Enhancing security and CX using biometric authentication
Just as there has been advancement in technology, the fintech sector has also been on the rise. With a 25% compound annual growth rate, the global fintech business is predicted to be valued at US$310bn by the year’s end.
However, with the continued growth of the fintech sector, cyber attacks within the industry have risen substantially. The Global Intelligence Office report predicts that third-party, zero-day vulnerabilities and ransomware groups will adapt to the changing cyber environment and continue to increase.
As the chances rise of fintech firms' security being breached because of the increased cyber attacks, fintechs need to be able to protect their data, whilst at the same time providing exceptional customer service. Could biometric authentication help fintech firms do both?
A cyber attack is a cyber attack, no matter the amount
Whether substantial or minimal amounts, online fraudsters have increased the rate at which they attempt to defraud people and businesses. Midway through 2021, online fraud saw a rise of 285% compared to previous years. This has come in tandem with the increase in digital lending from fintech firms.
Though it may seem impossible for fintech firms to tell whether they are interacting with an online fraudster, they can do so via biometric authentication technology such as Face ID. With the speed and accuracy that Face ID operates, fintech firms will be able to authenticate and confirm that they are interacting with a customer and not an online fraudster. This is possible due to the uniqueness of every individual's biometric makeup.
Should fintech firms embrace biometric authentication, they will be improving their security. But would it improve customer experience? Or would it hinder the customer experience for people interacting with them?
Biometric authentication can benefit customers too
Increasingly across all sectors, customers are expecting contactless experiences. Out of a total of 4,000 people across the US, UK and Australia, 75% had used contactless payments to purchase something. In addition to this, 56% of consumers surveyed claim to prefer contactless payments rather than entering a PIN.
In a sector that heavily revolves around technology and its integration in the process of transferring money, customer experiences must be seamless and safe. This can be achieved via the use of two-step authentication incorporating both biometrics and digital ID. By allowing customers to be able to identify themselves first by their digital identity and then by biometric authentication technology, such as liveness detection, fintech firms would not only be improving their customer experience but also ensuring their safety.
So, with the developments in technology, fintech firms cannot afford to stay still. To do so could result in them becoming vulnerable to cyber attacks and loss of customers as a result. At the rate at which contactless experiences and security are being used in all sectors, is it a question of if and when fintech firms will implement technology as such?
Biometric authentication can work hand-in-hand
Though it can be perceived as a frightening thought, fintech firms have to accept that cyber attacks are becoming more advanced in the way in which they are being done. No longer are cyber attackers using one method to infiltrate or attack fintech firms, they are using a variety of ways.
To combat this, fintech firms should look to technology that will enable them to identify the real from the fake, the innocent from the criminal. Doing so might save them countless amounts of money as well as customers.
About the author: Jonathan Andresen is Senior Director for Incode Technologies, a San Francisco-based ID verification and biometric authentication platform. Based in Singapore, he has comprehensive experience in marketing management and executing metric-driven marketing programmes.