August 30, 2013 -
Biometrics are the new E-verification tools for online and mobile banking says Steve Cook, Director of Business Development for Facebanx.
Why? Simply because consumers are fed-up with identity theft and further inconveniences with having to prove who they are. Fraud is costing banks and tax-payers millions. ID theft is increasing at an alarming rate and is affecting millions of people, yet not enough stringent methods are being adopted to protect customer accounts. According to a recent report by the US Federal Trade Commission, there is a new victim of ID theft every three seconds.
There is now advanced technology such as face and voice recognition biometrics to prevent account takeovers. Combining both face and voice of the account holder, ID theft becomes virtually impossible. The accuracy is around 99.9%.
Hacking your bank account could not be easier. One of the biggest fraud scams plaguing banks is when fraudsters pose as someone to obtain a password reset. This is a fairly common practice which banks have to deal with daily, and in a lot of cases the fraudsters manage to convince banks to accept they are the real person on the other end of the line. Yet it would be difficult for fraudsters to manipulate an account holder if they were screened with biometrics. Just an automatic visual comparison online using facial recognition would prevent many instances. A simple password set up could be transformed into an automatic process where the request would go through a face and voice recognition event. A fraudster may get around the system once but many try thousands of times, and preventing fraudsters committing multiple acts is where biometric technology wins hands-down.
There are huge benefits for consumers if their accounts are protected by their own human characteristics, whether it is fingerprint, face or voice — or even a combination of all three. Biometric technology will help to minimise account takeovers and reduce the costs of managing fraud too. Two out of every three cases reported to CIFAS (The UK’s Fraud Prevention Service) were instances of ID theft. Just think of the time and money saved with call-centres if the process of automatic password reset included biometric screening — it would deter criminals from attempting to defraud in the first place!
So should banks be doing more to protect their customers? Consumers need to feel reassured banks are protecting their money and tackling account takeovers has to be a priority for banks, particularly as more transactions have gone mobile. Mobile payments for goods and services are set to reach over $720billion (£450billion) by 2017. Therefore, verifying customers could not be more important as current methods to stop fraud are just not working efficiently enough. Biometric technology could play a key part in the authentication process. Online banks and payment processors should not be wary to implement it. It is already in-situ at many locations and consumers are a lot savvier than we give them credit for — providing banks protect their privacy as well as their money. Fraudulently withdrawing money would be much harder for criminals if these screening methods were in place.
Biometric fingerprinting is now coming into force with the new smartphones, and within the next few years other biometric methods such as face and voice recognition will transform every aspect of our lives — they could very likely replace passwords and usernames altogether. No need for all those passwords you can never remember! Just simply paying for items with your smartphone is set to boom come the Christmas season as high-street retailers gear up to accept mobile payments.
Telecoms, travel, insurance and gaming operators are already keen to introduce automated biometric verification processes. Facial recognition will play a role in identifying criminals for law enforcement agencies. Governments around the world are using it for immigration and border control. Even UK council authorities are looking at biometrics to stop housing tenancy fraud which also runs into millions. So for banking, whether it is online or via your smartphone, biometric technology has to be the future to protect consumers. Wouldn’t you feel more comfortable if your bank accounts couldn’t be compromised so easily?