The value of biometrics to SMBs

Over the past few years, society has become much more digitally savvy, and customers today expect businesses to bring safety, ease and convenience to everyday life.

The value of biometrics to SMBs

Over the past few years, society has become much more digitally savvy, and customers today expect businesses to bring safety, ease and convenience to everyday life. More streamlined processes and experiences – especially in times like this – help people interact with businesses in a safe and secure way, presenting a great opportunity for small and medium sized businesses to utilise the technology available to them to help society adapt to the new ways of doing things.

The recent rise
of the contactless limit
is a great example of how the banking industry is quickly adapting to the new environment by using technology. The quick response to the current situation meant businesses could easily provide a solution to health and safety concerns associated with handling money and chip and pin terminals – and play their role in stopping the spread of the virus. And while the announcement encourages people to avoid chip and pin contact, it also shone a light on the handling of cash and how it’s linked to the spread of disease.

One of the likely outcomes of Covid-19 in the long term will be an acceleration of the move away from more traditional methods of payment. Whether it will be a move away from cash to chip and pin, or an increase in apps usage as well as biometrics. Ultimately, the payments industry has wanted to make the shift away from cash for some time now; the hesitancy to rely more heavily on digital payments has come largely from retailers and the general public. Given the current circumstances it’s likely that the payments industry will rise to this challenge, if not look to accelerate this change.

For small and medium businesses – which represent 99.9% of business in the UK – this will mean readjustment, and implementing new or updated payment technologies. Whilst at first this can seem as an additional cost – something far from ideal in the current situation – this will also show that they put their customers’ health and safety as a top priority; but also that there are open to innovation.

As such, biometrics is posed to gain rapid popularity in the near future as more and more companies realise moving away from cash is the most hygienic – and forward-thinking – approach to payments.

The future is biometrics

Currently, many payments are already being made using biometric authentication. Consumers are able to make payments with their smartphones and other devices, such as smart watches, by using FaceID and fingerprints as forms of authentication. This is a trend that is only set to grow. 

In fact, today, biometric
authentication is the second most important (39%)
technology-enabled banking service for consumers, behind mobile-banking (46%), according to a recent study. On top of this, technology that enables people to pay through different devices, like fitness trackers (31%), also plays an important role in the financial life of Brits.

For many SMBs, the decision to enable biometrics for payments is often more about streamlining their own banking services; not just for the benefit of customers. SMBs typically handle a lot more money in their own bank accounts, so it makes sense to secure these services with biometrics, to avoid losses and fraud. In the past this has been done by in-branch biometric scanners but now the same can be achieved by using online services and authentication apps that apply Face-ID or Touch-ID. 

The use of biometrics by SMBs should be considered the new normal, especially as it allows for a far more robust and effective audit trial; something that is particularly important in cases where multiple people manage the account. It prevents all the inherent risks that come with shared, lost or mismanaged passwords.

And although at first, businesses will be faced with the expense associated with these types of payments, this is an investment – one that won’t just help drive down the need for physical contact, but also safeguard against criminal activity.

A solution to core requirements

In 2019 alleged fraud reached over £1 billion, and as figures continue to rise each year, businesses have a duty to do their best to safeguard against criminal activity, both for their customers and for themselves.

Biometrics technology means banks can put in place more barriers to protect against cyber criminals – although no solution is a cure for all fraud, enhanced cyber security does play an extremely important role. Instead of just using a password that can be forgotten, stolen, or hacked, customers can access their account using their own biometric data – which can’t be duplicated (or at the very least, it is much harder to copy or fake fingerprints compared to passwords).

A good starting point when introducing consumers to biometrics at lower risk is a fingerprint offering. However, as cyberattacks become more complex, other forms of biometrical identification might become more popular.

One example of a more complex, highly secure solution is Palm Vein, and in fact, it is already being used across the globe for applications such as financial transactions at ATMs, cashless payments and allowing a secure login to core applications such as banking platforms.

The system is able to scan over five million reference points of an individual’s internal vein pattern and because each person has a totally unique palm vein pattern, making it extremely secure.

While digital cash solutions are important at protecting against fraud and reducing physical contact, it also comes with a whole stream of benefits, like ensuring anonymity, ease of use, flexibility, and full inclusion across all societal groups. 

Educate first

We have progressed leaps and bounds since when it comes to the evolution of cash, card and then contactless – it’s about time we took the next big leap.

But before this can happen, what the financial sector must understand is that different customers and businesses want different things.

To navigate this, more should – and probably will – be done to support those in society who find it difficult to access and use today’s electronic payment services. This type of approach will be the way forward and through educating consumers, individuals will become more comfortable using technologies such as biometric authentication. 

As businesses look to adjust to meet a society with increasing technology demands and calls for safety, it’s important for small and medium sized businesses to understand the potential biometric authentication technology can provide a business.

It’s time businesses ensure that they are flexible and adaptive enough to be able to take advantage of the enormous benefit on offer from technologies that can support them and society in different ways.

Ian Bradbury
Ian Bradbury

Share via
Copy link