Biometric authentication has been threatening to take the banking and payments world by storm for several years now. So much so it is part of our everyday lives – for instance, when using digital wallets such as Apple Pay, face ID and fingerprint scanning are the prominent methods of authentication. Despite this, biometrics have not featured heavily in traditional banking services, but as Covid-19 and regulations accelerate the move to digital this looks set to change. Evie Rusman reports

One trend that seems to be making headway is the use of facial recognition for services including ATM withdrawals. Earlier this month, Spain’s CaixaBank launched the nationwide deployment of ATMs with facial recognition technology. Could this be a new trend to watch for?

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According to the bank, it is the first system launched by a financial institution on a global level that allows users to withdraw money by simply recognising them from the image captured by the terminal’s camera, meaning they do not have to manually enter their PIN.

Speaking on the new initiative, Gonzalo Gortázar, CaixaBank CEO, says: “CaixaBank works with an innovation model in which technology is at the service of the best customer experience. We work to constantly evolve towards new needs and habits and, within the current financial context, security and agility are key across all transactions, and the incorporation of biometric technology at ATMs offers many benefits in these two areas.

“In the current context of Covid-19, this project is particularly relevant given that it enables us to reduce the physical contact of customers with ATM surfaces. This measure comes in addition to using contactless cards, which contributes to promote safe terminal use.”

Capgemini research

Adding to this, research from Capgemini shows that during Covid-19 77% of consumers expect to increase their use of touchless technologies to avoid interactions that require physical contact.

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In addition, more consumers are accepting of facial recognition as 52% said they prefer facial recognition for authentication at retail stores, banks, airports, and offices during the current scenario. However, this falls to 39% in post-pandemic times. Capgemini suggests this drop might be due to privacy concerns and encourages banks to address this to keep consumer attitudes strong.

Examples of facial recognition technology being applied to current systems include:

  • In retail, China-based JD.com’s self-service shops give access to customers using facial recognition
  • In 2016, Mastercard launched its “Selfie Pay” app, allowing customers to pay by displaying their face to their smartphone cameras
  • Recently, China’s WeChat Pay rolled out its “Frog Pro” POS device. Using 3D cameras, this can scan customers’ faces to make payments at retail checkout counters

The report also highlights that several technology companies are now working on enhanced versions of facial recognition that can help accurately identify individuals even when they are wearing masks. China-based Hanwang Technologies, for instance, has devised a system that can identify mask-wearers with 95% accuracy.

Privacy remains an issue

When it comes to facial recognition, one of the main concerns is privacy and is something that banks and payments companies alike have been grappling with for a number of years.

Capgemini research from 2018 found that 66% of consumers would like to be made aware when companies are enabling interactions via AI, including contactless features such as facial recognition. And in 2019, the company found that 59% would avoid a retail store if it used facial recognition to identify them. This may pose an issue when it comes to using facial identification methods in everyday transactions.

In order to combat this, Capgemini suggests retailers should:

  • Be transparent and acquire consent from consumers. The company argues that consumer perception towards face recognition technology will only improve with transparent data-handling. The core of transparency is the practice of acquiring consent from the consumers before collecting and using their personal data. According to Capgemini, consent should be a fully transparent process with the consumer being given every detail of what will be collected and for what purpose, which third-party firms the data would be shared with, and where and how long the data will be stored.
  • Offer consumers a sense of control over their choices. Capgemini advises that companies should offer consumers a choice between adopting facial technology and other traditional forms of authentication, checkout, and payment. This approach can help further dispel concerns about potential data malpractices and give them a sense of control over the experience. Capgemini’s 2019 retail research found that a majority (71%) of consumers want retailers to provide an “opt-out” option to allow them to not use automation technologies.
  • Offer consumers an avenue for value exchange. The company also argues that companies should actively seek to inform and educate the consumers regarding the benefits of using facial recognition in light of the pandemic.