We sat down with our CEO Andy Finch, CEO of ITBiometric and a seasoned multinational tech startup veteran to learn, “What problems does banking face without biometrics?”
The Problem Banks Are Trying To Solve
“They’re faced with an increase in regulatory oversight as it relates to fraud, identity theft, high dollar transactions of any kind; especially in the United States, they’ve been changing a lot of the policies,” Andy explains.
“A simple example is in the U.S., up until June of 2019, anyone could walk into a bank and deposit money into someone else’s account. All they needed to have was the account number, and they could deposit that money. You can’t do that in any bank in the U.S anymore. That’s an AML (Anti Money Laundering) measure.”
The average customer banking experience has shifted tremendously in banking, especially with 2020’s pandemic. Many people have taken their banking digital and conduct very few transactions in actual cash anymore.
“KYC (Know Your Customer) is the other big deal in digital banking,” Andy continues. “There’s cross border transfer limits that are now in place that were much higher in years past. You have daily limits, you have weekly limits, you have monthly limits on what can be exchanged in and out of accounts.”
Andy recalls a business trip to Spain with his partner Tony, pre-COVID. “We were in Barcelona and we were about to make a presentation at a conference. We were standing in the wings when his bank called to confirm a wire transfer to Europe. He had to answer it in the moment or his ID verification would be denied and he’d have to reinitiate the wire. I went on stage, I started our presentation, just winging it, while he answered ten different questions all of which he had to answer perfectly. Most of those questions were just to verify his identity and that he was indeed Tony. Finally, once he’d gotten through their interview he was able to join me on stage, but what a lengthy hassle for anyone busy. At minimum it’s an inconvenience.”
Medallion services for investment portfolios is another high-end offering banks are always trying to de-risk. Authentication for access to large and long-term accounts often requires a series of interview questions which can be replaced by a BCD, Biometric Credentialing Device.
Biometrics Save Time and are More Reliable
For instance, let’s go back to Barcelona for a moment and imagine what it could have looked like for Tony and Andy, heading onstage at a conference to make a presentation, IF Tony had their BCD to initiate and verify the transaction.
It’s actually sort of a simple picture to paint. Two men walk out on stage. The wire transfer was verified hours ago when Tony submitted it.
“See, when Tony actually puts in the request to transfer the money, instead of the bank, having to call him up to verify at the time that he put the request in, he could authenticate his identity using his fingerprint or fingerprints, a sequence of prints, have the device actually send the signal through his computer or the internet to the bank that says, ‘this request has been made, but it has also been verified that it was Tony that made the request.’”
Right now the bank’s only option is to call him up and confirm that it’s him.
“They would already know that it’s him through enhanced biometrics and they wouldn’t have to go through their list of 10 questions to know that that was a valid number and that it was a valid request.”
So, What’s Holding Banks Back?
“Being risk averse and heavily regulated, no one wants to be first on anything,” Andy explains. ApplePay has led several savvy banks to include it in their own apps but the list is short to date.
Any new technology that is adopted by the banking industry will need to mesh with legacy banking platforms, all of which are already integrated. In addition, there will need to be a slew of testing to ensure that biometrics do add a streamlined and more secure user experience, all of which heighten the barrier to entry.
If you haven’t seen Chris Rock’s performance in FX’s recent 4th season outing of FARGO, it’s an example of the education and evolution process large institutions go through before rolling out new products, in this case the true story of the credit card.
“Most large financial institutions are doing everything they can to keep up with their current model, their market, and the changing regulations,“ Andy continues. “Designing outside of that isn’t something they’re used to doing.”
Breaking the Barriers and Creating a Better Banking Experience With Biometrics
“By using the biometrics, the banks would be uniquely positioned to verify and protect identity because so much personal data they use today to verify identity quite honestly, has been hacked. It’s been made public through data breaches. What we’re proposing is adding an additional form of data—biometric information—in a way that will allow banks to continue to use the data they already have but with multi factor authentication.”
ID verification using ITbiometrics BCD also includes an additional security layer with liveness detection to ensure your biometric information has not been replicated in some way. The liveness detection on the fingerprint reader verifies pulse, blood temperature, and blood pressure that make sense for your encryption pattern.
“It’s an anti spoofing mechanism where you not only detect the biometric signature, you also determine whether it was a living person that applied the signature. It’s another layer of protection and security that we offer.” Andy smirks, “People have been able to spoof a thumbprint and hack into iPhones with a gummy bear or gelatin material, and we want to ensure this scenario never happens for our users.”
And no banker wants that.
“The opportunity is, instead of having someone come into the bank and provide multiple forms of identity to, to authenticate their identity in order to make a transaction of some kind that could be done through the BCD as a biometric credentialing device, it’s doing the same identity credentialing, but it’s just doing it from the comfort of someone’s home.”
As this pandemic shows no signs of letting up, a world with convenient personal credentialing devices sounds promising.
We envision banking identification to become seamless and more secure through biometrics.
But we can’t do it without you!
Join us by learning more about our RegD campaign and how you can get involved by investing in the future of biometrics!