In this guest blog post our VP Sales Fredrik Sjöholm shares his thoughts on how digital identity can drive a cashless society. As customers demand a higher level of convenience, the use of digital services increases, which calls for stronger protection of the digital identity. Fredrik is convinced that biometrics is the ultimate solution for a convenient and secure authentication of digital identity.
Last week I participated in a panel at FinTech Connect in London with Daniel Lowther of CC Group and Tony Craddock from Emerging Payments Association to discuss how digital identity can drive a cashless society. While it’s impossible to say if society will ever become truly cashless, it is useful to look at the challenges that digital payments brings and what can be done to overcome these so that we can achieve the benefits and advantages of a cashless society. Today we live with a myriad of passwords, PIN codes etc. to identify ourselves in various digital payment and ID scenarios. We’ve essentially created a number of artificial ways to link a person to their digital identity. But we need to make it much more seamless and convenient to authenticate a person digitally while adhering to increased regulation around KYC, AML and PSD2. This is exactly where biometrics can help.
Biometrics is the measurement and analysis of unique physical or behavioral characteristics (such as fingerprint, face or voice patterns) used to verify a personal identity. This is done by creating and saving different templates of a certain biometric modality that can be analyzed digitally. Essentially, it’s a way to create a digital representation of a person or, their identity. If I use a traditional way to verify my identity such as a password or a token, it is possible for me to hand it over to someone else. But biometric templates are not transferable – I cannot hand over my face, fingers or behavior to anyone else – and so it is much harder to get access to a biometric template through fraud than other methods. This makes biometrics ideal in circumstances where trust and strong protection of digital identity is required.
The usage of digital services, such as mobile banking is continuously growing, as customers demand higher levels of user experience, which is driving the emergence of new and disruptive fintech technology along with online-only banks. In order to prove a customer’s identity, ensure they can conveniently and securely access their banking services – when and where they want to, and protect against fraud puts a real emphasis on digital identity and the importance of protecting it.
Digitization of products and services is also a priority among traditional banks and financial institutions, however, for them, a digital transformation isn’t usually easy or quick. Therefore, we also see a growing interest in open banking, a technology that can help banks in their digital transformation. By opening up its digital infrastructure to third parties like fintech providers using APIs, and allowing them to share customer data, banks are able to deliver innovative services to their customers that improve how they manage their finances. In this case it is also necessary to have strong protection of the digital identity.”
Most people today are familiar with biometrics. The starting point for using biometrics, for the majority of consumers was when the Apple iPhone 5s launched with a fingerprint sensor. Now we continuously see new types of payment applications and devices using biometrics, such as wearables and biometric payment cards that allow higher payment amounts without PIN codes.
Soon we will be using authentication solutions that combine different biometric modalities with data from our mobile devices, which will deliver a whole new level of both convenience and security by enabling passive and continuous authentication. This seamless and continuous authentication experience requires a few things to happen:
- Devices need to be equipped with sensors that can capture the digital identity of a person through biometrics. Solutions such as face recognition in new smartphones and fingerprint sensors that cover the entire phone display will make this possible.
- Multi-modal biometrics need to be in place, i.e. a combination of face, finger and behavior that enables a higher level of security and convenience.
- Key to all of this however is to ensure digital onboarding of the person by connecting their biometrics to a known identity (an ID document for example). After successful onboarding, different types of biometric modalities can be used for authentication in various use cases as appropriate
And in a few years, I believe we will come to a point where authentication will be entirely reversed, i.e we will be constantly authenticated through our biometrics and the point of action will be when I am not authenticated. This could happen when my fingerprint does not match when I open my bank application on the mobile, my face is not recognized at a checkout in a store or my behavior is different when initiating a digital transaction.
In conclusion, I believe that the winning solutions for digital identity authentication will be the ones that provide the right balance between convenience and security and enhances the user experience of the digital service in a secure manner. This is precisely where biometrics has a key role to play.
By Fredrik Sjöholm, VP Sales, Precise Biometrics