Canadian banks are putting their fingers on the benefits of biometrics

A research report predicts customers will increasingly want to use their bodies to access financial data. The researcher outlines some important next steps

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banking biometrics Canada

I suspect that sometimes, right after I’ve checked my bank balance – and seen the grand total go down a bit – my blood pressure goes up a bit.

That’s probably just one reason banks use biometrics to authenticate customers’ identities right before they begin transactions. I don’t know if anyone’s actually invented a way to authenticate user identity via blood pressure yet. But I do know that RBC, the biggest bank in this country, launched pilot tests of Nymi, a Canadian made wristband that verifies your identity based on heart rhythms, last fall.

RBC announced more biometrics news last week, unveiling fingerprint authentication for its new RBC Wallet Android app at Google’s annual I/O developer conference. Other Canadian financial institutions are also getting into the game. TD Waterhouse already uses voice biometrics to verify the identity of customers who use telephone banking. Scotiabank’s Tangerine division launched Canada’s first mobile banking app with voice authentication last October.

Get ready to see even more of this. A new report from UK-based Goode Intelligence predicts the number of customers using biometrics to access banking services will jump from 450 million in 2015 to more than one billion by 2017. The study suggests biometrics will become the most common method of bank user authentication by 2020.

In a 2014 survey by the Deloitte Center for Financial Services, 72 per cent of consumers said they would welcome biometric security features like eye or fingerprint scanning if they were added to mobile banking services.

Speaking of mobile, just as your smartphone can make banking more convenient, so can biometrics. Why bother carrying a bank card or memorizing a PIN if you can just stare into an iris scanner at an ATM or make a fingerprint on your phone?

So biometrics, especially coupled with mobile or wearable devices, can offer consumers greater convenience when it comes to banking. But what do the banks – and their IT managers – get out of this technology? I got some answers during a cross continental phone interview with Alan Goode, the founder of Goode Intelligence.

Convenience: Yep, biometrics can make security more convenient for bank CIOs and CISOs, too.

“It’s not a huge amount of infrastructure change or a huge integration effort,” said Goode. “You need some sort of security for the (biometrics) apps on the network side to validate it, servers to store the palm or finger prints and obviously some very tight security to make sure you’re protecting that biometric database.”

In other words, installing a biometric scanner on ATMs or releasing a mobile banking app with biometrics baked right in is far less hassle than providing plastic banking cards to millions of customers. Which leads to Goode’s next point …

Cost containment: “One of the great things about biometrics is there’s very little investment from the bank for a lot of this,” Goode told me. “It actually reduces their costs because they don’t have to issue OTP (one-time password) tokens or smart cards.”

“The hardware (i.e., smartphone) is being supplied by the Apples and Samsungs of this world,” he noted. “(Banks) just install the authentication servers. It’s a change and you need new servers and licenses. But it’s not significant compared with other authentication solutions.”

According to Goode, voice authentication is also low-cost and requires no new hardware. “It’s just an app on the STK (SIM application toolkit).”

Compliance: Goode pointed out that more jurisdictions in the world are moving toward two-factor authentication requirements for banking transactions. Although that’s easy to provide using the combination of a smart card and a PIN at an ATM, “smart cards just don’t work on a mobile phone,” he said.

But both fingerprint and voice authentication do work on a smartphone, he said. “With biometrics now, with the rise of mobile and e-banking, it means (banks) can comply with those regulations where they exist.”

All of these biometric benefits may help lower the blood pressure of network administrators in the financial services sector. Too bad that won’t happen to my own BP every time I check my bank balance.

Image courtesy of Danilo Rizzuti at FreeDigitalPhotos.net

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