As banking services expand to mobile, fraudsters continuously develop new fraud schemes by blending old tactics with new technologies. Authentication remains to be the biggest hurdle for banks when it comes to mobile banking. Banks increasingly turn to biometric solutions to resolve the tension between fraud prevention measures and customer experience. However, the limitations of both static and dynamic biometrics for detecting and preventing fraud make behavioral biometrics a better option for mobile banking applications. Here is why.
Challenges Facing Mobile Banking
According to Raddon, 41% of the overall US population and an overwhelming 69% of millennials utilize mobile banking. However, 43% of users do not lock their devices with passcodes. And if passwords are required, Keeper Security claims 87% of individuals aged 18-30 reuse their passwords. So if the password is the thing of the past, what’s next?
Biometric authentication is all the rage nowadays and makes it possible to confirm identity through uniquely detectable biological traits. Static biometric authentication solutions, such as Apple Face ID or fingerprint scanners have become a new standard for any mobile device. Indeed, according to Mastercard, 93% of consumers prefer biometrics to passwords. However, static biometrics, do not only break the flow of interfacing with the device, but also fail to protect mobile banking apps from fraud. In fact, static biometric data can be stolen just as easily as password information.
The other challenge with static biometric solutions is that securing the application at login is no longer sufficient. Fraudsters can easily take over the session once the user has logged-in with valid credentials. Therefore, continuous authentication methods that secure applications throughout the length of entire session are required to truly protect mobile banking applications from fraud.
Behavioral Biometrics Create Positive User Experience
Behavioral biometrics leverage the data continuously captured by standard smartphone sensors to analyze unique behavioral traits such as swiping (or typing) speed and patterns, finger pressure, finger size, and the angle at which someone holds a device. Hundreds of parameters all come together to create a unique user profile that, unlike a single static biometric trait such as a fingerprint, is nearly impossible to mimic. In addition, behavioral biometrics’ unique ability to differentiate between human and non-human behavior without the need to introduce challenges such as captcha, significantly improves banks’ ability to fight automated fraud and bot attacks.
Banks must ensure consumer security to prevent fraud. But faced with increased competition from innovative FinTech companies and other banks that embrace mobile banking, they must also ensure a fluid and enjoyable customer experience. In today’s competitive environment, the main challenge for mobile banking is finding strong authentication methods that do not interfere with user experience.
Since behavioral biometrics continuously runs in the background, without requiring any additional actions by the user, consumers are authenticated through the normal use of the device. This means consumers never have to pause the transaction to enter their login details, wait for an SMS code, or remember a complicated password.
By making the banking experience easy and enjoyable to the consumer, banks can reap the benefits of digital innovation and increase their profits.
Increasing Productivity with Mobile Banking
JPMorgan stated it costs 96% less to deposit a check digitally than in-person at a branch. By making more services available through mobile banking, banks can lower their costs by eliminating the need for such services in physical branches. Behavioral biometrics makes possible migration of the majority of banks’ services to customers’ mobile devices.
Risk-based authentication with behavioral biometrics means that customers can complete riskier transactions on mobile without having to go in-branch or speak to a customer service. Increasing the transaction volume in the mobile channel is an attractive business objectives for banks, as it is cost effective and quick.
By providing a strong mobile authentication method, behavioral biometrics makes it possible to provide even such services through mobile banking applications. Migration to mobile banking is decreasing the costs by eliminating the need for customer service reps and improving the profits by making more kinds of transactions available to consumers at all times at their convenience.
Increasing Transaction Acceptance Rate
False positives as well as overprotective anti-fraud measures can seriously limit the business opportunities for banks by causing consumer frustration, inconvenience and irritation.
When users deviate from traditional spending habits, as for example when travelling or spending more than usual, legitimate transactions are often mistakenly marked as fraudulent. Being wrongly flagged as fraud causes customers to abandon transactions or sometimes even move to another account altogether.
At the same time, overzealous fraud protection measures can also cause transaction abandonment transactions, if for example the authentication sms was delayed or if the user simply forgot their password.
Behavioral biometrics can significantly improve transaction acceptance rates and reduce false positive rates by reliably identifying the user behind each transaction without interfering with the user experience.
The Way of the Future
Just a couple decades ago, biometric authentication seemed like science fiction. Today, it is the present state of affairs. Institutions that resist the trend may be left behind as consumers choose the convenience and high level of security offered by BB.
Speaking about behavioral biometrics, Brooke Satti Charles, a strategist with IBM Security, stated “these capabilities help to maximize detection [of fraud], reduce false positives and optimize strong authentication”.
The intersection of these benefits adds up to a strong business case for the use of behavioral biometrics in mobile banking. A frictionless and safe customer experience, coupled with strong and continuous authentication, is just what can give banks a competitive edge in the era of mobile banking.