Imagine walking into a bank and having your account flash
onto the teller's computer screen before you even say a word. Or consider what
it would be like to call your institution's customer service line and not have
to bother going through the laundry list of your name, birth date, PIN and
security question.
That could all become a reality in the not-so-distant future. Thanks to facial
recognition, voice recognition and palm scan technology, banks are already
experimenting with ways to verify customer identities without using passwords or
traditional IDs. And yes, just like in the movies, you may one day be providing
a retina scan to get into your bank account.
It all started with a fingerprint sensor
Using a person's physical or biological characteristics to verify
identity is known as biometric authentication. It may seem like
something out of science fiction, but the technology already exists to
scan retinas, map veins in hands and recognize unique voice patterns.
The hurdle is getting people to actually agree to use these forms of
authentication.
That's why experts say Apple's Touch ID is important. The company's
iPhones have been equipped with fingerprint sensors since 2013, and
other smartphone manufacturers have since followed suit. As a result,
many apps, including mobile banking apps, allow customers to log in
with their fingerprint rather than a password. It's paved the way for
fingerprint scans to be the first widely used form of biometric
authentication.
"I think we're getting to the point where people are getting
comfortable using fingerprints on their phone," says Greg Crouse,
managing director in the financial services practice at Navigant
Consulting. Based on that success, smartphones could lead the way for
the next big push in the world of biometrics. Newer phones might soon
begin to include facial recognition, which could mean it will be only a
matter of time before that too is embraced by consumers.
Other types of authentication
While fingerprints are already in the mainstream and facial recognition
is poised to follow, those aren't the only forms of biometric
authentication being used by banks. Last year, financial technology
firm Fiserv announced the launch of Verifast: Palm Authentication,
which identifies people based on the vein pattern in their palms.
Currently, about 50 banks and credit unions nationwide are using the
technology.
Voiceprint and eye scan technology have also been piloted at
institutions such as Wells Fargo, USAA and Ally Bank. "We did some user
testing on eye scans, and it creeped most people out," says Scott Hess,
vice president of innovations in the digital channels group for Fiserv.
Among other concerns, people worried about where their retina patterns
were stored and whether they were secure.
Banks looking to do away with passwords
Biometric authentication comes with two benefits: It can reduce fraud
and increase convenience. "Passwords are a major pain point," says Leo
Loomie, senior vice president of client services at Digital Risk, a
company providing technology solutions to the mortgage industry. "They
are extremely insecure."
Eliminating passwords in favor of biometrics could benefit both banks
and consumers. "A lot of the biggest banks we work with are looking to
get rid of passwords using a layered approach," Hess says. That means
allowing the use of biometric authentication while also checking other
data to reduce the possibility of fraud. For instance, an app might use
facial recognition or a fingerprint along with a phone's location or
other information. If someone is logging in from an unusual spot or
behaving outside of what would normally be expected, the app might
prompt for a password or different form of identification.
Avoiding fraud and protecting privacy
Looking for behavioral cues to prompt for additional verification is
just one way banks can avoid fraudulent activity. Hess says step-up
authentication is another avenue available to financial institutions.
This allows simple forms of verification, such as a fingerprint or
facial recognition, to do basic activities, such as checking account
balances. But additional identify checks are required before more
sensitive transactions, such as transferring money to an outside
account.
"The end state is an ATM scanning your face and retina and knowing who
you are," Crouse says. Once biometrics are integrated into the banking
experience, they should be seamless and involve multiple levels of
confirmation. That's the layered approach banks are looking for to
avoid the problems that could occur if someone happens to get ahold of
one piece of biometric data. "Once you start combining them, it becomes
extremely unlikely someone will be impersonating [someone else],"
Loomie says.
Of course, some people may never be comfortable using their
fingerprints, faces or retinas to do their banking, and experts in the
field agree it's almost guaranteed people will have the option to opt
out of biometric authentication. However, don't be surprised if your
bank starts insisting on longer passwords, two-factor authentication
and other safeguards that may just have you wishing you could withdraw
your cash with a simple scan of your hand.
