CarderPlanet
Professional
Introduction
Password-less systems are systems that allow users to identify themselves and access various services without having to enter passwords or other sensitive data. Passwordless systems rely on biometric, behavioral, or contextual factors that are unique to each user and difficult to fake.Password-free systems are very important in fintech, as they increase the level of security, convenience and trust when conducting financial transactions. According to a Juniper Research report, by 2025, more than 1.1 billion users will use passwordless systems to access their bank accounts, which will account for about 57% of the total number of users of banking services.
The purpose of this article is to look at how banks and startups implement password - free systems in their products and services, what advantages and disadvantages they have, what problems and challenges they face, and what development prospects they have in the future.
Overview of passwordless systems in fintech
The main types of passwordless systems that are used in fintech can be divided into three categories::- Biometric systems are systems that identify a user by their physical or behavioral characteristics, such as fingerprints, face, voice, or handwriting recognition. Examples of such systems are Apple Face ID, Samsung Iris Scan, or Mastercard Identity Check.
- Behavioral systems are systems that analyze the user's behavior when using the service, such as the speed of keystrokes, mouse movements, location, or time of day. Examples of such systems are BehavioSec, BioConnect, or NuData Security.
- Contextual systems are systems that take into account additional factors of the user's environment when authenticating, such as device type, IP address, network, or geolocation. Examples of such systems are Google Smart Lock, Microsoft Windows Hello, or FIDO Alliance.
The advantages of using passwordless systems in fintech are:
- Improved security-Passwordless systems reduce the risk of password theft or leakage, and protect against phishing, brute force, or replay attacks.
- Improved usability-Passwordless systems speed up and simplify the user authentication process, eliminating the need to remember or enter passwords.
- Increase trust-passwordless systems increase the user's trust in the service, as they feel that their personal data is protected and respected.
The disadvantages of using passwordless systems in fintech are:
- High cost-passwordless systems require significant investment in development, testing, and support, as well as compatibility with various devices and platforms.
- Low availability-passwordless systems may not be available or effective in some situations, such as poor lighting, noise, poor Internet quality, or the absence of certain sensors on the user's device.
- Low acceptance-passwordless systems may face insufficient acceptance from users or regulators, who may be distrustful or unaware of the benefits and risks of such systems.
The role of passwordless systems in modern banking
Banks are among the main implementers of passwordless systems in fintech, as they strive to increase the level of security, convenience and trust in the provision of their services. Some examples and cases of using password-free systems in banks:- HSBC-British bank HSBC has implemented a Voice ID system that allows customers to identify themselves by voice when calling a contact center. The system analyzes more than 100 parameters of the client's voice, such as key, speed, accent, and pronunciation. The Voice ID system has reduced customer authentication time by 15% and also prevented fraud worth more than 400 million pounds since its launch in 2016.
- BBVA-Spanish bank BBVA has launched the Veridas system, which allows customers to open accounts online using facial recognition. The Veridas system uses artificial intelligence technology to compare a customer's selfie with their ID document. The Veridas system increased customer conversion by 40%, and also reduced the account opening time to 10 minutes.
- USAA-An American bank, USAA was one of the first banks to offer its customers the ability to use fingerprints, face recognition, or voice recognition to access their mobile app. USAA Bank collaborated with Daon, which developed the IdentityX platform, which integrates various types of biometric authentication. More than 2 million USAA customers have activated password-free access to their app.
The prospects for using password-free systems in banks depend on several factors, such as:
- Technology development - continuous improvement of the quality, speed and accuracy of passwordless systems, as well as expansion of their functionality and capabilities.
- User Demand - The growing desire of users to have easier, faster, and more secure access to their financial data and services.
- Regulation - compliance with the requirements and standards of regulators to ensure the security, confidentiality and ownership of user data.
- Competition - differentiation from other banks and fintech companies in terms of the level of innovation, quality and convenience of services provided.
Introduction of passwordless systems by startups
Startups also actively use passwordless systems in their products and services, showing innovations and breakthroughs in the field of fintech. Some examples and cases of using passwordless systems by startups:- Nok Nok Labs-American startup Nok Nok Labs has developed the S3 Authentication Suite platform, which allows companies to easily integrate various types of password-free authentication into their applications and websites. The S3 Authentication Suite platform supports the FIDO (Fast Identity Online) standard, which is an international standard for passwordless authentication. Among the clients of Nok Nok Labs are companies such as PayPal, SoftBank, Samsung or Lenovo.
- HYPR-the American startup HYPR has developed the HYPR Cloud Platform, which allows companies to transfer their users to completely password-free authentication. The HYPR Cloud Platform uses a decentralized biometrics technology that stores the user's biometric data on their device, rather than on the company's server. This increases the security and confidentiality of user data, as well as reduces the cost of password support. HYPR's clients include companies such as Mastercard, T-Mobile, or Rakuten.
- Zighra-Canadian startup Zighra has developed the SensifyID platform, which allows businesses to use behavioral biometrics to authenticate their users. The SensifyID platform analyzes micro-patterns of user behavior when using the service, such as mouse movements, keystrokes, or on-screen gestures. The SensifyID platform is trained on the basis of machine learning and neural networks, adapting to changes in user behavior. Zighra's clients include companies such as TD Bank, Scotiabank, or Equifax.
Problems and challenges in implementing passwordless systems
When implementing password-free systems in fintech, both banks and startups have to face various problems and challenges that may hinder or hinder the successful implementation of such systems. Some of these issues and challenges are:- Security concerns - Although passwordless systems increase security compared to passwords, they are not completely secure and can be subject to various types of attacks, such as biometric data forgery, copying behavioral patterns, or manipulating contextual factors. In addition, password-less systems can create new vulnerabilities or risks for users ' data, such as unauthorized access to biometric data, violation of privacy, or loss of control over their digital identity.
- Privacy Concerns-Passwordless systems require the collection, storage, and processing of large amounts of users ' personal data, such as fingerprints, faces, voices, or behaviors. This may raise concerns among users about how this data is used, who owns it, who has access to it, and how it is protected. In addition, password-less systems may violate users ' rights and freedoms, such as the right to anonymity, the right to be forgotten, or the right to consent.
- Technical and organizational challenges-Passwordless systems are complex and dynamic technologies that require a high level of expertise, resources, and support for their development, testing, and maintenance. In addition, passwordless systems require changes in organizational processes, culture, and policies to implement them, as well as coordination with various stakeholders, such as users, regulators, partners, or competitors.
Prospects for the development of password-less systems in fintech
Password-free systems in fintech have great prospects for development in the future, as they meet the growing needs and expectations of users, companies and regulators in the field of security, convenience and trust in financial transactions. Some of the forecasts and trends for the future:- Expanding applications-Passwordless systems will increasingly be used not only for user authentication, but also for other purposes, such as identity verification, transaction authorization, document signing, or access control.
- Quality Improvement-Passwordless systems will increasingly improve their quality, speed, and accuracy, as well as expand their functionality and capabilities. For example, there will be new types of biometric authentication, such as handwriting or DNA recognition, or new types of behavioral authentication, such as emotion or personality trait analysis.
- Technology Integration-Passwordless systems will increasingly integrate with other technologies such as blockchain, artificial intelligence, or the Internet of Things. This will allow you to create more reliable, smart, and versatile solutions for password-less authentication.
- Possible impact on the development of financial services and user experience-passwordless systems can have a significant impact on the development of financial services and user experience, as they can contribute to the emergence of new business models, products and services, as well as increase the level of user loyalty and satisfaction.
