These are the findings of a survey published today by Mobey Forum, exploring the current attitudes to biometrics within the banking industry, the key use cases, industry drivers and obstacles standing in the way of progress.

Of the 235 respondents from across the world, it is clear that biometric services are a priority. 22% of banks already offer biometrics to their customers and 65% are planning to offer services in the near future. More than half plan to launch fingerprint biometrics for their end users, with an additional 21% focusing on voice recognition.

Do you offer biometric
authentication for mobile
financial services

Authenticating the user during the login process and during payment or transaction confirmation was cited by 70% as the most important use case for biometrics in financial services.

A number of key drivers for the use of biometrics are explored in the study, with nearly half of respondents stating that it is the convenience for their customers, together with the desire to be viewed as an innovative and advanced bank, which makes biometrics appealing. There are, however, a number of obstacles that need to be overcome. One in five highlighted dependence on technology providers as an issue. In addition, the customer concerns relating to privacy are seen as a barrier.

What kind of technology are you planning to use?

“Biometrics in financial services still face challenges,” comments Sirpa Nordlund, Executive Director of Mobey Forum. “It is clear, however, that progress is being made and there are well defined use cases and benefits to moving forward. We believe that inter-bank collaboration will expedite the development of this technology and 42% of the market agrees with us. Successful financial solutions need to be easy and convenient; a collaborative approach will ensure consumers are presented with stable and consistent services, driving adoption.

“We will continue our discussions around biometrics both within our own working group and in our collaborative discussions with the Natural Security Alliance and the Biometrics Institute. We look forward to releasing further analysis in the coming months.”

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Cyber-crime within the financial services industry has reached unprecedented *levels and

Top 8 future cyber security threats to the financial services sector

currently costs the global economy £266 billion each year. As companies increasingly adapt to emerging technologies, such as digital wallet service Apple Pay and Near Field Communication (NFC), the likelihood of hacks and data security breaches is rising.

Neil Cross, Managing Director of Advanced 365, explains, “The financial services industry must find a balance between embracing innovation to establish a competitive advantage whilst meeting needs for greater compliance and cyber security in order to survive. At present, too many firms are preparing for yesterday’s threat instead of updating their strategies to defend against tomorrow’s.”

Cross outlines below the top eight technology threats that financial services firms will face in the future.

1. Botnet attacks – The Botnet (robots and networks) of Things is a group of computers or internet-connected devices that have been hacked to commit fraud or attack servers. Industry experts estimate that botnet attacks have contributed to the loss of millions of pounds from financial institutions. Mass adoption of the Internet of Things will only exacerbate security challenges as it introduces billions of potential new bots.
2. Self-mutating computer virus – ‘Pandoras’ are regarded as the next generation of self-mutating computer virus attacks. They are designed to destabilise, confuse and destroy critical electronic infrastructures essential to the financial services industry. From a strategic perspective, they can be used as both offensive and defensive security mechanism.
3. Near Field Communication (NFC) – NFC allows two devices within a short distance of each other to exchange data. It is increasingly being adopted by banks to introduce new products and facilitate mobile payments. Customers are susceptible to aggressive avatar-based attacks which rely on advanced digital creation assembled from stolen aspects of an individual’s identity.
4. Payments technology – Mass market adoption of new mobile payments technologies, such as Apple Pay and Google Wallet, is expected to occur by the end of 2016. Hackers are intensifying their efforts as companies and consumers increasingly adopt these new systems and related fraud cases in the United States are already totalling millions of dollars.
5. Biohacking – Biohacking applies to advanced techniques that use science and technology to affect human performance and could be a target for radical security breaches. Smart implants will be used for identification and authentication of individuals which include the ability to access buildings and activate mobile phones, in addition to making bank transactions to replace smartphone PIN codes.
6. Big data and the cloud – In ten years’ time, most of the world’s data will move through or be stored in the cloud at some stage. This is expected to result in more sophisticated data security attacks targeting cloud infrastructures, shifting from device-based to cloud-based botnets, hijacking distributed processing power.
7. Mobile – 80% of internet connections could originate from a mobile platform by 2025. Industry experts predict that mobile devices will no longer be used to crack a phone code or steal data from a device itself. Instead they will be targeted by cyber criminals as a catalyst for obtaining additional data resources that can be accessed via the cloud.
8. Bring Your Own Device (BYOD) – Heavily regulated industries are struggling with the risks introduced by allowing employees to bring their own devices. A 2014 survey of financial services respondents by PwC revealed that 44% said employees represented the highest and most likely source of security incidents. This figure is 9% higher compared with the all industries’ average.

