High cost of biometric ID putting off financial firms
DTB will spend up to Sh4.5 billion on enhancing its digital platform and opening new branches in the next two years as it looks to grow its customer base in the regional market. FILE PHOTO | NMG
Biometrics can play a key role in providing ease of use and convenience when used for authentication.
However, the technology is expensive when used for identification.
High costs associated with deployment of biometrics are hampering the adoption of customer identification technology by financial firms.
This is according to a new study by the Financial Sector Deepening Africa (FSD Africa) carried out in partnership with Consult Hyperion.
Biometrics is defined as the process by which a person’s unique physical and other traits are detected and recorded by an electronic device or system as a means of confirming identity.
Last year, Standard Chartered Bank Kenya (StanChart) #ticker:SCBK and Guaranty Trust Bank Kenya (GT Bank) introduced biometric mobile access systems which allow customers to use their fingerprints to log into their accounts.
The FSD Africa study notes that biometrics can play a key role in providing ease of use and convenience when used for authentication. However, it notes that the technology is expensive when used for identification.
“Due to the cost and complexity of achieving very accurate biometrics, financial services organisations are unlikely to rely heavily on them for identification,” the report says. “Organisations will continue to rely on third party identification to meet customer due diligence requirements, in most applications.”
The study’s findings come at a time when identity authentication based on biometric-matching is increasingly being adopted by financial sector firms including banks.
Where passwords and PIN numbers were once a primary security option, individuals’ physical uniqueness have begun to transform the way they interact with the online world.
The FSD Africa study notes that customers require “low cost, convenient and reliable verification methods”, using an approach that offers appropriate speed for the transaction being performed.
“Banks require straight forward systems for low-cost enrolment and lifecycle management, using a biometric that offers a level of security appropriate to the action being undertaken,” it says.
The enhanced security measures come at a time when more people are choosing to bank on their mobile phones, which has made the security of the platforms critical.
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