July 28, 2015 -
BBVA Compass has released a new report entitled “Biometrics: the Future of Mobile Payments,” which finds that a new wave of capital and new technology based on biometrics, physiological and behavioral authentication is quickly replacing PINs and passwords.
Smartphone users are rapidly adopting biometric authentication technology, which could eventually revolutionize the banking industry, the economists write in the report.
“Biometric authentication is growing at a fast pace and shows great potential to protect individual data and enhance customer experience, particularly in the banking industry,” said Nathaniel Karp, BBVA Compass chief economist. “Biometrics in banking is most popular in developing economies in Asia, such as India and Indonesia; the Americas rank second.”
The global biometrics technology market in the financial sector alone is estimated to reach the billions by 2020, which includes biometric sensors, biometric app downloads, direct purchase and software development fees and authentications fees from biometrically secured payment and non-payment transactions.
Though there is an underlying uncertainty about biometric authentication’s ability to safely protect personal data, a recent survey found that 20% of generations X and Y would be willing to share their DNA to help secure financial and personal data.
The BBVA Compass research report found that the advantages of biometrics go beyond strengthening proof of identity and imrpoving fraud detection.
“As biometrically-enabled devices become standard, critical industries such as banking will be able to offer better customer experience, faster processing times, lower costs and facilitate a multi-channel environment across industries in a seamless fashion,” said Karp.
Previously reported, Alipay VP Jason Lu predicted that biometric verification for mobile payments will soon replace traditional passwords.