Banks adopting biometrics against fraud

A new impact report finds that the use of knowledge-based analytics are on a fast decline, while various forms of behavioural analytics continue to see strong growth.

The report, “Digital Channel Fraud Mitigation: The Mobile Force Awakens,” details the latest threats to banks and their customers, and looks at the technologies being used by banks. The research, which is based on spring 2015 Aite Group interviews with 26 fraud executives from 19 North American financial institutions that have more than $50 billion in assets, details the latest threats to banks and their customers, and delves into the technologies banks are using today and will roll out over the next two years.

The report’s findings include:

• More than half of the banks using knowledge-based authentication technology expect their use of the technology to decrease over the next two years.
• Six of the interviewed banks will enable biometrics for mobile banking login by the end of 2015.
• Various forms of behavioural analytics continue to see strong growth, with the majority of banks having at least one solution in place and many having a second in either production or pilot.
• Seventy-nine percent of banks expect to increase investment in online and mobile fraud mitigation technology spending over next two years. The 20 percent of financial institution executives who are facing flat budgets have expressed frustration, with one stating: “Race cars don’t have good brakes because they go fast, they go fast because they have good brakes.”

Examples of behavioural analytics/biometrics can include the way someone types, holds their device or otherwise interacts with it. When combined, continuous behavioural analysis, and compiled behavioural biometric data, deliver far more intelligence than traditionally available without interrupting the user’s experience.

Julie Conroy, research director, Aite Group, said in the report, “While this technology is sometimes classified as biometrics, it is not subject to the same onerous laws as traditional biometrics, therefore Aite Group categorises them as a form of behavioural analytics. When the biometric is paired with strong device authentication, it is even more difficult to defeat. Many biometric solutions also include liveliness checks, to ensure it’s a human being on the other end.”

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