When thinking about biometrics or facial recognition technology – one may conjure images of James Bond and his use of the latest spy gadgets that made it easy for him to slip in and out of any situation! Well this same technology that helped to enhance our entertainment is making strides in the real world. Whether it is iris scanning or finger print reading, biometrics offers the promise to make a more personalized, secure option that can be impenetrable to breaches.
And the financial services world has taken note.
Though not exactly new to the world of finance, interest in biometric technologies seems to be moving at a rapid clip and is setting the stage for a potential innovation revolution in an industry that is grounded in traditional approaches.
Voice Recognition Tech Creates a New Breed of Technology
Just a few short years ago, voice recognition was the technology du jour that helped to streamline service operations across call centers, and especially in banking.
Fast forward to 2017 and we see much of the technology moving to “the front of the house” of financial institutions. Bank of America has offered steady technological advances over the past few years that has ultimately offered two-fold value for the bank – redefining the brand and overall value proposition, while at the same time opening new opportunities and options to service customers. For example, in August of 2017 Bank of America looked to bring iris scanning power into the hands of customers – literally. The partnership with Samsung would ultimately allow customers to access mobile banking apps by scanning their eyes. This became a starting point to the bank’s commitment in building technology as senior executives at the bank have supported the claim that “passwords will be a thing of the past.”
Retail banking seems like a true hot bed of innovations, but the commercial side is starting to enter the biometrics game as well. In May of 2018, HSBC began offering Face ID to its corporate clients for app log-ins. The new functionality is meant to provide an overall better customer experience for corporate clients, with login times that are less than a second. And perhaps most important for corporate clients, is the added layer of security that biometrics offers; helping to offer secure transactions that can be north of millions of dollars.
Hello Biometrics, Goodbye Friction
The solutions offered by biometric applications is apparent across several different industries. So why now? And why banking? Banks, cards networks, and issuers are all clamoring to refine the customer experience and support greater payments by their customers. And the one barrier that stands in their way is payment friction. By eliminating friction in the payment process, customers are happy with the process and come to expect that level of service – while financial institutions benefit by supporting a higher volume of payments through a more streamlined process.
Where are we heading?
The innovations in biometric technology themselves are not difficult to spot. Both inside and outside of financial services there seems to be new innovations hitting the market almost daily. And where there may have been a slow uptick, it appears that consumers are getting on the biometrics bandwagon. By the end of this year, it is estimated that nearly 770 million biometric authentication apps will be downloaded by consumers. Privacy does remain a concern for many consumers, but we may find that the convenience offered by eliminating lengthy passwords may win in the end.
If market forecasts are any indicator, consumers will catch up to technology in the marketplace. It is estimated that the global market for biometrics will experience a ~6% CAGR from $4.3 billion in 2017 to $7.9 billion by 2027. Fingerprint and facial recognition technologies are expected to account for the bulk (67.4%) of the marketplace value, followed by iris detection, signature recognition and other technologies.
Are you prepared?
Like other technologies before it, biometrics is becoming more of a ‘must have’ than a ‘nice to have.’ Given the effort and expense to build in biometrics and roll out it out to the masses, it is important to prioritize where to invest and truly understand the customer need that it meets. This may ultimately require exploring the customer journey, assessing pain points, and understanding where biometrics can play a role in eliminating friction.
And perhaps one day in the not so distance future we will all be ready to say goodbye to the password!
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