Android and Apple fingerprint scanners, Samsung’s new iris scanner, Windows Hello… biometrics as a consumer proposition have been around for many years but are only gaining traction in the market now.
Previous attempts to include ways to unlock devices using biometrics failed as they required absolute precision from the user, and even then, did not always work. Modern biometric technology is far more reliable and more pervasive. Unlocking your iPhone using Touch ID has become commonplace for most users. This consistency and familiarity means that consumers are happy to use them. In fact, two thirds of European consumers want biometrics for securing payments according to Visa Europe.
Fingerprint scanners and other biometric technologies are not yet available with the majority of devices, but this will change. Market research firm Acuity estimates that about 750 million smartphones featuring biometric technology are currently in use, accounting for over 30 percent of the market. By 2018, all shipments of smartphones will feature the technology, and biometrics will proliferate to 100 percent of the installed base by 2020.
Another major shift is the application of biometrics. Unlocking devices was just the start. Banks such as HSBC, First Direct and most recently Citibank are enabling access to accounts via Touch ID. Incumbents like Lloyds Bank, challengers like Atom Bank, and the card scheme Mastercard are rolling out ‘selfie authentication’, allowing transactions to be authenticated via facial recognition.
By 2020 accessing financial services using biometrics will be the norm. Those providers that do not offer biometrics will be outliers, cast as antiquated – either racing to catch up with their rivals, or attempting to appeal to a demographic that either distrusts or does not have access to biometrics. The latter group will not be a large one with 100% market penetration forecast in under four years.
Banks, payment companies and other financial service providers now find themselves in a race to jump on the biometric bandwagon.
The rise of self-service banking
Dissatisfaction over customer service is one of the biggest drivers of bank switching. ‘Customer services’ now means much more than how you are served in a branch or on the telephone. It also covers the interactions you have with your bank via technology. With UK banks alone shutting 1,700 branches in the last five years with many more planned, self-service channels – ATMs, online banking, mobile apps, and automated telephone banking – will be the way that customers will bank in the future.
If customers cannot authenticate using a fingerprint, just like their friends can with other banks, then this will be a suboptimal experience and “poor customer service”. Customers will switch because they cannot access their account using their devices’ fingerprint scanner. Several banks we work with reported that up to 80% of customer complaints were because of authentication issues prior to rolling-out modern technology.
Racing at the right pace
Any race that means implementing technology is bad news in a competitive market – the rush to implement services that keep customers happy could land first-movers with quickly-obsolete tech. Fingerprint scanners are currently in vogue, but there are other authentication methods gaining serious backing, and overtake fingerprints if they prove popular with consumers.
- Apple, Microsoft, Google and Amazon are keen for consumers to use their AI assistants, and there have been some promises made over the use of natural language. If these companies can get consumers happily talking to their devices, voice prints might be a simpler way to authenticate.
- The increased use of Fitbits and other wearables means many people have a device that is constantly recording data about their heartbeat, their location, and their habits. Using this data to authenticate someone may mean a completely frictionless process – no need for any input at all. Privacy is a major challenge however.
- The Galaxy Note 7 may have been recalled but it’s unlikely we’ve seen the last of its iris scanner. Selfie authentication, which doesn’t require a specialist camera, has also seen some traction in recent months – just snap a photo and facial recognition technology does the rest.
- The future may simply be unknown. Nose shape, finger veins, eye movements, and even smell have been mooted as potential biometric authentication methods. If this or another technology grabs the public’s imagination, then we could have an unlikely scenario where our scent becomes the biometric marker of choice.
How can a bank looking to meet its customers’ demands hope to prepare for a scenario where either eyes, faces, vein patterns or even all three become the authentication method of choice?
The simple answer is that they don’t.