Increasing Instances of Fraud and the Need for Strong Authentication Measures Drive Adoption of Biometrics in the Banking and Financial Services Sector
Growing need to protect financial transactions from fraud and security breaches is poised to drive the global Biometrics for Banking and Financial Services market to reach US$9.2 billion by 2024. The increasing sophistication of intruder attacks, the increasing use of mobile devices for financial transactions, rising popularity of biometrics as a strong authentication method are also driving growth in the market.
Banks and financial services firms across the world are confronting significant threats on account of rising incidences of fraud, security breaches, and identity thefts, which are affecting banks and their customers. In the present day highly digitized world, customers are extensively using the Internet for carrying out financial transactions through desktops as well as mobile devices. As a result, customers are required to manage growing number of PINs and passwords, which has adverse impact on overall customer experience. Threats are also emerging due to the high risk of passwords and PINs getting stolen. Due to cybercrimes and fraudulent transactions, banks globally are confronting huge financial losses annually. One of the greatest risks facing the banking and financial services industry is in the form of identity theft, with stolen credentials of individuals known to cause losses of about US$50-60 billion annually. Fraudsters target point of sale terminals, kiosks, ATMs, and web apps for carrying out fraudulent transactions. The emergence of new technologies is further leading to increased sophistication of threats and attacks, thus necessitating banks to keep updating their security practices. The focus is especially on security technologies that are accurate, reliable and can help in protecting the customer against fraud. One of the measures being actively pursued by banks is biometrics, since the technology assists in the creation of secure banking environment by reducing instances of identity fraud, establishing audit trail of transactions, and protecting financial data.
The global market for biometrics in banking and financial services sector continues to grow at a robust rate driven by the increasing focus of companies on offering highest security to customer transactions through use of biometrics-based authentication measures. By using the unique biometric identifiers of individuals, such as fingerprint, iris scan, voice recognition and palm vein, banking firms are looking to prevent fraud since such characteristics are extremely difficult to mimic under normal conditions. Given the growing need for added security and protection among financial companies, the adoption of biometrics in the banking and financial services industry continues to gain traction. The shift towards biometrics is also being driven by the inability of traditional security measures such as PINs, passwords and tokens to effectively offer protection, particularly against the growing sophistication of intruder attacks. Biometrics is also emerging as a strong authentication approach, offering an additional layer of security to transactions being performed in the banking and financial services industry. The growing adoption of biometrics technology in banking and financial services industry is also being driven by the rapidly increasingly penetration and use of mobile devices for performing various financial transactions. Rapid pace of advancements in biometrics space, and the increasing availability of low-cost devices are ensuring that biometrics-based authentication is highly secure and affordable for the banking and financial services sector.
As stated by the new market research report on Biometrics for Banking and Financial Services, Asia-Pacific represents the largest regional market, worldwide. Asia-Pacific is also forecast to register the fastest CAGR of 21.2% over the analysis period. Biometrics technology is increasingly finding use in the financial services and banking industries across Asia-Pacific countries, for enhancing customer service and more importantly for identity verification and preventing identity theft in financial transactions. The technology is being adopted to fortify security infrastructure of various financial institutions and for safeguarding customer bank accounts. Also in developing regions of Latin America and Asia-Pacific, the adoption of biometrics technology in banking sector is being driven by the need to provide services to the underserved or unbanked, and the growing realization of the competitive edge offered by self-service financial and banking services.
Major players in the market include AllTrust Networks, CashFlows Europe Limited, Cross Match Technologies Inc., Cyber-SIGN Inc., Fujitsu Frontech North America Inc., Gemalto N.V, HID Global, IDEMIA, Ingenico SA, Nuance Communications Inc., Precise Biometrics AB, Suprema, and VoiceVault Inc., among others.
The research report titled “Biometrics for Banking and Financial Services: A Global Strategic Business Report” announced by Global Industry Analysts Inc., provides a comprehensive review of market trends, issues, drivers, mergers, acquisitions and other strategic industry activities of global companies. The report provides market estimates and projections for all major geographic markets such as the US, Canada, Japan, Europe (France, Germany, UK and Rest of Europe), Asia-Pacific, and Rest of World.
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