Harnessing the potential of banking sector through facial recognition technology
Harnessing the potential of banking sector through facial recognition technology
As the world moves online, banking is keeping pace with the changing technology through its own trail of transformation. This transformation has been especially prominent in the last decade, with rapid digitisation and increased focus on agility in processes. As a by-product of the changing landscape of banking, concerns related to information security, adoption and trust loom. Online fraud, for instance, is increasing as a result of a shift towards online banking. Not to mention the hassles of remembering numerous passwords, stacking physical cards, and long waiting hours in the physical bank branches.
Factors that hinder the user’s ease and sense of trust is a challenge to customer success in banking. The essence of banking services is providing aid in financial management, frictionless access and security. With higher trust in the banking system, customers tend to invest time and resources in bank services for wealth growth. So, banks are increasingly emphasising the use of technology that can help reduce frauds, facilitate customer convenience, mitigate losses, keep the sensitive information safely stored, and contribute to the evolution of banking processes.
Facial recognition technology in banking
Facial recognition biometrics is the AI-powered technology that enables identification of a person by accessing their facial features. Biometrics have been a part of the banking processes for a long time. Facial biometrics offer promising possibilities of a momentous revolution in the banking sector. It has applications in diverse banking processes to elevate transaction security, process lifecycle, and customer success. Some of its key features are:
• Easy to implement and use
• Highly accurate
• Prompt identification
• Contactless
• Utility across processes
According to a study by PYMNTS, 52% of the customers view biometrics as more secure for authenticating transactions as compared to other methods of authentication. However, the immense potential unlocked through facial biometrics, is yet confined to limited exploration.
Facial recognition system embarking upon the key challenges in banking
Physical security
Digitisation is gradually and rapidly taking over the banking processes. While mobile banking enables remote account access and real-time transactions, it inevitably adds to the hassles of the customers in terms of maintaining passwords and account authentication. According to research by NordPass, a person has to remember 70-80 passwords on an average. Not to mention that physical ATM cards, passbooks and documents can be easily lost or stolen. In case any customer loses vital information, the re-authentication can be arduous. So, the inconveniences persist in the form of long waiting hours in queues, delays in issue redressal, and lack of personalised services. Such difficulties weaken the customers’ trust on the bank’s services, making customer retention a challenge.
Juniper predicts that by 2028, the value of transactions executed by digital wallet will reach USD 16tn. Evidently, mobile and neo banking are picking up momentum to become the new normal. But the adoption of digital banking comes with the pertinent challenge of online frauds. Due to its nature, digital banking is highly vulnerable to losses through frauds, identity thefts, embezzlement, spoofing and phishing attacks. Customer verification is another key part of the online banking regime to make sure of legitimacy during the on-boarding process. Without constructive protocols and solutions in place, the risks of synthetic identity frauds soar.
Transformation for banks through FRS
The biometric banking market is expected to value at USD 23.6 Billions by 2032. This indicates the Compound Annual Growth Rate (CAGR) of 17.2% between 2023 and 2032. Technology is as good as its usefulness to the users. According to the experts in Deloitte Center for Financial Services, frauds pertaining to synthetic identity are expected to cause losses up to USD 23bn by 2030. Facial recognition with liveness detection is a game changing security technology. High reliability allows more monetary transactions, encouraging banks to expand their business & provide more tailored services to increase banking inclusion. It reinforces security in virtual services, in branch transactions and augments trust through enhanced holistic experience.
“Facial Recognition is a breakthrough technology for banks. Not only does it make fraud detection and mitigation fast and effective, but it can do wonders to accelerate financial inclusion while providing a more secure and seamless customer experience.” – Valerie Lapteva, Business Development Director, APAC region, RecFaces.
“Facial biometrics is an inseparable module of the Zero-trust security model. It can strongly reinforce the banking ecosystem with a hard-to-compromise technology at every point in the physical and digital security channels.” – Sukrit Varma, Global Marketing Partner, APAC and MENA regions, RecFaces.
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Source: ASMAG
