Know your algorithm: Future Identity report highlights importance of biometrics fundamentals
Future Identity has released its latest digital report focusing on “the high cost of cheap biometrics,” which argues that choosing the right identity technology partner can make a substantial difference for banks.
The document summarizes case studies about banks using Innovatrics’ biometric technologies.
Future Identity opens by stating that 75 percent of banks have, or are planning to deploy, artificial intelligence (AI)-based biometrics in the next three years.
Because of this, the development of such technologies has progressed greatly in recent times, as also highlighted by recent data from Future Market Insight (FMI) suggesting the identity verification market is estimated to reach a value of nearly $40 billion by 2032, with biometrics being at the forefront of this growth. That forecast represents compound annual growth of nearly 15 percent from an estimated $8.6 billion in 2021.
The biometrics industry has recently experienced rapid growth as a result, the report says.
“Hundreds of seemingly similar solutions are on the market but rushing to adopt without fully understanding and evaluating the technology could have disastrous consequences,” the document reads.
To assess the validity of biometric solutions in banking, the report analyzed different use cases, including insights from Erste Bank, Tatra Banka, and Home Credit’s executives.
“As this collection of experiences illustrates, selecting the right identity partner was a crucial step in enabling [these firms] to achieve their strategic goals,” explains Innovatrics’ DOT Business Unit Director Daniel Ferak.
“Vendors that develop in-house technology, tested by independent labs, and proven in countless projects, can offer not only great technology but a trusted partner with the expertise and experience to guide them through the entire adoption journey.”
“The truth about the biometrics industry is that there’s a relatively small number of excellent vendors. Around that, there’s a huge number of ‘[identity verification] providers’ who offer very little transparency in terms of their core biometric technology.”
According to the executive, many of these providers offer unproven, untested, or open-source biometrics.
“This poses a huge risk to organizations in terms of poor performance, low accuracy, demographic biases, etc.”
“KYA (Know Your Algorithm) is just as important as KYC (Know Your Customer),” Greene concludes. That notion was also suggested in a NIST report and emphasized by Patrick Grother in conversation with Biometric Update in 2020.
To tackle these risks, it is important to fully evaluate the limitations, quality, and fairness of a verification technology before investing, according to Laura Camplisson, Future Identity Portfolio Lead at VC Innovations.
“By implementing accurate, fit-for-purpose solutions from a reputable vendor, these leading financial institutions and integrators steered far clear of the costs of bad AI.”