Money is no longer the ‘crucial’ resource in a transaction, says Dave Birch – so what is? As customers gain greater control of their data and identity, how can financial institutions embrace technology to drive a digital transformation and create a seamless, integrated, and simplified digital payment ecosystem?
FaceApp, the viral sensation that turns your innocent selfie into a terrifyingly believable image of you in 30 years’ time, hit the headlines for its terms of service. Millions of us downloaded the app without noticing that we had just signed over perpetual and irrevocable rights to the app-generated photos of our own face.
Just a bit of fun, right? Or maybe not. As financial services companies increasingly turn to biometric data for security, you may want to guard your image as closely as your great‐grandparents guarded the key to their safe.
According to David Birch, author, advisor, and commentator on digital financial services, “Most of my wealth is not money in the bank. What’s in the bank is identity. The crucial resource that I want the bank to look after and care for is identity.”
As safe as a bank? Not necessarily
The digital era is making our relationship with money more complicated and, at the same time, easier. “Money” is fast moving beyond the physical to a string of code in cyberspace. But financial services companies are struggling to keep up with biometrics security.
Such outdated processes are hampering the development of today’s digital ecosystem. Time-consuming, manual applications are being rejected by time-poor, digital natives. Around a quarter (24%) of young adults say that they spend more time managing their finances than they want to, according to “Futureproof,” a research study from Open Banking platform, Bud.
Regulatory initiatives are the antidote. Examples include Open Banking, which requires major UK banks to provide data access to other licensed companies, and PSD2, which enhances security through two-factor identity authentication. The financial world is not only digital, but mobile, cross-border, and omnichannel.
The world is reaching for digital wallets
Today’s payment providers need to provide systems that work anywhere, on any device
Today’s payment providers need to be able to provide systems that work anywhere, on anything. Mobile commerce is the dominant factor driving strong digital commerce growth, according the Juniper Research report on Digital Commerce.1 The report forecasts that mobile commerce will account for 77% of global digital commerce sales by 2023, from 70% today.
However, that figure hides many variations. The global contactless transaction volume via smartphones is significantly higher than previously estimated by Juniper Research: it’s predicted to reach 52 billion by 2023. As of today, more than half of these contactless mobile retail transactions occur in the Asia-Pacific region.
Looking at the highly convenient use of digital wallets for in-person spending, already 40% are carried out via mobile digital wallets in China, with strong adoption showing in the US, according to the consultant McKinsey’s report, Global Payments 2018.2
The sheer variety of alternative payment methods is astonishing (McKinsey identifies 140) – and is damaging to security. With numerous individual identity solutions, most of us end up frustrated and confused.
Beefing up biometric security
Biometric security, such as the contactless cards with integrated fingerprint readers, currently being piloted by French banking group Crédit Agricole in partnership with G+D Mobile Security, is a safer bet.
“The biometric card aims to perfectly meet the needs of our customers by combining perfectly ease of use and security,” says Bertrand Chevallier, Chief Executive Officer of Crédit Agricole Payment Services.
Such a biometrics security solution is a key example of how technological innovation can be used to enhance both consumer experience and security. Another is the digital wallet, such as G+D’s CONVEGO® © hub, which integrates online transactions with a mobile payment process.
Gabrielle Bugat, Head of Division for Financial Solutions at G+D Mobile Security, says: “The transaction is done is a very secure and very safe way.”
When it comes to our financial future in this increasing world of biometrics, we all need to be sure that our face is only our fortune – and not a means of access to our fortune.