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Consumer comfort with biometrics for banking rises; companies pitch public and financial services

Consumer comfort with biometrics for banking rises; companies pitch public and financial services

Consumers are ready to use biometrics for card payments, Fingerprint Cards says, and the company is talking directly to them in a new campaign to build up interest.

More than half of consumers have contactless payment cards (52 percent), and nearly 8 out of 10 use it to make payments at least weakly, and most people (59 percent) want to use their contactless cards more, according to new research from FPC. The company interprets these numbers as meaning that contactless payment technology now “almost fits the bill” (FOC’s emphasis). Biometrics, the company argues, are the missing link.

Nearly half of older card users, and 38 percent overall, say security is the main reason they are hesitant to make contactless payments, and hygiene concerns have arisen with the pandemic. Millennials are particularly keen to use contactless payment cards, and Fingerprint Cards says the consistency of the user experience and lack of payment amount limits will boost the technology’s popularity.

Biometric cards also provide a way for card issuers to meet consumer expectations for innovation and personalization.

Most tellingly, 56 percent of consumers say they would rather have a biometric payment card, and 50 percent say they would pay extra for one.

Fingerprint Cards has produced a video to promote the technology to consumers, as part of a campaign to generate interest in end-users. The video takes just over a minute to explain the benefits of using a fingerprint over a PIN to authorize payments, and is accompanies by graphics encouraging consumers to “forget PINs and fraud.” The web page concludes with a call to “Join the Movement!” by asking banks for a biometric payment card over social media, with the hashtag “#PaySmarter.”

The consumer response to the recently-announced commercial launch of fingerprint-enabled payment cards with the company’s technology from BNP Paribas may also play a significant role in raising the technology’s profile.

Zwipe also takes the opportunity of its “Summer Greeting” newsletter from CEO André Løvestam to note the increasing awareness among banks, local card schemes and retailers that biometric payments provide significant value to customers. The historical conservatism, cost consciousness and risk aversion of the sector is contrasted with the accelerating rate of change around biometric payment cards.

The company is going beyond its engagements with card manufacturers to communicate with banks and neo-banks, as well as retailers and tech companies in the space.

Biometrics for cash too

Biometrics are ready to play a larger role in automated and touchless banking processes, and the pandemic should spur banks into making the necessary investments, a representative of ATM manufacturing giant Diebold Nixdorf told the PA news agency.

The company believes that cash transaction will decline by about 30 percent over the course of 2020, and then another 10 percent next year.

Diebold Nixdorf UK and Ireland Vice President and Head of Financial Services Matt Phillips said new technologies, also including mobile phone authentication, must be rolled out by the industry to ensure access to cash in the post COVID-19 world.

This will accelerate the need for more technological transformation than we have seen historically,” Phillips said. “Some of the financial institutions are laggards when it comes to technology.”

The report notes that one in ten people were refused a cash transaction during the pandemic, according to consumer group Which?, but roughly 8 million people in Britain would struggle without access to cash, according to a recent Access to Cash report.

Diebold Nixdorf holds roughly a 25 percent share of UK ATMs.

OneSpan advises financial service companies

Likewise, OneSpan is advising financial institutions to invest in technology to meet customer identification challenges, whether in-person or remote.

A new white paper from the company on “Agreement Automation: Best Practices to Remove Friction, Improve Compliance & Achieve Growth” recommends biometrics, and refers to Aite Group research showing that only 7 percent of financial institutions currently use behavioral biometrics, despite their potential value for identifying bot behavior and fraud risk.

The white paper covers digital identity verification, automating processes, KYC compliance, and collecting digital audit trails.

Research from Aite Group also suggests that less than half of consumer account applications will be submitted in person this year, emphasizing the need for effective digital onboarding. A streamlined customer experience and mitigating the risk of legacy processes will allow institutions to differentiate themselves, OneSpan writes.

In Canada, OneSpan Director of Global Standards and Regulations Michael Magrath says regulations and a lack of standardization are making it difficult for banks and other financial services companies to implement biometrics and other forms of identity verification, according to IT Business.

Regulators in Canada declared digital identity proofing valid for banking last year, but making use of it requires financial institutions to adhere to multiple standards and match the right technology to each use case, according to Magrath. He says the pan-Canadian trust framework from the Digital ID and Authentication Council of Canada (DIACC) will help to address these challenges when it becomes official, and banks have been making strides during the pandemic.

Many banks are now using biometric selfie and ID-check technology to comply FINTRAC regulations, according to the report.

“To securely verify identities online and in the mobile channel, there is a need for a wide-ranging portfolio of authentication methods,” OneSpan Head of Solution Architecture for Secure Agreement Automation Conor Hickey told IT Business. “Banks and financial services organizations should leverage a combination of document verification and facial comparison technologies to verify that the person opening the new account or applying for the loan really is who they claim to be.”

Filipinos ready for biometric banking

Research continues to show rising consumer comfort with biometric banking too. More people in the Philippines are happy to use fingerprint or behavioral biometrics for logging into mobile banking apps than usernames and passwords, according to research from Fico. More than three quarters of respondents (76 percent and 77 percent respectively) express comfort with the biometric modalities, while only 43 percent prepared to use the legacy method.

Fico has recently released survey results showing similar responses from people in Malaysia, the U.S. and Canada, as well as the UK, though with higher acceptance for specific biometric modalities. Large numbers of people in all countries admitted poor password practices.

The Philippines edition of Fico’s Consumer Digital Banking Survey shows that not only would 72 percent of consumers in the country be happy to share a biometric with their bank, 40 percent would use facial recognition, and 23 percent would use eye scans.

The most common alternative to passwords currently used by Filipinos is one-time passcodes sent via SMS (62 percent).

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