person scanning finger at ATM

Why Banks Worldwide Are Turning to Fingerprint Biometrics

Banks and other financial institutions across the globe have been adopting biometrics as a way to improve the customer experience and increase security against identity fraud, money laundering and account takeovers. 

Biometrics are used by banks to onboard customers and, after onboarding, authenticate them when conducting transactions, such as at ATMs. Biometric identity authentication can help ensure that transactions are not fraudulent — and are less time-consuming than traditional ways banks use to ensure that the person accessing the account is the account holder. Banks also use biometrics as an internal control, securing staff access to sensitive data and restricted areas.

Fingerprints are the most common modality of choice for bank biometrics due to their speed, ease of use, high accuracy and cost-effective nature. 

For example, Banco Supervielle in Argentina uses fingerprints to verify the identity of pensioners collecting their benefits. Before adopting fingerprint biometrics, the bank could only prevent fraudulent claims by making all claimants go through a time-consuming authentication process. Banco Supervielle’s decision to use fingerprint authentication presents a tested, real-world example for other organizations looking to provide a more secure and better experience for their staff and pensioners.

The Benefits of Biometrics in Banking

The security and compliance benefits of biometrics are significant drivers of the technology’s adoption among financial institutions. All banks are subject to know your customer (KYC) and anti-money laundering (AML) regulations that require a high level of identity verification assurance for new customers.

Biometrics are one of the few ways of meeting the identity assurance standard these regulations require. An in-person fingerprint scan is the same method of identity verification used by the U.S. federal government to perform background checks.

This biometric-backed strength of identity assurance providing regulatory compliance also protects against fraud. High-accuracy fingerprint scanners provide the highest levels of security and aid compliance, while improving the customer experience.

As an emerging technology, fingerprint biometrics can also help to build the brand of organizations that adopt them. The use of advanced technology generates customer confidence and demonstrates that the bank is not stuck in the past. 

Choosing the Right Fingerprint Scanner for Your Bank

The standards behind KYC and AML regulations cannot be met with the fingerprint scanners in widespread use on a mobile phone. Instead, banks must deploy dedicated hardware to achieve the benefits of biometrics at branches.

As a relatively mature biometric modality, there are standards used throughout the world for fingerprints, notably including the U.S. Federal Bureau of Investigation’s Next Generation Identification (NGI) Image Quality Specifications (IQS). The common standard for image quality assessment is provided by the National Institute of Standards and Technology (NIST).

The FBI standards are often referred to in procurements around the world, including the PIV (Personal Identity Verification) specification which ensures the interoperability and quality of single finger scanners used for one-to-one biometric matching. The NIST Fingerprint Image Quality (NFIQ) 2 is open source software used for assessing the quality of fingerprint images, with reference to the ISO/IEC 29794-4 standard for biometric sample quality.

Banks in many countries must also adhere to other mandates and fit into ecosystems that involve specifications used for national ID cards.

The right fingerprint biometric scanner must also provide sufficient accuracy to work at scale, while providing the best user experience. A financial institution with tens of millions of customers must match only the correct user to their account. While fingerprint biometrics tend to have low false accept rates (when the wrong person is granted access to an account), cheap fingerprint scanners have higher false rejection rates (when the legitimate customer is not matched and then blocked access). Scans should work the first time to deliver the kind of confidence and experience customers expect.

Banco Superveille selected fingerprint readers powered by multispectral imaging (MSI) technology so they could consistently match the aging fingers of elderly customers even in challenging lighting conditions and harsh environments, and the bank was able to authenticate more than a million retirees faster than expected with fingerprint scanners.

Liveness detection is another important consideration, providing protection against relatively sophisticated fraud attacks. Fingerprint scanners using advanced imaging, like MSI, can accurately detect spoof attempts, which is not a capability of some lower-price fingerprint scanners.

The standard for liveness, or presentation attack detection (PAD), is an ISO/IEC 30107 requirement. Testing for compliance to this standard is available from independent laboratories and demonstrates the effectiveness of biometric systems against attacks with varying levels of sophistication. The highest level of testing against this standard from NIST-accredited labs is ISO 30107-3 PAD Level 2, which moves beyond simplistic fakes to consider effectiveness against 3D prosthetics and sophisticated fakes made with silicone and latex.

Independent PAD Level 2 testing to the ISO standard illustrates another way in which multispectral fingerprint scanners, such as HID’s Lumidigm V-Series, are appropriate for high-security use cases like bank transactions.

Multispectral fingerprint scanners have been proven effective for use cases where security, consistency and accuracy are important. Leading biometrics device providers can help financial institutions integrate advanced fingerprint scanners into their business processes for improved security and customer experience.

Tightening regulations, increasing fraud concerns and advances in biometric technology combine to make this the appropriate time for many of the banks and financial institutions that have not yet adopted fingerprints for in-branch identity authentication and verification to do so.

Read HID’s recent eBook, A Definitive Guide to Fingerprint Technology, to explore popular fingerprint sensing technologies, common use cases and a checklist on key considerations for selecting the right readers for your bank. Or, learn more about how biometrics are transforming the banking industry today. 

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