Biometrics: Modernising customer authentication for financial services and payments

Abstract

Payments stakeholders today face significant challenges to ensure that a customer is who they say they are, rather than a fraudster who has compromised the identity credentials of a legitimate customer. The strong emergence of electronic commerce where the customer is not physically present has made this challenge even more difficult. Biometrics is the use of automated systems to recognise individuals based on their biological and behavioural characteristics. Advances in technology and the integration of sensors into consumer devices such as smartphones have allowed biometrics to become a major authentication tool for both in-person and remote financial transactions. This paper reviews the most common biometric modalities currently in use for authenticating consumers. A high-level review of the technology utilised to support the biometric capture and analysis is provided along with a discussion of the advantages and challenges to the technology. The reader should leave with a basic understanding of how various biometric modalities work and are being used to strengthen the security of the payments system.