While ID and passwords have traditionally been the most popular mechanisms used in user authentication for online services, cyberattacks and associated crimes have been increasing on a global scale and the damage to the financial services sector is also expanding. One-fourth of the data breaches in 2017 affected financial organizations worldwide 1 81% of hacking-related breaches leveraged either stolen and/or weak passwords Identity Theft and Financial Access were the most pressing breach incidents in 2017 2 1: 2017 Data Breach Investigation Report
2: Breach Level Index
The financial world has dramatically changed in recent years and is at present without question one of the most challenging industry sectors. Banks and financial institutions worldwide are moving towards rapid digitization by adopting secure, flexible methods for customers to access services while improving security beyond simple username and password protocols. Increasing the productivity of staff and ensuring the security and availability of services is vital if financial institutions are to improve their efficiency, enhance their business effectiveness and provide timely and consistent customer service. As the financial services landscape moves ever closer to being digital-first, it is also essential for financial organizations to protect end users from fraudulent activity and, more importantly, to create confidence and trust in the digital space. Protecting customers’ banking information and creating a secure mobile banking experience is the biggest driver for adopting biometrics in the financial services sector. Hence, banks and financial organizations are looking towards biometric solutions to solve issues around malicious banking practices while improving customer experience.
Facts & Figures from the InfoBrief
The Cyber-Physical Threat is Real
Rising Level of Payment FraudFinancial institutes are increasingly looking at ways to address the growing risks of fraudulent transactions globally, as new, emerging banking channels become major targets for scammers. Recent Frost & Sullivan estimates show that global payment fraud would exceed $8 billion US dollars by 2021, rising at a compound annual growth rate (CAGR) of 10.2% from 2017 to 2021. Such a rise in financial fraud and identity thefts throughout banking systems has led to an increased demand for more stringent methods to identify customers.
Global Payment Fraud Forecast, billions of US dollars, 2017–2021FSource: Frost & Sullivan
Irreparable Business Costs
A recent study by Oxford Economics found a significant connection between breaches and listed company’s share price. Severe breaches of public companies generally result in a permanent loss of 1.8% in shareholder value worldwide 3. As a result, members of the board and senior management of financial organizations should act to protect shareholder interests by bolstering their internal defences and addressing security risks that can lead to these types of attacks.
Enhancing the Customer Experience with a Secure Digital IdentityDigital identity plays a central role in the finance industry by forging a personalized customer experience and combining ease-of-use and accessibility with security, privacy and control of consumer data. This InfoBrief emphasizes the importance of being human-centric instead of being techno-centric in the context of the financial services landscape.
NEC’s Advanced Public Safety Solutions
Creating an environment within financial organizations that is safe for clients and guards against the potential loss of valued assets is achievable with NEC’s advanced recognition systems.
Improve the Customer ExperienceNEC's advanced recognition systems can be implemented for functionally independent applications (e.g. face-based payment, know your customer (KYC) automation processes, etc.), or seamlessly integrated into existing biometrics security solutions – thus, creating a secure environment for financial transactions and enhancing the customer experience in the financial services sector
Access ControlLoss prevention of valuable assets becomes possible through NEC’s face recognition technology and fingerprint identification solutions that are capable of safeguarding mission-critical applications (User authentication, Mobile Banking, ATM, etc.) in large-scale financial institutes worldwide
NeoFace® Face Recognition Suite Automated Fingerprint Identification System Multi-Biometrics Solutions
Monitor IndividualsBy tracking on-site activity NEC’s intelligent video analytics technologies enable the monitoring of suspicious individuals as they enter and move about corporate facilities and publically accessible locations (Bank Branches, ATMs, etc.)
Aiming at reducing dependency on conventional password authentication and its vulnerabilities, FIDO (Fast Identity Online) has been attracting attention as a new means of online authentication that makes use of biometric technologies. NEC, as a sponsor member of the FIDO alliance, has been regularly contributing towards the improvement of authentication standards worldwide. NEC’s NC7000-3A-FS is a mobile-based client-side biometric solution that addresses the online authentication needs of customers by providing them with simple access in a secure environment to ensure swift transactions.
Facial Recognition System for Credit Fraud PreventionCredDefense, a Brazilian the fraud detection platform, implemented NEC’s NeoFace® Watch solutions in its database of over 130 clients, representing 20,000+ businesses. This integration enabled the company to accurately map the facial features of its consumers, whose image is captured either by a PC camera or smartphones and tablets. Results:
- Reduced number of frauds by over 90%
- Approx. R$1 billion annual savings by the clients
- Minimal false acceptance rate at less than 2%