Latest guest post by Eve Tyler, (see also last week’s piece on ‘The Ultimate FinFech Unicorns’) from Misys.com, aiming to to transform the global financial services industry, through making financial institutions more resilient, efficient and competitive, see here. Title image : Flickr Creative Commons
Banking technology has advanced with leaps and bounds over the last few years, so much so that the idea of actually visiting a brick-and-mortar bank branch seems rather quaint. Everything that we once had to do with the help of a bank teller – withdraw money, deposit a cheque, make a transfer – we can do ourselves: first with our desktop computers, then our laptops and now our smartphones.
Having this relatively easy access to our accounts whenever we need them is extremely convenient; however, it raises new issues of security. Having a two-step authentication system – like inputting a password in addition to answering a personal security question – is pretty much standard practice now, and many banks are moving towards biometric data (like fingerprint scanning) to keep data safe. But is this new era of banking as secure as we hope it is?
A brief timeline – how did we get here?
Ever since the internet exploded on the scene in the late 80s/early 90s, banks realised they had a perfect opportunity to expand their services and strengthen their customer base. They’ve been trying to keep up with the steady stream of advancements ever since.
The first online banks hit the scene in 1983: in the US, Citibank, Chase Manhattan, Chemical and Manufacturers Hanover all introduced home banking services (like keeping electronic checkbook registers and reviewing account balances). That same year, Bank of Scotland set up Homelink, the UK’s first online banking service, for customers of the Nottingham Building Society. Homelink allowed users to view statements, transfer money between accounts, pay bills and set up loans online; not long after interactive banking became the industry standard.
Then came smartphones, and suddenly customers wanted to bank from the convenience of their mobile. The early 2010s saw the introduction of banking apps – for example, Barclays launched their mobile banking app as well as Pingit, the UK’s first service for sending and receiving money person-to-person using mobile numbers.
CACI International Inc. and the British Bankers’ Association (BBA) recently published their report ‘The Way We Bank Now: World of Change’, which analyses the way we move and manage our money. They found a number of interesting facts that demonstrate how mobile banking is dominating the industry, such as:
Customers moved £2.9 billion a week using banking apps in 2015 – up from £2 billion in 2014.
As of March 2015, UK customers downloaded banking apps on 22.9 million occasions (that’s an 8.2 million increase in just one year).
By 2020, customers will use their mobile to manage their current account 2.3 billion times – more than internet, branch and telephone banking put together.
While this new age of digital banking means easier, more convenient banking for all, it also raises issues of security and cybercrime: how protected is our information? It seems as though there’s always a headline about a cyberattack on banks: just last year a gang of Russian-based hackers stole around £650 million from British banks using highly-sophisticated (and completely illegal) software, making the theft the largest cybercrime to date.
Introducing biometric protection
Image source: Flickr Creative Commons
As our personal information gets closer and closer to us – to the point where it’s sitting in the palm of our hand – how do we keep it safe? How do we prevent a breach, hack or other cybercrime? It starts with re-evaluating the use of passwords, because traditional passwords clearly can’t keep up with our ever-evolving digital lives.
FinTech news hub FusionWire (powered by Misys) published an article in November called ‘Are you the password of the future?’ which tackles this topic, arguing that typical eight-character passwords are on the way out. Geoff Anderson, co-founder and COO of cyber security startup PixelPin, says within the piece: “[Standard] passwords assume that humans are able to remember long, complex character strings. But we have more and more accounts that are important to day-to-day living, and it’s become a problem. Maybe ten years ago it was fine, when you just logged into a couple of accounts, but now it’s out of control.”
This is where biometric data comes in. Banking giants in the US and the UK are adopting fingerprint recognition technology in order to keep their customers safe: NatWest, the Royal Bank of Scotland and Bank of America are just a few banks allowing their customers to access their accounts via mobile with Apple’s Touch ID fingerprint sensor.
Image source: Flickr Creative Commons
However, security experts are already concerned that Touch ID isn’t safe enough, and for good reason. A team of biometric hackers successfully broke into Apple’s Touch ID in a single day using a fake finger they created from a photo of a fingerprint. It’s clear that this isn’t enough to keep our information truly protected.
What the future holds….
Of course, there’s no real way to tell, but we can already get a sense of the way the wind is blowing. Despite the concerns biometric security brings, it offers a more advanced solution to keeping our information safe. In addition to fingerprint technology – which is still more secure than your standard password with numbers and symbols – banks are experimenting with voice-recognition security and even selfies as passwords. Banking is about to get biometric.
— Misys (@MisysFS) February 26, 2016
Article by Eve Tyler, writer for Misys