A few years ago, when I started to delve deeper into topics such as cybersecurity and data protection And with digital risks, I questioned the major challenges the financial sector faces daily. As technology like artificial intelligence advances, so too do identity theft and fraud crimes. This topic has led me to understand that Biometric verification is a secure and reliable identification method that banks should implement to improve the account opening experience, increase transaction security, and enhance access to their services.
One of the most famous cases of Deepfake –The creation of fake identities through video and/or audio—featured former US President Barack Obama and actor Jordan Peele, who transformed his facial movements to match Obama’s features to discuss the dangers of misinformation. This manipulation, while seemingly unrelated, could affect the financial sector, as attackers use deepfakes to deceive their systems and put customer data at risk.
Strengthen biometric verification
The Financial Superintendency of Colombia states that 79% of transactions are carried out through non-face-to-face channels, and in Latin America, these transactions are estimated to increase by 20% by 2025. This means that the financial sector must strengthen its biometric identity verification processes to offer a seamless and reliable experience to its customers.
The Global Biometrics Market research It reports that the biometrics industry has experienced high growth in demand and the need for better security. Not only are governments around the world implementing biometric verification systems for travel, border controls, and Services to citizens , among others, but also the private sector. Technology has driven the financial industry to transform the way it operates.
My experience with colleagues in the financial sector and technology experts has shown me four clear benefits that a robust biometric verification system can bring:
- Transaction security: The Colombian Banking Association (Asobancaria) reported that in 2023 more than 40,000 people were victims of identity theft, and the situation in Latin America is even worse, with identity fraud increasing by 40% since 2022 and continuing to rise. This shows that in the region, banks are the most targeted organizations for identity theft. The need for biometric verification at different stages of customer interaction is clear.
- Regulatory compliance: having advanced identity verification systems also facilitates compliance with specific regulations for the financial sector such as “Know Your Customer ”(for its acronym in English). Real Wire statistics show that financial institutions can save up to $12 million each year by improving their KYC systems. Furthermore, accurate identity verification prevents gaps between customer information and credit risks, and databases of government data open to the financial system .
- Improved customer experienceWith effective biometric verification, designed to convert users into customers, processes are simplified. However, some experiences only generate delays and increase customer distrust. If the goal is to reduce onboarding times and streamline processes, verification must encompass the widest range of national documents worldwide, and facial recognition must be completed in seconds to grant access to services or experiences.
- Customization of services: Accurate and rapid identity verification allows financial institutions to create detailed customer profiles and analyze their behavioral patterns. This enables banks to personalize their product offerings, tailoring them to each customer and, consequently, increasing customer loyalty.
Steps for a successful implementation
Integrating these types of solutions into financial services brings challenges that must be considered, such as protecting people’s data and identity, agile integration, and compatibility with multiple mobile, web, and hybrid platforms .
The best way to ensure the success of a biometric verification system is to develop it gradually and following a few steps:
a) Digital identity:
- Ensuring that a person is who they claim to be, through authentication (onboarding and KYC). The technology used is facial biometrics and the information it extracts from documents.
- Validation. With the previously captured biometric and biographical data, you can validate that person in any system and allow them to interact and make transactions.
- Finally, an electronic document (optional) can be created so that the user has a method of authentication and digital identification within the application.
b) Abolish cumbersome forms and use technology such as OCR and NFC to extract data and automate processes.
c) To legally bind the citizen to the procedures they carry out using technology.
Ensuring data protection in financial transactions is no longer an option; rather, it is a process that the financial sector must strengthen to create more reliable and secure connections in a constantly evolving world .