The use of biometrics by financial institutions is growing as banks strive to offer a combination of enhanced security and convenience to their customers.
In North America and Europe, regulatory compliance is driving the increasing adoption of biometrics, while the emerging regions of Asia Pacific and Latin America are realising the competitive advantage offered by self-service banking solutions.
Biometrically-enabled ATMs have become immensely popular in Japan and have seen widespread adoption in India, Latin America, and the Middle East.
Analysis from Frost & Sullivan finds that the worldwide financial biometrics markets earned revenues of $117,3-million in 2006 and estimates this to reach $2,07-billion in 2013.
“With the Federal Financial Institutions Examination Council (FFIEC) and the Sarbanes-Oxley Act pushing for stronger guidelines in multi-factor authentication and access to customer data and employee audit trails, financial institutions are looking to adopt biometrics to maintain regulatory compliance,” notes Frost & Sullivan research analyst Imran Khan. “These end users are beginning to realise the advantages that biometrics offer for enhancing security, time efficiency and convenience.”
In the past, the financial services sector viewed biometrics as a novelty and implemented solutions sporadically. With the technology now mature, institutions now regard biometrics as a suitable solution to combat identity theft and bank fraud. In the last two years, numerous financial organisations have deployed non-AFIS fingerprint recognition and voice verification to meet FFIEC guidelines.
However, financial institutions are slow adopters of new technology due to the complexity of integrating biometrics within the existing infrastructure. Moreover, low awareness of the ROI and low number of credible reference sites are major restraints.
“Lack of awareness has led people unfamiliar with biometrics to think of it an intrusion of their privacy,” notes Khan. “Furthermore, even if financial institutions are convinced of the cost savings and adopt biometric solutions, they may face resistance from their employees or customers, who do not want to submit biometric information.”