We, as consumers, are the population of a digital data economy. At the beginning of the decade, most data was being produced by large corporations; now consumers and their own devices are generating more and more data automatically.
A combination of innovative technology and consumer demand now means a consumer expects an online transaction to be completed far quicker, leaving organisations with a much smaller window to perform the necessary fraud checks. If their methods are lax, the risks are significant. If too strict, revenues may be lost due to customer frustration. As such balancing customer experience with organisational requirements continues to be a key theme in all aspects of an organisations’ digital transformation and should be something that is included when planning a digital fraud strategy.
With more information being stored electronically this in itself creates more opportunities for a fraudster to target information that can then be used to commit a wide spectrum of fraud. Adopters of new techniques, such as biometric identification can reap the rewards through a significant positive impact on genuine customers. Fewer genuine individuals are going to be disrupted by more precise solutions.
We’ve all heard the saying, fight fire, with fire. Well in this case it’s true, to fight digital fraud you also need digital defences. Merriam-Webster defines biometrics as “the measurement and analysis of unique physical or behavioural characteristics […] especially as a means of verifying personal identity”. As fraud increases and fraudsters adapt to new technologies, so must the way an individual’s identity is validated and verified. Biometrics was identified as the biggest priority for organisations as they look to prevent fraud, within our Fraud and Risk Report, with 53% of those surveyed planning on significant investment into these technologies within the next three years.
There are an array of new biometric technologies that are being tried and tested within the industry to validate and verify identities, however sometimes advancements in technologies themselves create their own challenges; as outlined in the Mail Online’s article. Some of these approaches could be seen as intrusive, and indeed there are less overt ways of identifying risk, but they no doubt evidence that biometrics would need to form part of a multi-layered approach to prevent and detect fraud. There is no one silver bullet.
Last year, we asked consumers what they thought of some of these new technologies. Our Fraud & Risk Report revealed that 74% of consumers surveyed would be comfortable with their bank identifying them using fingerprint technology; 65% would be comfortable with their bank using facial recognition; and 57% would be comfortable with their bank using pulse detection technology. Based on these findings, it would appear that consumers are ready to embrace biometrics within their interactions with financial institutions.
On the other side of those interactions, there is a growing appetite for businesses to enable their customers to complete document verification online, streamlining the digital customer experience and reducing the requirement for the consumer to complete verification offline or in branch, which might never be followed through.
Near Field Communication (NFC) technology within smartphones, which enables things like Android Pay, is able to read the biometric chip in passports therefore performing analysis of the data within the biometric chip and the data on the main passport page which should always sync up unless they have been tampered with. Solutions can go even further than this and allow the end user to upload an image captured within a live image video which looks for eye movement, analyses how the light reflects off the individual ensuring the image is of a 3D nature and not 2D. This will allow for a digital triangulation and cross-comparison of multiple images to support identity verification – something that 10 years ago consumers would probably only encounter within an airport terminal, and can now perform on their smartphones at their convenience.
These technological advancements have required regulation to keep apace. GDPR extends the scope of sensitive data to include genetic and biometric data. Terms such as “data breach” are board level concerns and front-page news with hefty financial penalties. According to the latest Cyber Security Breaches Survey 2016, published by HM Government, two-thirds (65%) of large firms in the UK detected a cybersecurity breach or attack within the past year. There are more opportunities for criminals to impersonate identities as services are originated and delivered online (therefore increasing the value in fraudsters developing a fake or impersonated identity). And if fraudsters are successful in that, the world is at their fingertips – or quite possible yours, at their own!
I’m sure the adoption of biometrics will increase as we further immerse ourselves into the digital world, and I look forward to seeing how this innovation can stimulate competition within both service provision and technology deployment.