5 Ways Biometric Technology is Impacting the Financial Industry

Banking threats are on the rise, threatening the security and integrity of the financial industry. Nearly 70% of global banking and financial organizations are experiencing active threats from external perpetrators and organized crime groups building stealthier ways of accessing financial information resulting in billions of dollars lost worldwide.

Protecting yourself against the devastating impacts of fraud and cybercrime can be difficult, but it’s not impossible. Biometric technology is changing how individuals and large financial organizations defend themselves against security threats that could result in significant financial losses.

Want to learn more about how biometric technology is changing the financial industry? Keep reading to learn the five ways individuals and banking organizations are fortifying themselves with the help of biometric technology.

What is Biometric Technology?

Biometric technology refers to security systems that rely on physical characteristics or measuring biological properties to determine and verify individuals to gain access to secure systems.

A few prominent examples of biometric technology include scanning fingerprints or recognizing retinas. These features are unique to each individual, so systems verify the identity of the person attempting to gain access to secure systems like bank accounts by scanning these features.

Biometric technology has been rolled out across many industries and products, including transportation, such as airport security, cell phone access, healthcare, and even in-home and workplace security. Openpath’s biometric access control guide states that businesses and leaders in the technology industry increased their spending on biometric technology by 50%, demonstrating the importance of these systems.

Biometric technology offers individuals and businesses more peace of mind, ensuring no unauthorized individuals can gain access to sensitive information.

Five Ways Biometric Technology is Impacting the Financial Industry

Below is a guide to how biometric technology is changing how the financial industry operates and interacts with its customers.

1. Secures Personal and Commercial data

Companies must make a concerted effort to secure their commercial data at all times. This limits the negative implications of data breaches that cost global businesses millions yearly! But this doesn’t need to be the case. Biometrics is changing this as it’s challenging to replicate or steal biometric data to access secure systems.

With this, financial organizations and individuals can secure their or their employee’s sensitive data and continue trading and accessing accounts no matter the threat. This ensures that hackers don’t gain access to clients’ banking information and personal data via cyber attacks.

Reducing the number of data breaches with the help of biometric security also helps establish more trust in financial organizations, encouraging customers to continue doing business with them and securing their data.

2. Provides a More Secure Login Experience for Banking and Investment Applications

Mobile banking has revolutionized how many of us access our bank accounts, transfer money to our friends and process our income. In North America, it’s estimated that 261 million bank account holders use online banking, and forecasts suggest that this will rise to 279 million by 2024.

As this has grown, banks are using biometric technology such as fingerprint access to ensure no other users apart from the bank account holder can access sensitive information. This means the user doesn’t endure a compromised bank account if their mobile phone is lost or stolen.

Investment apps have experienced a sizable spike in users over the last few years as people seek more accessible and user-friendly ways to begin their investment journey. Like any financial application, it’s integral for investment applications to provide a secure login experience to ensure no other user can access banking information inside the user’s profile.

Typically, investment apps require fingerprint scanning before users can access their accounts, meaning no one other than the account holder can access their information.

3. Remote Access to Confidential Financial Data

Financial organizations constantly need to think about customer experience when designing applications. Providing a user-friendly interface is integral to retaining a loyal customer base, ensuring that all users can access their essential information wherever they are, no matter the time of day.

One of the key benefits of using biometric technology is that banks and financial organizations can provide their customers with remote access to their bank accounts and essential financial information. Customers no longer need to find a local branch or contact their provider directly for their information.

4. Increases Physical Security for High-Security financial institutions

Biometric security doesn’t just work for the digital world. Utilizing biometric technology is a crucial step in using automated systems to bolster the physical security of high-security financial institutions. Financial institutions need to provide a high degree of physical security to thwart attempted robberies that can result in significant financial losses.

Using biometric security allows financial organizations to allocate access authorization to specific individuals, using their biometric data to access certain rooms or buildings. Installing smart locks that use fingerprints to unlock is an excellent way to secure high-security areas in a financial institution and ensures that businesses have ultimate control over access rights!

5. Lowers Operational Costs

In these times of high inflation and increased costs in just about everything, lowering operational costs and financial losses needs to be a priority for financial organizations. Utilizing biometric technology might not be the first thing you consider when lowering operational costs. Still, this security measure can save organizations a considerable amount by thwarting identity theft, cyber-attacks, and fraud.

Global losses from payment fraud stood at an eye-watering $32.29 billion in 2020, costing individual financial organizations millions in lost revenue. If that alone isn’t enough to motivate you to use biometric technology, the average cost of payment fraud is increasing and is expected to cost well over $40 billion by 2027.

However, there are ways financial organizations can secure themselves against huge losses due to fraud, cyber-attacks, and identity theft. IBM estimates that organizations that leverage technological tools such as AI and automated techniques like biometrics can save around 3.05 million on data breaches.

Summary

As the modern world continues to provide more threats to the financial industry, it’s now more important than ever for companies to move at pace and adopt biometric technology to limit the damaging effects of fraud, identity theft, and cyber-attacks. These five ways that biometric technology is changing the financial industry prove that this automated technique offers several benefits to financial companies, including optimizing end-user experience and reducing the amount of money lost to data breaches and cyber security threats.