Biometric Research Note: Asia to lead growth in biometric banking applications
Identity theft and identity verification has begun to fuel growth for biometric applications in the banking sector. Biometric technologies are especially being adopted for various retail banking applications in emerging economies in Asia, Latin America and the Middle East.
The Biometrics Research Group estimates the total revenues for biometrics supplied to the global banking sector will total US$900 million by the end of 2012.
Biometrics uniquely identifies a person’s physical and behavioral characteristics. Biometric technologies can verify a customer’s identity based on unique characteristics, such as fingerprints, retinal identification, facial and voice patterns.
Financial institutions have therefore been adopting the technology to strengthen their security infrastructure and to protect individual consumer banking profiles. In surveys, consumers in emerging countries overwhelmingly vote for biometric scanning as a preferred authentication method for banking transactions. Rural consumers in emerging economies especially want to use such technologies because of high illiteracy rates and due to unfamiliarity with carrying and using banking cards at automated teller machines.
Biometric transactions offer increased security for consumers without requiring a personal identification number (PIN). Biometric ATMs most often utilize fingerprint-scanning technology to identify and authenticate customers, along with voice-prompted instructions to walk consumers through transactions. Customers have access to all the features of a traditional bank ATM, including cash and check deposits, balance inquiries and account statements. PIN-based cards are most often also accepted at the terminal.
Such technology is especially popular in Asia and has experienced test rollouts in countries such as India and Indonesia. According to a recent academic study, among all banks utilizing biometrics, 52 percent are located in Asia.
Many banks in India are starting to roll out biometric ATMs. Japan is one of the only advanced industrialized countries in the world that has been using biometric ATMs extensively for years due to legislation that made banks liable for withdrawals made by criminals using stolen bank cards. As a consequence, Japan has over 80,000 biometric ATMs in service, used by more than an estimated 15 million customers.
While the total market for biometrics equals US$900 million, much of that money is mostly allocated to employee and resource management within the banks, and not to consumer services such as ATMs.
The academic study found that fingerprint verification is the most utilized biometric technique in global financial institutions. Approximately 48 percent of the banks identified in the academic survey were found to use fingerprint technologies in a wide array of different internal operations.
The next biometric modalities that are used by most banks worldwide are finger vein pattern and voice recognition technologies. Often voice recognition technologies are used to verify consumers who are receiving customer service over the telephone.
Lesser used biometric technologies, with less than 10 percent market share include: hand vein and iris recognition, signature recognition, hand geometry, face recognition, keystroke verification and hand scan.
With the wide deployment of mobile telephony worldwide and the rapid release of next generation smartphone hardware and software, the Biometrics Research Group expects fast growth in biometric adoption for the banking sector. Areas of growth will include: hand geometry, face recognition, and signature recognition, for use with online bank deposits aided by the use of smartphones.
Biometrics Research Group expects total revenue for biometrics supplied to the global banking sector will total US$2.5 billion by 2015. This revenue growth will be lead by continued Asian adoption, especially in Indonesia where growth in biometric technology use is forecasted to be linked with the fast growing Islamic banking sector.
Biometrics Research Group provides forward-looking and systematic data about the global biometric market, allowing industry stakeholders to calculate political, economic and investment risk.
ATMs | authentication | banking | biometric database | biometrics | facial recognition | financial services | fingerprint scanner | fingerprints | hand geometry | identity theft | identity verification | law enforcement | multi-factor authentication | PIN | secure identification | signature recognition | voice recognition