Financial Transaction Security – PSD2 to Accelerate the Use of Biometrics
By Anthony Eaton, Chief Technology Officer at IDEX Biometrics
In the 2nd blog post in our series on PSD2, Anthony Eaton, Chief Technology Officer at IDEX Biometrics explains how PSD2 will accelerate the use of biometrics.
Technology continues to change industries around the world, and the second payment Services Directive, otherwise known as PSD2, is set to change the way European countries and consumers handle their finances. This updated directive allows consumers and companies to manage their money through third-party entities rather than banks, dramatically opening up the financial services ecosystem. ThisOpen Banking approach necessitates an increase in security, and this is where biometric authentication technology comes in handy. In a market flush with new entrants providing new services, tying your finances to your physical person could very well be the safest approach.
A Technological Sprint: Innovative Alternatives to Traditional Banking
For a long time, banks have held all the cards when it comes to managing consumers’ finances. While this has made for a consistent service offering, it has limited the introduction of new technologies. Thanks to PSD2 however, the “gatekeeper” role of banks will be removed; new entrants will offer fresh and innovative banking services that embrace new technologies.
The beauty of opening up the financial services market in this way is the competitive rivalries that will emerge; banks and third-party service providers alike will want to be as up-to-date as possible, driving their advantage through innovation and new technology.
A Transaction Only You Could Make: Biometric Signing Ensures Safety
With the advent of an open financial services market, a plethora of unique and fresh transaction models is inevitably going to erupt. This means there will be new ways to spend and manage your money. While these will strive to be as frictionless as possible, consumers will want to be as secure as possible when making purchases or completing financial transactions.
This requires more secure means of payment and identification, and that’s where biometric authentication technology proves useful. Tech companies have already developed cards and systems that only respond to personalized biometric signatures, typically in the form of fingerprints. The fingerprint is uniquely personal, and only the individual who owns the card or device intended for a transaction may authorize that transaction. In a world that is moving toward more varied and free financial markets, security is crucial, and biometrics will help make identity theft and financial fraud problems of the past.
The Financial Future Must Be Convenient and Secure
While the ways we conduct business and buying will change for the better, it is clear the need for increasing security will remain. In a world where money changes hands faster than ever and across complex technological avenues biometric authentication technology will help to keep your money exactly where you want it to be.
The previous post in our series on PSD2 looked at how fingerprint biometrics can build strong customer engagement post PSD2.