The role of biometric authentication in financial technology applications

The explosion of fintech applications has been accompanied by a growing threat from sophisticated cyberattacks. Cybercriminals are constantly finding ways to bypass traditional security barriers, making common security solutions such as strong passwords and two-factor authentication all too vulnerable. Is biometric authentication the breakthrough solution to deal with the cyber war?

Why do fintech applications need biometric authentication?

Many people believe that e-wallets are a safer shield to protect assets than ever. In fact, nearly 60% of users believe that this payment method is more convenient and secure than cash. However, few people realize that our smartphones, our inseparable possession, can become the door to opening financial treasures for bad guys. Just a moment of carelessness, all our assets can fall into the hands of bad guys.

The 24/7 access feature of mobile banking, which is considered a great benefit, has inadvertently become a loophole for bad guys to take advantage of. They do not need to wait for the bank branch to open to act, but can hack into your account anytime, anywhere. In just a blink of an eye, the amount of money in the account can mysteriously "evaporate".

Passwords, while considered a shield to protect accounts, are actually just a thin wall of paper. A data breach or a large-scale cyber attack can easily break through this wall. In fact, with enough time and tools, sophisticated attackers can find a way to disable any security system, no matter how complex.

The number of mobile banking app users has increased rapidly in recent times. However, this rapid growth has come with increasing cybersecurity risks. Security loopholes and flawed processes are opening up opportunities for hackers. Therefore, finding more effective security solutions, such as biometric authentication, is urgent.

The role of biometric authentication in financial technology

Biometric data such as fingerprints, faces, irises or even voices of each person, all have a unique, one-of-a-kind mark. It is this uniqueness that makes biometric technology an extremely powerful security tool. In the financial sector, this technology is widely applied thanks to its ability to authenticate identities accurately and conveniently, meeting the increasing requirements of security and regulatory compliance.

1. Improve customer experience

In an age of convenience, consumers increasingly demand fast and seamless experiences. A mere second of delay can send them to another app. To meet this demand, fintech companies are forced to look for faster and more secure authentication solutions, eliminating barriers like multiple security questions or slow loading screens.

Biometric authentication has revolutionized the user experience. Instead of having to remember dozens of complex passwords, users can simply authenticate their identity with a light touch or a look. This convenience not only saves time but also eliminates the hassle of forgetting passwords.

2. User account security

In the digital world, your personal information is a valuable asset. Poor security can make you lose everything in the blink of an eye. Biometric authentication, with high security and resistance to cyber attacks, is the optimal solution to protect your assets. Your fingerprints and face are the most authentic proof of identity, which cannot be forged.

3. Help organizations comply with strict security regulations

Biometric authentication is not only a modern technology but also a strong shield of protection for both businesses and customers in the financial sector. In an increasingly regulated environment, customer data security is a top priority.

Biometric authentication also helps companies comply with strict security regulations, while minimizing the risk of administrative fines and reputational damage. As a result, businesses can focus resources on developing products and services that bring added value to customers.

4. Fraud prevention

The decentralization of financial technology processes has inadvertently created loopholes for fraudulent activities. Applications that automatically recognize users by voice or image are easily exploited. Identity verification based only on account name is too rudimentary, creating opportunities for fraudsters to easily infiltrate and perform illegal activities.

While personal information like names and passwords can be easily stolen and used to open fake accounts, biometric data like fingerprints, faces, and eye marks are a solid wall of protection. These biological features are unique and cannot be copied, making forgery nearly impossible. Even if a bad guy gets your password, he cannot bypass the biometric security layer.

Considerations before implementing biometric technology

Biometric authentication offers significant benefits, but its implementation also comes with significant challenges, particularly privacy concerns. Regulatory agencies such as the US Federal Trade Commission (FTC) have issued warnings about the collection and use of biometric data, requiring businesses to consider carefully before making a decision to adopt it.

The FTC has issued a stern warning about misleading claims related to biometric technology. Providing inaccurate information about how biometric data is collected and used is illegal and could result in legal action from regulators. Businesses should be extremely careful in communicating about this technology and ensure that all information is accurate and transparent.

In the digital age, biometric data has become an extremely valuable but also a very vulnerable asset. To protect this data, organizations need to apply a comprehensive set of security measures, including encrypting data using powerful algorithms, multi-factor authentication for added security, and continuous network monitoring to detect and prevent threats. Only then can we ensure that biometric data is kept safe and not exploited by bad actors.

In the past, a stolen audio or facial image may not have caused significant consequences. However, in the era of strong artificial intelligence development, this data has become a powerful weapon in the hands of criminals. By using deepfake technology, bad guys can create extremely realistic fake videos or sounds that easily bypass authentication systems, causing serious consequences.

Although biometric technology is expected to be a wall of security, reality shows that it still has many limitations. Even without the intervention of artificial intelligence, facial recognition systems can still be fooled by individuals with similar appearances. Even members of the same family can bypass this system. This proves that no system is perfect and businesses need to have multi-layered security solutions to ensure information security.

In short, no security system is perfect, and biometric authentication is no exception. However, when weighing the benefits and risks, biometric authentication is still a worthy option to consider. In addition to enhancing security, this technology also provides a seamless user experience and meets increasing regulatory compliance requirements. It is a comprehensive solution that businesses in the financial sector should consider to protect their mobile applications.