Improving Customers’ Experience at Banks using Biometric Technology

While a small number of banks still prefer physical banking for both identification and financial transactions, the majority of today’s onboarding process can take place without either the customer or the banker having to physically interact. Through modern technologies such as biometrics, artificial intelligence and connected databases, customers' banking experience have become faster and more convenient.

With 61% of customers claiming that they are more likely to use contactless transactions and expect contactless experiences. The demands that customers are making are clear. They expect exemplary customer experience. Where possible they want to minimise physical interactions and quick results.

The question is, is this possible to be done safely?

Unlike other sectors, the data and information passed between the customer and the bank are very sensitive. With the Know-Your-Customer (KYC) regulations that banks have to follow and the sensitive customer information customers give to banks, both

financial and personal data must be safe. Especially during the onboarding process.

Between the years 2018 and 2022, financial data breaches accounted for 153.3 million leaked records. Increasingly, bad actors are hacking and accessing customers' data. Banks can prevent customers' data from being hacked via the use of biometric authentication. Because each specific customer's biometric makeup is unique to them as a person, it will be very hard for hackers to be able to access customers' data. So, if a bank requires a thumbprint scanner, to access data, due to each individual's biometric makeup, their encrypted data will be hard for hackers to access.

We all know that one aspect of providing a good customer experience for banking customers is making sure that the customers' data is kept safe. However, with society becoming used to frictionally experiences can banks afford not to have contactless experiences?

The COVID-19 pandemic changed the mindset of people across the world. Where previously people wouldn’t mind physical interactions, people have become accustomed to contactless experiences due to imposed lockdowns and the advancements made in technology. The financial sector especially has seen an increase in customers reverting and wanting contactless experiences. A study by NCR found that 70% of their participants increased their use of digital banking. They also stated it as their preferred way of banking.

Now more than ever customers preferred way of banking is contactless. This contactless

experience can be achieved by having an onboarding process that is digital which then enables online banking to take place. Having an onboarding system in the same app as the banking platforms offers the customer ease and simplicity. As a result, the enrolling process is as easy as installing an app and completing an online form, the customer will not only feel more in control of their banking experience but will potentially feel less pressure than physical banking. There is less of a need to cultivate interpersonal relationships. The customer’s experience is less based on the training or disposition of a banking relationship manager.

As with most things in life, it comes at a cost and contactless technology is no different. Yet still, the question has to be asked, are their banking institutions investing in this?

Much has been made about the cost of investing in technology. In an economic climate where the cost of living is rising for all and inflation is predicted to steadily increase no bank can afford to be wasting money. Still, in the long run, investing in contactless technology has its financial benefits.

Traditional banking, whether it’s onboarding or physical transaction of money is driven by manpower and this requires specialists to be paid. Even in a system with an online banking portal, human specialists are needed to process and verify the information gathered. This can be costly not only in wages but also in training and upskilling when legal or regulatory changes happen in the industry.

Process such as digital onboarding which is automated so that much of the ongoing human cost is mitigated, to the degree that the need for human interaction is eliminated.

Even though technology is becoming more advanced, a small fraction of banks are still refusing to embrace contactless technology. Could the decision of banks to not implement contactless technology, affect their future?

Banking today is different from what it was in previous decades. Where previously you may have been able to have multiple opportunities to make a good impression on the customer, you only have one now. As like in other sectors, contactless technology that helps enhance security and create better seamless experiences are paramount.

Biometric authentication technology such as faceless identification, voice recognition and fingerprint ID can do this. Allowing customers to bank, without physically being in the bank is the future of banking as we know it.

Andre Stewart, VP of EMEA Incode