Introduction to Biometrics and Electronic Signatures
Biometrics is a technology used to identify a person based on their unique physical and behavioral characteristics, which may include fingerprints, hand geometry, irises, voice patterns, and others. Biometrics belongs to the fastest growing innovative security technologies used in the fields of banking, finance, military, and government. In this paper, biometrics will be compared against electronic signatures. Finally, their combined use will be demonstrated on an account opening process in the electronic environment. The benefits will be analyzed, and the applicability of both in the fields of banking, finance, military, and government will be discussed.
The financial services industry, often abbreviated as BFSI, is the main driving force that is able to keep the global economy in motion. It covers a broad range of services, including banking, insurance, securities trading, financial planning, asset management, corporate finance, credit facilities, personal finance, and many others. To safeguard clients and provide them with a seamless experience, financial institutions are continuously introducing new age technologies and investing heavily in security measures. Organizations in the BFSI sector are adopting biometrics and electronic signatures (E-Sign) in order to minimize fraud, reduce costs, and increase the overall efficiency of routine operations.
Enhanced Security Measures
Biometric security measures are the most effective way for enhanced due diligence and are seen less as an invasion of an individual’s privacy but more as a key that can’t be lost or replaced. In many ways, the implementation of biometric solutions along with electronic signature applications is being used to replace archaic and often confusing technology with greater security while increasing an organization’s operational efficiency and managing costs. Biometric technology is rapidly catching on as the risky online environment makes it an important part of the overall security strategy for both physical and logical access control.
In the world of banking, biometric technology has proven to be the best method for reliable identification. High-profile security breaches have caused serious reputational damage to both companies and institutions. When it comes to finances, banks and other financial organizations looking after the public’s holdings acknowledge their regulatory requirement to implement strict customer verification procedures. Counterfeiting, ID theft, and illegal entry through fake IDs is risky and costly, and organizations are starting to look for authentication methods that can’t be hijacked or stolen. Biometrics industry leaders have developed a specific set of standards that serve as guidelines for the implementation of these specific biometric technologies.
Improved Customer Experience
In addition, it has been demonstrated by several financial services organizations that frequent and varied customer engagements have led to an expansion of the customer base as well as enhancing customer loyalty and average spend. This customer experience is, however, helped or hindered by levels of fraud intuitively expected by the consumer. They expect their bank to maintain strong security when dealing with their accounts, but the introduction of strong security measures has to be carefully handled to avoid it having a negative impact on the customer experience. Access to mobile banking apps might have grown significantly in the last 5 years, but the amount of online transactions they handle hasn’t kept pace, with many customers still falling back to the more trusted home computer for financial transactions. The ability to use biometric security for a wider variety of financial transactions and/or through the device the customer feels most comfortable with will help reduce this fallback.
There is a clear drive in the banking sector to deliver a better and more rewarding customer experience, which is yielding significant benefits. Streamlining processes to save time and effort on the customer’s behalf gives financial services organizations more opportunity to spend time talking to their clients, identifying and speaking to them about the future needs and requirements, as well as increasing contact. As regards new account openings, disposing of the need for physical documents is not only a significant time and cost saving but is also a customer convenience bonus.
Regulatory Compliance and Legal Frameworks
Non-biometric methods being employed to provide customer authentication require the customer to remember and input usernames, multiple-digit pins and now TAC codes. Long term, non-biometric authentication numbers (such as PINS and TAC codes) are often reused and used across a variety of devices. The greatest emphasis to date, outside of biometrics, has been focused on developing increasingly more secure methods for handling the transmission of the PIN enabling the user to confirm their identity. Biometric solutions provide unique properties that cannot be transferred or stolen but, as is important for all electronic access routes, the elements that make up a biometric feature set relating to the human operator must not be exploited if the customer is to have confidence in using that access route. Looking across methods of non-biometric and non-crypto authentication, it is argued that selected physical biometric solutions measuring unique properties through behaviors common to everybody are increasingly the method of choice for the financial services industry dealing with the anonymous customer surfing for accounts and services.
Regulatory compliance and legal frameworks require robust due diligence measures across diverse psychological attributes such as behavior profiles alongside robust security measures including two or more factors of authentication. Technology is rapidly changing the back and front end of financial and e-commerce services where mobile phones are typically employed for the majority of non-branch-based transactions. To improve the customer experience for standard and risky transactions, security inspections still need to account for and not impede the speed, ease of use and large array of available mobile feature sets. Added to this, moving a large customer base from branch to electronic services does make the job of the criminal easier as not only is the landscape potentially a more lucrative environment but attempts to coerce or bribe staff in enabling criminal activity are dissipated at the electronic interface.
Cost Savings and Operational Efficiency
Electronic signature solutions eliminate many of the steps a company takes to create, handle, distribute, and archive paper signatures. The market for electronic signature solutions has also evolved. Smart card and token-based systems have been supplanted by web-based solutions that create electronic signatures from email and other electronic documents used in the operation. The term “electronic signature” only displays an electronic image of a handwritten signature embedded in an electronic document. These systems were originally adopted to facilitate the on-demand verification of signatures used in web-based financial environments. A mixed approach, in which a signature solution was initially deployed that created and embedded a text string representing the signature in a text author’s document, was required to meet the requirements of the Uniform Electronic Transactions Act, but it lacked a management solution.
Companies are always looking for new ways to achieve higher productivity, efficiency, and cost savings. Eliminating the time-consuming manual processes originally hidden in an electronic signature solution and the use of biometric authentication for identity verification and ongoing user authentication, log-on management, and transaction validation are cost-consuming expenses. Streamlining operations within the private sector is even more important after recent global financial crises. This chapter analyzes where biometric electronic signatures and other related solutions can be used to provide cost savings and improve efficiency for today’s global financial infrastructure.