Cross adds, “Financial services providers must adapt to the new world and the demands it places on their organisation. Businesses that fail to demonstrate a greater awareness of emerging technological challenges and transform their notion of security could fall prey to damaging breaches.”

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According to Telstra’s “Mobile Identity – The Fusion of Financial Services, Mobile and Identity” report, with smartphones now the primary channel used by Gen X and Gen Y to access and manage their finances, expectations around how financial institutions manage mobile identity are being transformed.

Willingness to Share Personal Information with Financial Services Institution

“For the last six months, we’ve spoken to consumers and banks all over the world, in an effort to understand how our relationship with our smartphone is affecting our relationship with our financial institutions,” said Rocky Scopelliti, Global Industry Executive for Banking, Finance & Insurance, Telstra.

“What we uncovered is that when it comes to mobile banking applications, consumers no longer believe in just the safety of passwords and usernames.

“Instead, two-thirds of UK consumers think that using biometrics – such as voice, fingerprint, iris and facial recognition – would be more secure and help reduce the risks of fraud.

Willingness to Share Personal Information with Financial Services Institution (by Net Worth $ (Total Investments & Assets – Debt))

“In fact, one in four UK consumers would even consider sharing their DNA with their financial institution, if it meant it would make authentication easier and their financial and personal information more secure,” he said.

According to the research, while factors such as interest rates and ease of accessing funds used to be the most important considerations when selecting a financial institution, today, more than half of UK consumers cite the security of their finances and personal information their top priority, together with their institutions’ reputation for security.

Despite this, the report found that only a third of UK consumers were ‘very satisfied’ with their institutions’ authentication methods, with one third willing to pay an extra £11 GBP per annum for more sophisticated mobile security measures.

Identity Theft (Global)

“Our research shows consumers are using their mobile banking applications in some really cutting edge ways, so they’re expecting much more than ever before from their financial services providers in terms of security, innovation and functionality.

“In fact, Gen X and Gen Y has become so dependent on their smartphones to access their financial services, that it’s led to a behavioral state we are calling ‘no-finapp-phobia’ – the fear of being without financial applications,” he said.

In the UK, Nationwide and NatWest customers are the most satisfied with the identity and authentication methods offered and are accordingly, the most likely to recommend them.

“With our consumption of financial services intrinsically linked with the mobile device, our mobile identity is the key to unlock trust with our service provider.

“For ‘no-finapp-phobic’ Gen X and Gen Y consumers it’s time to create mobile identity solutions that instantly recognise them for who they are,” Mr Scopelliti concluded.

For more information on Telstra’s Mobile Identity – The Fusion of Financial Services, Mobile and Identity whitepaper click here.

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According to the research, the increase in the mobile biometrics market represents a CAGR of nearly 67% with

Global mobile biometric market

total forecast period revenues exceeding $117 billion.

The report segments the mobile biometrics market into three major sectors, including biometric sensors embedded in smart mobile devices; biometric apps offered by biometric vendors, mobile service providers and online identity providers downloaded to smart devices; and biometric authentication for payment and non-payment transactions provided via secure cloud-based services linked to smart device.

Acuity projects that by 2020, biometrics will be a standard feature on 100% of the nearly 3 billion consumer smart mobile devices sold each year. With an installed base of 4.8 billion, more than 89% of all smart devices in use will be biometrically enabled.

Meanwhile, more than 5.5 billion biometric apps will be downloaded annually, and more than 800 billion transactions that require some level of biometric authentication will be processed on mobile devices each year.

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