COPENHAGEN, Denmark -- Biometrics took center stage during a discussion on balancing customer experience with mitigating fraud and cybercrime Tuesday morning at Money20/20 Europe. While there are clear advantages to corporates adopting this innovative technology, no solution is perfect.
From the point of view of Michael Hagen, managing director Europe and Corporate ID Strategist for Mitek, biometrics are authenticators, but they are not identifiers. “Your face doesn’t mean anything if I don’t know who the face belongs to—or your finger print or your voice,” he said.
Mitek develops ID document verification technology. Similar to using a mobile device for remote deposit capture, Mitek’s solution allows users to scan government-issued ID documents (driver’s licenses, passports, etc.), which they can then use to identify themselves when making purchases. Hagen stressed that he wasn’t trying to promote his company, but noted that if you connect your face, fingerprint, voice, etc. with a government issued ID document, then it becomes an identifier.
Arne Vidar Haug, co-founder of digital signature developer Signicat, feels that biometrics are an ideal solution for both businesses and consumers because they verify who the customer is without inconveniencing them. “It’s easy to use,” he said. “You don’t have to remember your thumb.” However, he noted that fraud detection and prevention should never be limited to just one factor.
Constantin von Altrock, co-founder and former CEO of IRS Analytics and CTO of IBM Safer Payments, agreed. “If fraud prevention is limited to just one single factor, it’s great—if that factor is working. As soon as the criminals find a way around it, then you’re fully exposed,” he said. “So a best business practice is to never rely on just one way of verifying identity.”
Von Altrock noted that if a company implements biometrics, it must take certain factors into consideration that come at the expense of time and money. “You will be dependent on an infrastructure that is capable of doing that. You will have a certain amount of false alarms. If you use fingerprints, you have to deal with the fact that about 3 percent of the population have no fingerprints that can be easily read. So there is a certain price for using fingerprints, voice and selfies,” he said.
Von Altrock favors analyzing customer behavior as an authentication technique over biometrics. “Behavior doesn’t depend on any type of sensor,” he said. “I don’t have any type of an infrastructure I have to deploy. It’s not an extra step. Yet we all give away a lot about who we are and what we do in the sequence of transactions we make over a considerable amount of time. And this is accessible. It’s free, and it’s without any errors; my financial transactions are there and they’ve already been done.He concluded: “I’m not recommending only using behavior alone; all I’m saying is that you have a number of different measures that you can use. It’s up to you to find the best combination of measures that can give you the best balance between the best customer experience and keeping fraud and risk in check.”