For businesses navigating the digital age, fraud is a huge issue. Cybercriminals exploit companies in every industry, using account takeover, social engineering, and user impersonation techniques to access customers’ bank accounts.
Online payment frauds increased in the year 2017 following a downswing earlier in the decade, according to the 2018 Association of Financial Professionals payments fraud report, which J.P. Morgan published. According to the study of nearly 700 treasury and finance practitioners, payments fraud affected a staggering 78 percent of all organizations last year.
Financial firms with a long-term outlook are seeking ways to improve the balancing act between cyber-security and user experience. With the latest developments in Artificial Intelligence and Data Science, the financial institutions have found a sustainable way to secure customers from cyber-attacks and improve their user experience. Financial institutions implement Behavioral Biometrics as a significant weapon against cybercrime.
What is Behavioral Biometrics?
Behavioral Biometrics is a form of fraud detection technology that analyzes a user’s digital-physical and cognitive behavior. Behavioral Biometrics distinguishes between legitimate users and cybercriminals, by identifying individuals based on their online behavior and interactions rather than static information or physical attributes such as what they know or access.
In case you’re wondering, do we need a new way to distinguish between online users and cybercriminals? Let us look at some prime purposes of using Behavioral Biometrics.
To begin with, it has become all too easy for cybercriminals to obtain or open a fraudulent account by finding, stealing, or purchasing personal data such as email and physical addresses, phone numbers, birth dates, and other personally identifiable details. Second, cybercriminals have used malware, remote access software, and other technology to reveal the vulnerabilities of passwords, system ID, one-time passcodes, and other authentication tools when used alone. Finally, because the digital experience has taken center stage, fraud detection technology must strive to make the journey for the majority of successful users as frictionless as possible.
According to The New York Times, the Royal Bank of Scotland, one of the world’s largest financial institutions, implemented behavioral biometrics technology in 2016. In August 2018, the bank rolled out the platform to all 18.7 million of its customers after testing it on wealthy private account holders. When users log in to monitor their RBS accounts, a hidden software tracks their activity, logging over 2,000-minute digital proclivities in the hopes of catching fraudsters.
Here is the Main Appeal of Behavioral Biometrics:
Behavioral Biometric is far more efficient because it eliminates the previous process of user verification. A great example of this, which we will discuss ahead, is that users don’t face usual false declines for most of their requests. Behavioral Biometrics works in the context of sessions and builds user profiles using machine learning.
Many banks follow Royal Bank of Scotland’s footsteps and apply behavioral biometrics technology at scale, as demonstrated by the aforementioned behavioral biometrics investment predictions. Due to the market’s relative immaturity, companies seeking reliable solutions can find it challenging to identify behavioral biometrics partners that can deliver.
Here’s How Biometric Verification Works:
If your financial institution uses Biometrics for verification, then remember, “You are the Password.” In the previous verification systems, the verification input is a password, usually a string of characters. These passwords can be stolen as they are easy to copy and used in your absence but in Biometric verification the inputs are nearly impossible to be copied. The inputs in Biometric verification is unique for each user.
There are two main categories of standard biometric inputs, physical and behavioral:
1. Physical Inputs:
Fingerprints, facial patterns, handprints, and eye patterns are examples of physical biometric inputs. One or more of those features are scanned and compared to your profile, depending on the biometric system used, to ensure that it’s you.
2. Behavioral Inputs:
Speech, position, and typing patterns are examples of behavioral biometric inputs that can be used alone or in combination with physical inputs. You might have to say something out loud to check your speech while using a device that uses behavioral Biometrics. Other behaviors, such as the way you type, may be used to verify your identity on individual computers.
The most secure form of input is Behavioral Biometrics because they are deeply ingrained in the user’s minds and habits, which cannot be easily wiped-off. Besides, a fraudster could obtain a copy of your fingerprints or a high-resolution photograph of you. This fraudulent activity would be difficult to accomplish, but it is still an option.
There are three ways, Behavioral Biometrics improves and secures online payment experience:
1. Improving User’s Onboarding Experience:
Present fraud control methods treat prospective customers like offenders, creating significant friction in the account opening process, deferring applications for manual examination, and incurring high operating costs. By recognizing behavioral intent to detect unlawful conduct versus that of a legitimate applicant, behavioral biometrics provides better detection.
For instance, high familiarity with data is linked to genuine users, while high familiarity with the application process and online forms are linked to fraudulent activity. Behavioral Biometrics makes onboarding easier by reducing the number of false rejections. Revenue increases as more new accounts and applications are accepted. Furthermore, customers who have an excellent first encounter with a bank are more likely to use the bank’s services again and recommend them to others.
2. No Annoying False Declines:
Nothing irritates users more than a false decline. Even though they’re supposed to protect customers, it’s always frustrating when a bank mistakenly flags a transaction or account opening as fraudulent. Step-up authentication requires consumers to go through extra measures to identify themselves, such as entering an out-of-band SMS passcode or calling customer service.
Behavioral Biometrics eliminates false declines by assessing the likelihood of a fraudulent session based on the user’s behavior rather than their position or computer. Behavioral Biometrics operate in the periphery, requiring only step-ups when the session is considered high-risk.
3. Account Takeover Frauds:
Making users feel secure in the digital world is one of the most challenging aspects of digital transformation. Fraud and identity theft have become all too popular, with nearly ten billion account credentials exposed in data breaches in just the last few years.
Behavioral Biometrics takes account takeover identification to a new stage, picking up where many other fraud prevention methods leave. The technology gathers powerful behavioral insights from users’ real-time physical and cognitive actions through multiple digital platforms.
Behavioral Biometrics profiles specific traits at the user level and compares current sessions to historical profiles to spot shifts and abnormalities. This behavioral analysis takes place in the periphery, allowing customers to go about their banking business while maintaining full security.
To sum it up, fraud prevention methods were in dire need of an upgrade, and Behavioral Biometrics has provided the upgrade in cyber-security. All major financial institutions are now implementing Behavioral Biometrics, to provide safe, secure, and easy online payment transactions to their valuable users.