones, the only thing we have to do is put the finger or say a short phrase to the speaker.

There is actually a particular company to thank for popularizing fingerprint biometric authentication – Apple. The tech giant performed an amazing job on creating a habit to get authenticated with TouchID and paved the way for other companies across industries to implement the technology with no market resistance and necessity for consumer education.

Realizing the power of convenience and habit, banks recently started rushing into the implementation of biometrics authentication in mobile banking.

One of the examples is Halifax – the high-street bank owned by Lloyds Banking Group – that has trialed technology which uses a customer’s heartbeat as security authentication for its digital financial services.

Two years ago, Barclays, in partnership with Hitachi Europe, ramped up the fight against fraud with the launch of the Barclays Biometric Reader, developed with Hitachi’s Finger Vein Authentication Technology (VeinID*) – a new method for customer authentication in UK banking. By simply scanning their finger, customers were able to easily access their online bank accounts and authorize payments within seconds, without the need for PINs, passwords or authentication codes.

Barclays has a particular affection to biometrics. The story started when the bank rolled out voice recognition in 2013 to the limited group of its wealthiest clients (300,000). A year later, since the service was successfully tested on the wealthiest clients, the service was planned to be offered to 12 million retail banking customers.

In the middle of 2015, Facephi – which specializes in face recognition technologies – reached an agreement for the next four years with the BBVA Prevision AFP Bolivian entity to implement its facial recognition system to its pensioners and later, to its users. According to the official press release, with this operation, BBVA will boost its digitization process and become the first entity of fund and pension administration in Bolivia to use a biometric recognition system. It is expected that the implementation of the biometric technology in BBVA Prevision will be developed in various phases to guarantee a gradual and effective adaptation. First of all, the service of authentication with facial recognition will be used by the employees and beneficiaries of provisions who really need to provide evidence of their state of life.

Nymi, the company behind the Nymi Band, an electrocardiogram (ECG) authentication wristband, did a pilot test along with RBC and MasterCard for payments.

Uniqul, a Finnish company, has already developed the world's first system which uses facial recognition for payment purposes.

Japanese telco NTT DOCOMO and handset maker Fujitsu have launched a smartphone that authenticates users for mobile payments by scanning their irises.

Last year, Wells Fargo, one of the top US banks, launched a pilot of SpeechPro’s biometric technology to authenticate customers, a feature that will be rolled out to CEO Mobile iPhone app users in 2016. According to the official press release, Wells Fargo is using SpeechPro’s VoiceKey.OnePass proprietary voice biometric algorithms and supplemental technologies, whose triple biometric accuracy stems from a combination of voice authentication, facial recognition and many unique anti-spoofing liveness tests.

In the beginning of 2015, USAA introduced a face and voice recognition along with Touch ID.

Another bank, HSBC, recently "blew up" the Web with the news on launching voice recognition and touch security services in the UK. As the bank shared with BBC, its phone and mobile banking customers will no longer have to remember a password or memorable places and dates to access accounts. The service will be offered to up to 15 million banking customers.

RBS is another successful case of biometrics implementation in banking. Last year, RBS and NatWest introduced Touch ID following feedback from their customers. Using Apple's new Touch ID fingerprint sensor, RBS and NatWest customers who have an iPhone 5S, iPhone 6 and iPhone 6 plus will be able to access their mobile banking app within seconds.

In the middle of 2015, Canadian bank Tangerine was reported to be experimenting with facial-recognition on mobile phones and other technologies. The bank was the first in Canada to allow check deposits by taking photos with mobile phones in 2013, and to use fingerprint scanning and voice-enabled banking.

A year earlier Tangerine announced that its voice banking users can interact with Tangerine’s mobile banking app through a conversational interface that answers questions and provides information. Working with software provider Nuance Communications, Tangerine is the first bank in Canada to offer a voice-controlled mobile app. Touch ID uses fingerprint recognition technology provides Tangerine clients an added layer of security when logging into the bank’s mobile banking app.

Even though the examples of implementation and piloting are piling up, it is hard to say whether biometrics will replace passwords in 2016 or become mainstream for banks. There are certain issues related to authentication with biometrics, but over time, the technology may improve to the point when security won't be such a problem anymore. Banks and other institutions have definitely caught the hype, but many of them are in piloting or limited deployment phase. Card networks like Visa and MasterCard are piloting different biometric modalities, which speed up the overall transition from passwords to biometric authentication. Maybe in two or three years, we will see a clearer picture of where we really are with biometrics.