Mar 28, 2022
The role of biometric technology in the fintech revolution
A few decades ago, biometric technology seemed like a future technology that would take a long time to arrive and be used in our everyday lives. However, advances in the development and implementation of these systems to recognise each person’s unique traits have turned fiction into reality and have arrived much sooner than expected.
Technology companies in the financial sector (known as fintech) are among the main promoters of biometric technology because they can improve customer experience and the security of their data. We tell you about some of the keys in this post.
What is biometric technology? The ally in Fintech security
Biometrics is the precise recognition of individuals based on their inherent physical or behavioural traits. In other words, it involves identifying patterns that are unique to each person, such as the face, the voice, the fingerprint, or the heart rate, and using them to identify users of services of all kinds.
As these patterns cannot be imitated, they are ideal for protecting sensitive operations such as remote financial transactions. Through biometric technology solutions, Fintechs are solving the problems associated with the anonymity of the internet and social media while providing intuitive and practical solutions for the day-to-day operations of their customers and employees.
Thanks to artificial intelligence, machine learning and the development of recognition algorithms, advances in the identification of individuals prevent and reduce crimes such as identity theft or money laundering and allow Fintech or financial sector companies operating in the online world to meet the security and KYC requirements of the entire financial sector.
Advantages of biometric technology in fintechs
The growth of the fintech sector has exploded in the last decades by offering innovative products and services, with a strong preference for remote banking solutions, sometimes based exclusively on app-based customer service.
A biometric technology software is an indispensable tool of neo banking and digital banking for the remote verification of customers’ identities.
However, we must not forget that its use is not exclusive to the Internet and apps. Electronic IDentification‘s biometric technology is also applied in bank branches as an assistant for sales agents, and even in ATMs.
Overall, the main uses of biometric technology in the Fintech sector are three:
- Onboarding: initial verification of a customer’s identity in order to register them as a customer by registering their face.
- Contracting: signing of contracts through prior verification of identity.
- Authentication: access to web platforms, mobile applications, intranets, branches… as a second identification factor.
Here are some examples of the use of these technologies.
Facial recognition for apps
Many mobile phones already use a biometric authentication technology to unlock the device, open applications or make payments. In other words, mobile phones already use facial recognition for certain purposes.
While systems such as fingerprints also exist, solutions such as SmileID combine facial recognition techniques with a proof of life, in this case a smile, for greater security when authorising access to an application. Face-based identification technologies have the advantage that they can be used on any device equipped with a camera.
Unlocking / opening vehicles via an app
Applied to car, scooter or scooter rentals, biometric technology solutions enable car sharing and other sharing economy initiatives.
A mobile application replaces the traditional key or usage key to unlock the vehicle, start it and keep track of its usage for billing. This enables very fast and contactless rental of available cars.
Access control / badging in companies
Fingerprint recognition is the most widely used method for access control in corporate buildings, followed by face identification. Biometric technology is on the rise in this field because it reduces staffing requirements and the risk of loss or theft of keys and access cards.
The same system is also applied to clocking in and timekeeping in many companies and is especially useful when employees are working remotely.
Access to public facilities
The application of biometric technology in establishments open to the public, such as bank branches can also be done. It serves as an access control measure and allows queue management and more efficient service by reducing waiting times.
Biometric technology is already being used in airports such as New York to speed up procedures (check in, check out, airline access, customs control) and to ensure the security of passengers and facilities.
Facial recognition systems can also be used at sporting events and shows not only for access to the venue, but also for security control in case of possible incidents. The use of a biometric technology software to identify and restrict access to stalkers or people with restraining orders at concerts, plays, matches, etc. has been successfully tested.
Payment in retail
As obvious as it is, we cannot fail to mention the advantages of biometric technology in retail payment systems. Given the increasing use of mobile phones as a quick payment system, the use of voice, face or fingerprint patterns allows counteracting the risks of mobile phone use, such as unintentional payment, in a simple and effective way.
Our SmileID solution is one of the most advanced on the market and provides a simple way to make payments with a dataphone.
Customer registration and onboarding
Another of the most interesting uses of biometric technology and particularly useful in the Fintech sector is the onboarding of users. This requires completing the process of verifying the customer’s identity, checking their documentation, and registering the biometric pattern to be used.
With technologies such as VideoID, digital onboarding is reduced to a few minutes of document verification and video identification. It also has the advantage of being used synchronously (in a videoconference) or asynchronously (post-processing by an agent).
How to apply biometrics in Fintech?
Biometric technology has undoubted advantages for the smooth running of the Fintech business, for the employees and for the users:
- Increases customer satisfaction and facilitates the customer relationship thanks to a unique user experience.
- Simplify processes and employee tasks.
- Improves the security of remote and office operations.
- Prevents crimes such as identity theft and money laundering.
- Reduces paper waste by keeping documentary evidence digitally.
In addition, Fintech has enabled the banking industry to operate anytime, anywhere, providing a 24-hour service. For the public, particularly millennials and centennials, this translates into greater ease in performing tedious tasks such as paying bills or reviewing personal finances.
This requires a biometric technology in banking that are both easy and quick to use and that ensure biometric security measures.
Enhance your customers’ experience with Electronic IDentification’s biometric technology
In remote systems, whether via the web or an application, waiting has an even greater effect than in the office or branch. Every second of delay on the Internet makes the customer experience worse, as immediacy is demanded from digital technologies.
Electronic IDentification’s biometric technology is specially developed to avoid unnecessary delays in any of the services required. Our VideoID technology enables onboarding in 30 seconds automatically and in full compliance with the European eIDAS regulation.
And the SmileID solution detects the customer’s or user’s smile immediately, in a system that is faster the more it is used by applying Artificial Intelligence and Machine Learning systems.
Ease is as important as speed of access for a satisfactory experience. Electronic IDentification’s facial recognition system is simple and intuitive for the user and requires no more than a camera and internet access. In addition, with face identification as a biometric standard, transactions can be made or transactions can be viewed from anywhere, even in background noise or in complete silence.