As cyber crimes soar, will banks turn to biometrics to boost clients’ security?

Biometric systems will provide banks with a larger data trail about customer touchpoints and enable them to ensure better resource utilization as well as cater to customers more effectively.

The question that holds significance is whether a biometric model can prove to be effective in the current scenario?

By Salil Prabhakar

India can be a model state for an array of case studies. Over a period of time, the nation has not only driven a large chunk of its unbanked population into the mainstream economy, it has also spearheaded formidable economic reforms such as demonetisation and absorbed its effects successfully, that too, in the wake of a global economic slowdown. Soon enough, a new tax regime has been embraced by the country which will further strengthen the economy, improve its efficacy, and decrease tax leakages. India is undoubtedly on the verge of transformation, and at the epicentre of this transformation rests comfortably its biggest beneficiary – the Indian banking system.

The Indian banking system, which has lately been enhanced through a series of sector-specific reforms, has been growing by leaps and bounds. Today, nearly all Indian households have at least one bank account as the banking penetration is still gradually increasing. But for a country of more than 1.3 billion population, even a marginal scope of error in terms of security can pose as a significant threat. Safety measures, inevitably, are the key to success, more so for the Indian banking entities. So, it is not about whether or not the banks are going to turn to the biometric system to augment their security. That’s merely a matter of time. The question that holds significance, however, is whether a biometric model can prove to be effective in the current scenario? And moreover, how is it going to shape up in the current scenario?

Biometric system-driven banks

As we observe the banks make their foray into the remotest of areas, incidents such as bank robberies and thefts have also simultaneously burgeoned. In the last three years, these incidences have amounted to losses of Rs 180 crore to the Indian banking system in more than 2,632 incidents of robbery, theft, burglary, and dacoity. Robust security measures, therefore, become vital in such a scenario.

One of the biggest benefits of the biometric system comes in terms of information protection of its users. Bank computers ideally contain massive amounts of customer-relevant sensitive information. If an unauthorised person gains access to this information, it can significantly compromise the security of banks as well as its customers. This is making multiple banks deploy a centralised biometric fingerprint reader system which serves as the initial security layer for authentication.

Mobile banking, data trail, and beyond:

Another area that needs to be specifically targeted is mobile banking. User credentials such as login name and passwords are one of the softest targets for cybercriminals. Recently, it was discovered that the mobile apps of 7 Indian banks were compromised. These applications were laced with malwares that took hold of the user credentials for monetary transactions.

Banks can take advantage of state-of-the-art technologies to minimize the risk exposure of their customers. With the username coupled with a PIN or password being the bare minimum for monetary transactions, they can further enhance the security of their mobile applications with mobile-based fingerprint as well as iris scanning technology. These features can also act as a fail-safe for the customer and banks in an event of compromise.

Mobile-based biometrics is, moreover, proving to be an effective solution for online electronic signature verification. It can be used electronically to send data over the internet as well as for making infallible electronic payments. However, the scope of biometric technology’s deployment goes beyond the abovementioned scenarios. It also finds a greater use at bank ATMs, which have the highest susceptibility for bank frauds. Iris and fingerprint scanner-enabled ATM machines can authenticate the legitimacy of the user and ensure that any account bearer is subjected to zero theft even in an event of losing vital information. Biometric systems will, moreover, provide banks with a larger data trail about customer touchpoints and enable them to ensure better resource utilization as well as cater to customers more effectively.

Financial technology, today, is growing at an unprecedented pace. But while on one hand this technological intervention is facilitating smoother and more seamless payments for the end-user, on the other hand, it is also giving rise to several new challenges pertaining to data security. Employing biometric-based solutions can help in addressing these concerns and can help in paving the way for a more empowered, digitally-led India of the future.

(The author is CEO of Delta ID, a leader in consumer-grade iris technology for mobile devices)

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