Biometric Transactions Set To Soar Over The Next 5 Years
Biometrics is a form of password-free authentication that, instead of relying on typing out a memorized word or phrase, uses unique personal characteristics to confirm identities, such as the face, the voice, or even a fingerprint such as a thumb. Biometrics have slowly integrated into financial transactions, and a new study indicates that this trend is set to grow explosively.
Biometric Banking
According to Juniper Research, financial transactions through biometric authentications are set to exceed one trillion dollars by 2027. When it comes to remote payments, especially through mobile devices, PIN numbers and passwords are still dominant; with biometrics slowly integrating into mobile devices like smartphones and tablets, the current transaction amount is estimated to be approximately $332 billion.
This means that if the Juniper Research estimates are correct, remote payments through the use of biometrics are expected to rise by about 365% within the next five years.
Growth By Necessity
There are several reasons that this growth in biometrics is occurring. The chief driver is convenience. Biometrics is fast and easy. It doesn’t require a person to memorize a long string of random alphanumeric characters just to have a “strong” password. That ease is being capitalized on by large technology companies, such as Apple, that incorporate biometrics into financial software such as Apple Pay, making it an easily accessible, easy-to-use payment alternative for Apple users.
The other factor is government intervention. The European Union, for example, has a “Second Payment Services Directive” (PSD2) that is putting a renewed emphasis on cybersecurity. Strong Customer Authentication, or SCA, is a part of this directive, and that also means multi-factor authentication that doesn’t rely solely on a password for access. Biometrics is an important component in meeting these standards.
Another factor contributing to the wider implementation of biometrics is FIDO, or the Fast Identity Online alliance. Formed in 2013, this alliance of industry experts is committed to reducing the reliance on passwords and promoting a standardized protocol.
FIDO recently got a shot in the arm with an official announcement from major tech companies Microsoft, Apple, and Google, all announcing broad support for FIDO standards, with an intention to make them more widespread in technology. That initiative is going into deployment as quickly as next year and will continue to become more widespread.
Biometrics is a fast, secure, and more convenient way to authenticate without using passwords. If you’re interested in using the FIDO protocol and moving to a passwordless authentication system, read here to learn more.
