Financial technology or “fintech” has been the unsung hero in simplifying banking transactions even prior to the COVID-19 pandemic. Financial institutions have been able to leverage technology to improve and simplify the user experience. With fintech, users are able to transfer money digitally to other users, deposit checks with a snap of picture and perform cashless transactions. Even if you have not realized it, fintech is likely a huge part of both your personal and professional day-to-day life.
The pandemic-driven lockdowns, social distancing and remote work have aided in the fintech revolution by accelerating the adoption of digital solutions. A recent McKinsey study shows that there has been an estimated 5% reduction in global cash transactions, which is 5 times the yearly estimated decrease in cash usage. With the continued rise of fintech, many are left wondering about the security challenges that could affect the lives of many.
Security issues facing fintech
Fintech is the second most frequently attacked industry by cybercriminals after healthcare. Hackers and cybercriminals have been able to carry out increasingly sophisticated cyberattacks to gain access to confidential data. They are constantly looking for human error and the use of outdated and vulnerable technology to find loopholes and carry out attacks. Given the high-value and sensitive information contained in the financial services market, the security of fintech is crucial. The key challenges affecting fintech today are:
- Secure identity: secure identity is the way businesses verify digital identification accurately. Without a way to provide accurate identity proofing, service providers are at risk for unauthorized access and potential fraud. This is a major concern for both customer and enterprise.
- Data security: data security is a top concern for financial service provides since they have access to high volumes of personal identifiable information such as full names, phone numbers, email addresses, birth dates, home addresses, and tax ID information.
- Third-party vulnerability: integration of third-party components like payment gateways, payment solution providers, aggregators and more, need reliable and constant monitoring.
Solve rising security challenges with stronger authentication
Many IT leaders are turning to biometrics to lessen increasing data concerns. Like fintech, biometric adoption has accelerated since the onset of the pandemic. Biometric technology uses unique physical characteristics such as face, fingerprint, voice, or iris to provide accurate identification. Since these attributes are unique to each human, biometrics provide the strongest authentication method. Additionally, today’s mobile devices have biometric compatibility through the option to bypass passwords and pins with facial and/or fingerprint recognition.
Biometric technology can be incorporated into fintech offerings to provide many benefits for both the provider and the end-user. Among those benefits, biometrics can solve the challenges facing the fintech industry. Through rapid and reliable identification of the client at different steps of the financial transaction, biometrics can increase security. And, with mobile biometric offerings, integrating into current fintech software can be seamless.
Implement biometric technology today to reduce fintech security challenges tomorrow
The world has rapidly accelerated its use of digital solutions since the onset of the COVID-19 pandemic. Businesses and consumers are becoming heavily dependent on mobile devices in order to access some of their most vital information. However, the convenience of digital solutions has also caused an increase in security challenges. These challenges call for stronger authentication and identity proofing. Biometric technology use has been on the rise for several years, with the latest version of mobile devices having access to both facial and fingerprint recognition. Biometrics have been used to provide touchless solutions, bypass passwords, and are currently the gold standard for identification and authentication. Implementation of biometrics in fintech solutions can solve the security challenges facing the industry today.
For fintech companies looking to provide secure authentication for their consumers, the Knomi® mobile biometric framework from Aware is a robust option. The framework uses mobile devices to provide secure and convenient facial and speaker recognition for mobile, multifactor authentication.