Gen Z thinks banks are sus, but biometrics could help, says a new report
Young people want their banks to be more secure, and many do not trust their financial institutions to provide the highest level of security, according to new research from PMYNTS and Entersekt. Biometrics are increasingly seen as part of the solution.
The joint publication, entitled “Consumer Authentication Preferences for Online Banking and Transactions”, is based on a fall 2022 survey of 2,584 people in the U.S. It shows that, while the majority of people believe their financial institutions provide adequate protection for their personal information and keep their accounts secure, more than 10 percent of respondents in Generation Z did not agree.
“FIs are facing a clear and present threat to their consumer banking customer base,” the report states, in blunt language. “To ensure they can maintain customer satisfaction and ultimately retention, banks and credit unions should explore new, customer-preferred fraud prevention solutions.”
These include biometric authentication tools. Respondents answered in favor of biometric security over passwords, and 47 percent said they had used biometric security methods in the past month. Among those, 52 percent said they preferred biometrics for authentication.
“We attribute consumers’ rapid adoption of and preference for biometrics most to their belief that these methods offer a higher level of security,” says the report. “Our research found that 31 percent of consumers view biometrics as the most secure method for authentication, while only 9 percent of consumers hold the same view of passwords. The data also shows that respondents see biometrics as slightly more convenient, faster and easier to use than passwords.”
Mobile banking crosses a threshold of consumer trust
In keeping with the general shift toward living through our smartphones, PYMNTS and Entersekt’s survey found that 57 percent of respondents said phones offered equivalent security to that provided by desktops or laptops. More than 60 percent accessed banking services through their smartphones, and 62 percent used their smartphones to pay for goods or services.
“The majority of consumers now view smartphones and computers as equally secure for online financial activities, and most consumers see biometric tools, which smartphones tend to conveniently provide, as the most secure way to authenticate a transaction,” the report says.
Returning, in its conclusion, to urgent language, the report makes a clear case that financial institutions need to provide tighter, more visible and more trustworthy safeguards. Those who ignore the message risk losing customers to banks that prioritize security. As the sector changes, biometrics plays a key role.
“Consumers want their banks to do more to ensure the security of their online financial transactions,” it says. “From a customer’s perspective, this is not only about the outcome – minimizing fraud and identity theft – but also about having access to their preferred authentication methods, such as biometrics.”