Aviva
July 2, 2020updated 28 Jan 2022 11:09am

How biometrics are changing the way we use fintech

Your smartphone is capable of much more than simply chatting with your loved ones or posting selfies on social media. From checking train timetables to ordering a takeaway, the device in your pocket can make your daily life easier.

By Paul Heybourne

When Apple first introduced Touch ID to its Phone 5s in 2013, every industry scurried to use this new technology and again in 2017 once Face ID was added to the iPhone X.

While Apple certainly didn’t invent biometric authentication, it was the first company to feature it in a smartphone, and it transformed the way we use our devices.

Now you can unlock your phone with your face, log in to bank accounts with your thumb and even get a life insurance quote with a selfie. But are biometrics changing the way we access our finances?

The Starling effect

When Starling first opened its virtual doors back in 2014, CEO Anne Boden set out to create a bank that used technology to revolutionise the old-fashioned financial industry.

This included using biometric technology so that you no longer need an old utility bill, a trip to your local high street and a couple of hours to open a bank account. Now all it takes is a photo of your ID, a short video selfie and a couple of minutes to verify your identity at some of the UK’s most popular mobile-only bank accounts.

This advanced identity verification goes beyond just using an image. By combining video and facial scanning technologies, it physically maps the geometry and biometrics of a person’s face, while also determining attentiveness or ‘liveness’.

Biometric verification has proven to be a more secure way of processing and onboarding new customers across the financial industry. Not only can it catch more fraud than traditional methods, but it’s also more convenient for customers to do everything remotely.

Getting insurance in a snap

This technology isn’t limited to signing customers up – there are plenty of financial firms developing ways to use biometrics across all their products.

Aviva was the first insurance company in the UK to use this biometric technology, allowing its MyAviva account customers to unlock access to any savings, pensions and investment products that require a stronger level of data protection.

Other insurers offer life insurance quotes from a selfie by using AI and biometric technology to analyse the image to calculate age, gender and BMI. This means there’s no need for long questionnaires and creates a quick way for customers to engage with a typically low engagement product.

South African insurance firm Pineapple offers cover for individual items by using AI to generate a description of the object you capture with your camera. You can then put in its estimated value. While it isn’t flawless, it makes insuring your belongings a little more fun and possibly faster.

Several tech companies now offer vehicle damage repair estimates from a photo, using AI to analyse the damage and predict the repair costs – potentially removing the need for an engineer inspection.

Empowering vulnerable customers

AI technology has already transformed the lives of many vulnerable people by giving them better tools to control and access information.

While financial firms must protect personal information by using a variety of security methods, this often comes at the detriment of customers with physical or mental disabilities.

For example, a person with mobility problems may struggle to access their local banking branch to sign forms or hand in identification. Biometric logins such as fingerprint, face or iris recognition can also help people with dyslexia who may struggle remembering passwords.

Increasing accessibility makes all our lives easier, but it can also be a make-or-break situation for vulnerable people. By digitising verification methods, it allows many people to increase their financial independence as they can interact with their bank comfortably.

Attitudes are changing

A study from payment provider Worldpay found that most of those surveyed (53%) don’t like biometric authentication, with 60% saying, ‘it doesn’t feel right’.

On the other hand, 42% of people said they’d feel comfortable making a payment using a fingerprint scan. And attitudes are changing, with Gen Z-ers (born between 1995 and the early 2000s) being the biggest fans of using biometrics.

Although no one can guarantee any security system, biometric authentication is generally much more secure. This is because traditional passwords and PINs are prone to human error. People write them down, use the same ones for multiple accounts and they’re just technically easier to hack.

Banking giant NatWest took a clear stance when it unveiled the world’s first biometric fingerprint credit card  in October 2019. The card uses existing contactless terminals and customers must place their fingerprint on a small square to authenticate payments up to £100.

Director of Innovation at NatWest, Georgina Bulkeley, said, “This is the biggest development in card technology in recent years and not having to enter a PIN not only increases security but makes it easier for our customers when paying for goods or services.”

The bottom line

Biometric authentication is unlikely to fail like other futuristic fads such as 3D TVs or Google Glass. It’s integrated on most smartphones and the financial industry is lapping it up.

The next step is increasing consumer trust, which may be harder to do than previous shifts in security technology. The introduction of PINs and passwords was one thing, but banks and insurance firms are asking for personal information that many aren’t prepared to give up yet.

However, there’s no denying that biometric technology is revolutionising the way we use our money and, for many, it’s a change that’s been a long time coming.

Topics in this article: