Biometric authentication may be coming into its own as a tool to aid financial institutions and payments companies in serving their customers.
At financial institutions, as much as $20.75 million is saved annually using biometric authentication instead of SMS one-time password services, says Reston, Va.-based Daon Inc., a biometric-services company, in a report based on a survey of more than 40 executives across the globe. Research firm Goode Intelligence conducted the study for Daon’s “The Business Case for Biometric Authentication” report.
Among its other findings is that these FIs saved up $6.25 million in reduced contact-center calls and saw annual savings ranging from $1 million to $2 million because they used a single authentication platform.
Prospects for the increased use of biometric authentication are positive. Over the next five years, Juniper Research predicts the estimated number of users of the technology will increase from 429 million today to more than 1.5 billion.
A big driver of this will be digital onboarding, Clive Bourke, Daon president for Europe and Asia-Pacific, tells Digital Transactions News. Another driver will be using the technology with existing customers.
In the case of onboarding, 67% of respondents use it to support customer acquisition by verifying identity and to assist with digital customer onboarding, Daon says.
With existing customers, using biometrics may make an experience, such when a customer gets a new mobile device, less troublesome, Bourke says. In some instances the registration process may be akin to a new customer, which could irritate a long-time customer. With biometrics, the process could be simplified because the bank or payments companies already would have a biometric identifier enrolled from an existing customer. That could be a fingerprint, facial file, or voice, which is popular for call centers.
Within payments, biometric authentication, which gained widespread attention four years ago with the launch of the Touch ID-enabled Apple Pay, can aid in reducing abandonment rates, Bourke says.
“The biggest comment we learned from payments customers is it has helped with abandonment,” he says. When using an authentication method like one-time passwords, many consumers would not follow through on the process, such as for a password-recovery process. In some instances, that resulted in a double-digit abandonment rate, Bourke says.
Biometric authentication, whether it’s via fingerprint scan, facial recognition, or voice ID, really stands out when coupled with other authentication tools, such as device metrics or behavioral biometrics, Bourke says. The latter can quantify a consumer’s typing characteristics, the angle in which they hold a device, and similar measurements.
Labeled continuous passive authentication, this type of biometric authentication will be key to helping banks and payments companies better know their customers, Bourke says.