Biometrics will authenticate ‘vast majority’ of payments within ten years: report
Biometrics will likely be used to authenticate the vast majority of payments within the next ten years according to 85 percent of global executives surveyed for a new report from the Economist Intelligence Unit and TransUnion.
Smooth digital transactions have become essential to business survival, not just to provide a competitive edge, another 85 percent of respondents say in the report “New Dimensions of Change: Building trust in a digital consumer landscape.” The reports key findings involve the importance of national digital IDs in fraud prevention, where they can play a valuable role according to 79 percent. The vast majority also see super-apps (like WeChat and Alipay) playing a “dominant” role in digital commerce over the next five years.
“While many respondents believe super-apps will be involved in the vast majority of transactions, it’s important to note that a majority of executives think that identity-authentication methods employed by super-apps present ‘worryingly high risks’ to data privacy, demonstrating that association with super-apps can expose brands to breaches in consumer trust,” TransUnion Senior Manager Brooke Snelling tells Biometric Update in an email. “Based on executives’ answers, it is clear that biometrics will play an essential role in risk-based authentication for fraud prevention and security if super-apps are to truly meet their potential.”
Adjusting to the changes already comes with challenges, as two-thirds of executives whose companies changed their digital transaction process in reaction to the pandemic experienced glitches.
The greatest benefit to the use of AI in transactions is in fraud prevention and improved security, according to 43 percent of executives, ahead of the 29 percent who identified benefits to the customer experience as the main benefit.
The security features built into mobile phones, including native biometrics capabilities, vary significantly depending on the price-point of the device, the report observes. While not many executives see this as a major problem for their business, the majority see it as a “slight” or “moderate hindrance.”
Snelling notes that governments have subsidized mobile phone access in some places but the Economist Intelligence Unit found many of those phones do not have particularly stringent security protocols, and some government-subsidized low-cost phones in the U.S. were even found pre-loaded with malware.
“It is clear that any program meant to provide the most up-to-date phones must include the most secure options including the ability to authenticate transactions with biometrics,” Snelling argues. “For businesses, they must recognize that those with less financial opportunities might not have the most current and therefore secure phones. In order to do business with them, businesses must offer other ways to authenticate beyond biometrics with features like one-time password coupled with other authentication methods like step up questions depending on the risk associated with a transaction. Another ‘invisible’ authentication method that can be used is to assess the past transaction behavior associated with a device and/or behavior a device is exhibiting at the time of a transaction like geolocation, recent amount of transactions conducted from the device and more.”
The survey also found that executives see slightly more of their customers as comfortable sharing personal data, including biometrics, with private-sector firms (73 percent) than government (71 percent), though the balance of trust between the public and private sectors varies between countries.
TransUnion launched a fraud prevention solution with biometrics and document authentication for UK businesses earlier this month.