Customer experience is shaping the usability of biometrics in banking
By Ján Lunter, the Founder and CEO of Innovatrics
The rapid acceleration of technology adoption and rising customer expectations over the past 18 months have led banks to double down on their digital efforts and are placing customer experience as the key way to stay ahead of their competition. Banks with top customer experience are seeing bigger revenues than their less customer-centric competitors, as well as larger wallet share, higher customer retention, and brand loyalty.
One technology trend transforming the customer experience in the banking system is biometrics, including facial and voice recognition. Biometrics is in use across various areas in the sector, from digital onboarding, transactions, ATM withdrawals to mobile and internet banking.
So, how is biometric technology redefining customer experience in banking?
An optimal customer experience means offering simplified banking processes which are frictionless, seamless, and on the go. The banking system has always been laden with personnel, piles of paperwork, and easily-forgotten passwords, but biometrics are streamlining many processes which have been previously offputting and complicated for customers.
Now, biometrics such as facial recognition enables customers to self-serve independently when logging onto online banking, while fingerprint scanning for ATM withdrawals will likely lead to the removal of card swipes in the future, dramatically increasing convenience in the customer experience. There are already examples of authenticating in the app to create a single-use code for withdrawal, bypassing cards altogether, and preventing skimming fraud.
Onboarding tends to be a process with several pain points for customers but biometric identity verification is massively reducing the sign-up time from days or hours to a matter of minutes, allowing customers to open an account independently and remotely using their smartphone or other devices.
For example, the traditional EU bank takes at least 45 minutes to open an account in-branch, with between 20 to 30 documents submitted and manually verified and certified by a personnel member. This consumes time and resources and leads to human-related errors, resulting in poor customer experience.
After the implementation of biometrics, new-to-bank customers can now self-enroll remotely in just two minutes, using a simple two-step process with their mobile device. We have successful examples in Tatra banka and Erste Group, both of which can go from a complete stranger to a client with a functional account in just one minute.
In the era of hyper-personalization, customers are looking for ultra-specific experiences tailored to their individual needs and pain points. Biometric technology uses unique biological characteristics, and what’s more personal than your own face, voice, or fingerprint?
Furthermore, the data gathered from biometric research can be leveraged to offer a hyper-personalized customer experience. For example, facial recognition software can determine a customer’s age remotely, knowledge with which service providers can offer highly personalized and priority services.
Key customer experience considerations for biometrics in banking
Errors impacting customer experience
Despite the major progress made in the accuracy of biometric technology in recent years, they are not 100 percent error-free. For example, although facial recognition accuracy increased 20-fold from 2014 to 2018, it still has around a 1 percent error rate (depending on the quality of the selfie). Systems can be set up to ensure that the client is who they claim to be, though it can sometimes refuse the logon even to the genuine clients. This is a sign of tightly set up security.
Even with fingerprint and iris recognition, considered more reliable, scratches on equipment, greasy fingertips, and wearing glasses can all impact accuracy. Errors make for a poor customer experience and can cause people to drop out of the onboarding process or abandon their transfers before completion.
Banks must prioritize implementing a failsafe customer-centric fraud resolution and backup authentication in the event of errors and issues to minimize the impact on customer experience wherever possible.
Safety vs. customer experience
Unlike other industries that use biometrics, where safety is perhaps lower down on the list of priorities compared to customer experience, high-level security is non-negotiable in banking. This presents a major challenge for banks: finding the balance between a streamlined and straightforward customer experience yet guaranteeing maximum safety and compliance with regulatory requirements.
Often, banks have to compromise on the customer experience to ensure the highest level of security their customers can trust. For example, many banks use multi-factor authentication, which creates a much less seamless customer experience through having to context switch between different devices and verification methods.
However, biometrics offers an ideal solution to this challenge by speeding up and simplifying arduous banking processes whilst ensuring a much higher level of safety than passwords and PINs, which are predicted to become obsolete soon.
Creating a consistent cross-functional customer experience
According to The Financial Brand “financial institutions try to assimilate technologies into their digital strategies without making sure these same technologies integrate well with one another.” A lack of consistency and poor integration across different channels and services leads to a jarring and confusing customer experience. The experience of biometrics in these systems needs to feel accessible and intuitive across all devices and services, whether it’s in-branch or remote.
Customers should see a certain level of uniformity in their experience and be able to locate and interact with the technology in the same way. Luckily, biometric technology has the potential to become the master key to unlock all of the doors in a banking ecosystem.
For example, in 2018, Bank of America championed biometrics through the launch of its App Linking feature. Using a fingerprint sign-in button inside its app allows customers to move between the Bank of America, Merrill Lynch, Merrill Edge, and U.S. Trust apps without having to authenticate their identity each time.
There are still many factors to consider when implementing biometrics in the banking system in order to optimize the customer experience to its fullest. This includes further reducing and mitigating errors in the technology, finding the perfect balance between customer experience and security, and ensuring consistency and full integration across all services and processes.
Nevertheless, biometrics have made big strides in transforming the customer experience in banking by making it more seamless, speedy, and secure than ever before.
About the author
DISCLAIMER: Biometric Update’s Industry Insights are submitted content. The views expressed in this post are that of the author, and don’t necessarily reflect the views of Biometric Update.