Innovation in Mobile Banking – Part 2 – Authentication Technologies

Posted by | September 23, 2016 | blog | No Comments

innovation in mobile banking

[The last post in this blog series covered the essentiality of innovation in the mobile banking space. Now, we will take a deeper look at emerging and innovative authentication technologies.]

Authentication is the process of confirming the identity of a person or an entity by validating their credentials. In the traditional banking channels, the teller or the relationship manager interacts directly with the customer and authenticates them. But, securely authenticating the customers in the digital medium is fairly challenging.

The authentication mechanisms have also reasonably evolved along with the advancement in the technologies. This evolution can be easily categorized into 3 stages.

  1. Something you know – Passwords and Security Questions.
  2. Something you have – Security Tokens and One Time Passwords (OTP)
  3. Something you are – Face and Finger Prints (Biometrics)

The traditional password based authentication poses a security risk as it could be easily hacked via brute force or social engineering attacks. Financial institutions have also tried to strengthen the security with an additional layer of authentication, such as security tokens and One Time Passwords (OTP). In the case of security tokens, additional costs are involved and the tokens are prone to get lost, as the users always need to carry them. Using OTPs to authenticate usually annoys the users when it’s not delivered in time due to network congestions or any other factors. To make things better, the industry went ahead and made the user himself as an authenticating factor with the following emerging authentication technologies.

Facial Recognition
“A facial recognition system is a computer application capable of identifying or verifying a person from a digital image or a video frame from a video source,” cites Wikipedia. Facial Recognition algorithms have evolved a long way, from just analysing the space between facial organs to analysing the 3D contour of the face. As most of the smartphones are equipped with both front and rear cameras, the same technology is being used for authenticating the users. All the user has to do is take a selfie and log into their banking application. How cool is that!?


Biometric Authentication
In the current context, Biometric Authentication refers to authenticating users using their unique natural characteristics such as their fingerprints and retina. The Fingerprint and Iris scanners have been in the market for a long time as standalone devices. But, with the advancement in technology, these scanners are now embedded in smartphones also. Most of the recent smartphones come with a fingerprint sensor and a very few with retina scanners as well. So, it becomes easy to authenticate users into their mobile banking application using just their fingerprints and eyes.


Behavioural Biometrics
In Behavioural Biometrics, the usual interaction of the user is profiled in the system. The users are profiled based on multiple parameters such as keystrokes and navigation patterns. When the usage pattern of the user deviates from their usual profiled pattern, the system is alerted of an anomaly. Usually, behaviour biometrics is not used to authenticate users into the system, but rather to monitor while they are interacting and transacting in the system.


Having the above technologies as additional authenticating factors not only strengthens the security of the mobile banking application but also improves the User Experience. Adapting these new technologies also acts as a product differentiator.

To Be Continued…

About Market Simplified: Market Simplified is a thought leader in handcrafting custom solutions by continuously innovating and simplifying finance. We have maximized the revenues of industry leaders like OptionsXpress (Charles Schwab), Currenex (State Street), MB Trading, Maybank Kim Eng, Kotak Mahindra Bank and National Stock Exchange of India by providing enhanced and sustained user engagement through Experience Engineering.

About The Author: Gokoulane Ravi is a foodie, technology enthusiast and a developer turned marketer with more than 5 years of experience in the space of mobility. When he is not working, he likes to read, write, run and cycle.

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