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What is the future of bank customer identity authentication?

Companies now offer numerous ways for their customers to pay, with a variety of omni-channel transaction methods, from online payments with cards, electronic wallets and e-payment systems such as PayPal, to payments through mobile devices and in-store traditional or contactless payments. Secure customer authentication methods are needed for each payment channel and currently these rely mainly on passwords and card readers or tokens. But biometric authentication is no longer a futuristic idea only seen in James Bond films – banks are increasingly adopting biometric and other alternative forms of authentication for their customers.

Banks offer video and fingerprint ID

This week Erste Bank announced it will be using video-based online identification, provided by ID and e-signature software company IDnow. IDnow Video-Ident allows the bank's customers to identify themselves through a video chat service, which can be used – together with a valid traditional ID document such as a passport or a driving licence – for opening accounts using a mobile device or computer. This type of technology has recently been approved by the Austrian Financial Market Authority (FMA).

Other banks are also introducing forms of biometric identification for customers. Saudi Arabian Al Rajhi Bank announced last week it is introducing self-service terminals in its branches that will use biometric fingerprint readers to authenticate and issue customer debit cards.

Authentication platform

And the company Transmit has developed an authentication platform that helps financial institutions to offer their customers a simplified authentication process with a choice of the latest biometric processes. Already being used by TD Bank, the platform gives banks access to up-to-date secure biometric technology without having to develop in-house software.

Challenge of providing secure ID

However, there are drawbacks to some biometric ID methods. For example, video identification doesn't work in the dark, and fingerprint recognition doesn't work for people who have worn down their fingerprints through manual work or scarring. And voice recognition can only work in a relatively quiet environment. Furthermore, the variety of authentication processes can seem confusing for customers and difficult to manage for the financial institution.

With the growing acceptance of online and mobile payment methods, biometric ID security will become increasingly prevalent and, with the high profile of cybersecurity concerns among customers, it will be both a challenge and a priority to provide highly secure but user-friendly authentication solutions.

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