Biometrics in Banking and Credit Union Security
Financial institutions of all sizes, from big banks to local credit unions, are now using physical traits to authenticate users and validate access to accounts. Biometrics in banking can include the use of fingerprints, facial recognition, voice recognition and more. This emerging technology provides a more secure way to protect against fraud and prevent account takeover attempts in online and call center transactions.
According to researchers at the University of Texas at Austin, financial institutions have been at the forefront of biometric adoption for some time.
“Wells Fargo, Bank of America, Citibank, Mastercard and others use technologies ranging from fingerprint readers to heartbeat monitoring bracelets in order to authenticate their customers at ATMS, online and at the point of purchase.”
Let’s explore why biometrics are important in the financial sector, how it works, and what the future looks like for biometric technology in banking.
What Is Biometric Technology?
Biometric technology refers to software that verifies a person’s identity based on physical and/or behavioral characteristics. It can be used in banking, healthcare, government agencies and other sectors where secure authentication is required to restrict access to sensitive information.
This type of authentication (such as fingerprint scanning) has been used for decades. However, it has become more popular recently due to advances in technology and increasing concerns over data security.
Advantages of Biometrics in Banking
Because biometric authentication requires unique biological characteristics that are very difficult to replicate or steal, it offers better security than passwords or PIN numbers. Biometric verification is also faster than traditional methods of authentication because users don’t have to remember or look up answers to security questions. Instead, users rely on who they are (innate characteristics such as their face, fingerprint or voiceprint) to claim their identity.
Biometric authentication eliminates security risks associated with writing down passwords, storing them in an insecure location or accidentally revealing the information to a third party. With fraudsters becoming increasingly adept at stealing, buying, or socially engineering access to users’ private information, older methods of authentication have become too vulnerable to provide sufficient security.
Behavioral Biometrics in Banking
In addition to physical biometrics such as fingerprint scanning and facial recognition, banks and other financial institutions are now beginning to adopt behavioral biometrics for enhanced security measures. Behavioral biometrics involve recognizing patterns of behavior by analyzing certain traits such as typing speed on a keyboard and the way people move their mouse cursor around the screen.
Machine learning algorithms can recognize patterns in user behavior that are indicative of fraud or suspicious activities. This technology helps financial institutions quickly detect any malicious activity on user accounts before a security breach occurs. By using this type of technology, financial institutions seek to further increase the accuracy of user identification while significantly reducing fraud rates and ensuring that only authorized individuals gain access to sensitive data.
Passcodes and Biometric Technology in Banking and Credit Unions
Biometric verification can be used in conjunction with SMS codes or verification with OTPs (one-time passcodes). OTPs sent via SMS or through an app to a user’s phone require the user to have their device on hand to retrieve the code and complete the verification process. This layering of biometrics and passcodes is referred to as multi-factor authentication. For digital banking, device-based authentication with OTPs has gained some popularity. However, biometric authentication in mobile banking can also be highly secure on its own simply using a customer’s or member’s face, fingerprint or voice.
Voice Biometrics in Banking and Credit Union Call Centers
In the call center environment, voice biometric verification is a preferred option since it takes place “in band” and introduces little to no friction into the authentication process. Active and passive voice verification are both highly secure methods of authentication. Active voice verification does require customers or members to remember and repeat a specific passphrase that is stored and used for voice matching on subsequent calls.
With passive voice authentication, a “voiceprint” is created from characteristics of the user’s voice that can be matched for verification regardless of what words are spoken. This passive approach allows verification to occur during natural conversation without any need for a speaker to say a specific word or phrase.
BusinessWire recently noted that voice authentication is particularly attractive because it doesn’t involve a heavy lift from consumers and “…banks are not required to offer new equipment to consumers to authenticate them using voice biometrics. Furthermore, voice verification software can be integrated with the bank’s current internal telephone system (PBX) and controlled either on-premises or via cloud storage.”
It is true that the Illuma Shield™ voice verification system requires only a modest technology investment and can go live quickly. However, other well-known voice authentication platforms typically represent a 7-figure investment and take many months to deploy. The availability of appropriately priced biometric technology will continue to impact adoption rates in the financial sector.
The Future of Biometrics in Banking and Credit Union Environments
Banks and credit unions are increasingly relying on physical characteristics, behavioral patterns and other uniquely identifying traits to safeguard user information and financial accounts. Because biometric technology is also highly convenient to use, it is well-received by credit union members and bank customers who value speed of access and account security. We will continue to see more adoption of biometrics in banking security over the coming years. Soon, this type of verification will become the expectation rather than a novel feature.
Illuma, a Credit Union Service Organization (CUSO), specializes in voice authentication software that replaces traditional knowledge-based authentication practices in call centers. Illuma provides frictionless voice authentication and fraud prevention for credit union contact centers to substantially reduce call handle times, improve member experience, and increase account security.
The company’s platform, Illuma Shield™, continuously analyzes the unique characteristics of the speaker’s voice and calling device using state-of-the-art Signal Processing, Machine Learning, and Artificial Intelligence. This proprietary voice authentication system rapidly and seamlessly validates the identity of callers during natural conversation without requiring security Q&A or spoken password phrases.