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Why Biometric Authentication Systems are Replacing Traditional Methods?

Biometrics Revolutionizing the Banking & Financial Sector

Biometric technology was introduced to strengthen security and improve productivity. Today, biometric devices and time attendance machines are employed substantially for customer verification and to track employees’ attendance in various banks and finance institutes globally.

The time attendance system acts as a robust identity verification tool and precisely tracks the attendance of the employees.

Challenges in the BSFI Sector

When it comes to identifying an individual, the banking and financial service industry (BSFI) is facing a myriad of problems. According to Statista, there were 6800 notified incidences of banking fraud cases across India.

Major Problems faced by the BSFI companies include:

  • Identity theft.
  • Credit card cloning.
  • Data security.
  • Customer onboarding (KYC).
  • Privacy protection.
  • Customer authentication/verification.
  • Internal identity-based threats.

How Biometric System Solves these Problems?

As we are moving towards digitalization, providing reliable, secure, and friction-free customer experience is getting more important than ever.

Here are a few ways the biometric system solves the problems mentioned above and revolutionalizes the BSFI sector.

  1. Know Your Customer (KYC)

KYC regulations are aimed at preventing money laundering. After Government made Aadhaar mandatory, more and more banks are deploying biometric identity verification solutions and are asking for Aadhaar cards. Fingerprints provide a reliable way to identify a customer against a pre-existing database.

  1. Enhanced Customer Experience

Instead of remembering passwords or pins, customers can now verify themselves via fingerprints, iris, and other unique human traits. This not only eliminates the need to remember otherwise robust passwords, but it also offers enhanced security. Also, biometrics these days are much faster.

  1. Concrete Audit Trails

Apart from enhancing security and improving customer experience, biometric systems help the banking systems to efficiently and precisely carry out audit trails of transactions.

  1. Employee Authentication

As mentioned above, the time attendance machine is not only for customers, but it is also for the employees. Many banks are replacing passwords at employee terminals to enhance identity and access management. This helps banks eliminate internal identity-based threats.

IDFC and SBI were the first to introduce biometric sensors in the Indian banking industry for reliable transfer of payment involving smartphones. And now, the biometric system is widely adopted throughout the country.

Whether you’re a bank or a microfinance company, having a biometric system is crucial for you. Star Link is the leading manufacturer of door access control systems and has been providing it to various banking and financial sector for the last 23 years.

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