Banking and biometrics: Top trends in technology and fraud prevention

What are Biometrics?

Authentication, authentication, authentication. Authenticating a member’s identity before fulfilling a request or transaction is vital for member protection and fraud prevention. Authentication layers should be secure, accurate, and not easily counterfeited.

Traditionally credit unions authenticate members with out-of-wallet information, such as member number, PIN, or debit/credit card number. Fraud continues to ramp up as the bad guys get more clever, and out-of-wallet information as the only means of authentication is becoming less secure.

Biometrics is becoming increasingly useful for stronger authentication measures. Biometrics use a person’s unique, non-duplicatable body to authenticate their identity before performing a transaction or providing account information. Some types of biometrics used:

• Fingerprint(s)
• Iris scans
• Hand or foot geometry
• Facial thermography or scan
• Keystroke dynamics
• Gait
• Body odor
• Veins
• Voice

While many of these uses of biometrics may seem far-reaching for the banking industry, voice ID is becoming increasingly useful in member authentication. Here are some ways the banking institution is benefiting from voice biometrics.

Three Benefits Voice Biometrics Brings to Banking

1. Increased member service

As digital transformation continues to impact credit unions, members come to expect faster service, but they don’t want to sacrifice security either. Credit unions must delicately balance convenience and security. When a credit union has an advanced voice recognition technology in place, a sample conversation could look like this:

Member calls into the credit union to request a balance check on their loan.
Branch representative asks for their voice password.
Member: My name is [first name] [last name]. Use my voice as my password.
Immediately the voice ID technology has identified the member and the branch representative can pull up their account and provide the member with the loan balance.

With voice recognition technology, a member can access their information via call center with a simple phrase. A member always has their voice with them, so this speeds up the member service interaction and allows the member to conveniently authenticate their information and move on to their request or transaction. At any point, the member can opt out of using their voice as their password.

The speed of the voice ID authentication process gives time back to both the member and the credit union. With increased member ease and speed, credit unions have additional bandwidth to process more transactions.

2. Enhanced authentication

If a member visits a branch or calls into the call center, the staff member typically asks for out-of-wallet information to validate the member’s identity. However, what if a member has had their information stolen in a data breach or physical attack? In this case, providing out-of-wallet details would be an ineffective and inconvenient way to validate the member’s identity.

In some instances of fraud, the bad guys will call the member and record them stating their name and then use that snippet to complete fraudulent transactions on that member’s account. Advanced voice ID technology can recognize and validate a member within just 10 seconds of processing their voice. For safety and compliance, the voice technology should read the voice imprint upon each authentication, not store it in the system. Advanced voice recognition technology both recognizes the member’s voice as well as the number the member is calling from to detect spoofing. This enhanced security can stop fraud in its tracks. Ultimately this enhanced authentication can result in less claims and losses due to fraud.

3. Maintain compliance with dual authentication

The Federal Financial Institution Examination Council (FFIEC) recently announced a recommendation for enhanced authentication for financial institution call centers.^[1] If this recommendation is implemented as regulation in 2022, this will impact how credit unions compliantly authenticate members calling into their call center. The current recommendation that is expected to pass would require credit unions to authenticate a member with two forms of identification. Regulators will continue to monitor this recommendation in their audits. To proactively respond, credit unions should consider how voice ID can serve as a dual form of authentication.

Biometrics will continue to be a secure form of member authentication. Specifically, voice recognition technology is a powerful tool to proactively fight fraud on behalf of your members.

As members demand more convenient service and as regulations increase, credit unions of all sizes should consider how to implement voice biometrics into their authentication measures. With the right technology you can stay one step ahead of the bad guys.

^[1] FFIEC. 2022. https://www.ffiec.gov/press/PDF/Authentication-and-Access-to-Financial-Institution-Services-and-Systems.pdf