The overall market for biometric security is expected to reach $13.8 billion in 2015, according to ABI Research. While the government still accounts for most of the spending, it will be surpassed by company and consumer spending in 2018. Among the reasons for this growth are increased accuracy and growing consumer acceptance of the use of biometrics.
Biometrics provide a form of strong authentication that ensures a person is who they say they are. This makes them particularly useful for securing financial transactions, since biometric identifiers are hard to fake. Within the global banking sector, the Biometrics Research Group estimates biometric security will be worth $1.8 billion by the end of 2015, up from $900 million in 2012. This growth is driven by the need to combat identity theft and increasing instances of fraud. The researchers believe biometric technologies have the potential to reduce operational risks for financial institutions by at least 20 percent over the next 10 years.
Banks are using biometrics to increase ATM security, with customers required to provide fingerprint or even vein authentication when making transactions in countries such as Brazil, India, Poland and Japan. Several large banks in the United States, including JPMorgan Chase and Wells Fargo, are said to be exploring the possibility of using voice biometrics to screen customers against a database of fraud suspects.
Smartphones Spurring Biometric Security Take-Up
The inclusion of biometric readers as a standard feature on smartphones will help drive consumer acceptance of biometric security, which will provide the impetus for mobile banking and commerce. This will not only increase security for financial transactions, but will also provide much greater convenience for users, since smartphones can securely store users’ financial details so they don’t have to remember passwords or use a security token to access their banking and payment apps. In February, RBS and NatWest in the United Kingdom announced that users of their mobile banking apps can now use the fingerprint scanner on their iPhones to access their bank accounts, replacing the need for a password.
According to research from Visa Europe, three-quarters of young adults aged 16 to 24 are comfortable with the use of biometrics. The same proportion said they would be comfortable with the use of biometric security to make payments, and the majority said it would make their lives faster and easier.
Innovative Uses for Wearables
In the United Kingdom, the Lloyds Banking Group’s subsidiary, Halifax Bank, has started to test the use of biometrics via wearable devices, banking on the rising popularity of wearables. It is currently testing the use of electronic wristbands that detect the wearer’s unique heartbeat patterns. The wristbands work in conjunction with smartphone apps that verify the heartbeat patterns so individuals can be granted access to their bank accounts. According to Halifax, the use of heartbeat patterns as a biometric identifier is even more secure than fingerprints, which could theoretically be faked.
Online banking has transformed the financial services industry, enabling institutions to provide better service to their customers while reducing operating costs. However, this requires banks to consider the use of stronger forms of authentication to ensure customers can verify their identity. In the past, many banks provided their customers with hardware security devices and tokens to use as a form of strong authentication. Now, the fast-growing use of mobile devices such as smartphones is spurring the mobile banking and commerce market. However, convenience is a major factor for smartphone users, which makes the use of hardware tokens unsuitable. Biometric security will provide the answer for banks and other financial institutions, who will be able to cash in on growing consumer acceptance of biometrics to improve both security and convenience.