Banking Industry Driving Biometrics Market, But Challenges Loom, Says ABI
The biometric market is shifting away from consumer electronics and toward banking technologies that appeal to millennials, but “significant challenges” loom, said an ABI report Wednesday. Startups and payment card players are integrating biometrics into mobile payment services, smart cards…
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and ATMs to improve banking security and authentication through innovative form factors, and the market shift is occurring faster than expected, said analyst Dimitrios Pavlakis. Global revenue for biometric banking technology is forecast to pass $4 billion by 2021, Pavlakis said. The need for better transaction security is driving the market, with North America alone having nearly $8 billion in payment card fraud, he said. Ease of transaction, increased security and better user experience are attracting customers to biometric banking, and millennials have been quick to adapt to the technology, said ABI. It cited Mastercard’s effort to integrate facial biometrics, allowing users to pay using selfies, and said banks worldwide are adopting fingerprint, voice and facial recognition for personal banking. Fujitsu and Hitachi developed a vein-recognition solution for ATMs, where vascular biometrics authenticate users by identifying the unique patterns in their veins. Atom Bank is testing a biometrics-based online-only banking approach, ABI said, and Diebold and EyeLock recently partnered on an iris-recognition ATM that leverages near-field communication and quick response code technology via users’ smartphones. But vendors adopting biometric banking applications face challenges with infrastructure upgrades, interoperability issues and data security, said ABI. “Security flaws are always a concern, and even more so when customers’ biometric data is involved,” said Pavlakis. To get widespread adoption, banks and service providers will have to convince clients that data is being stored and managed securely, he said.