Top Practices For Fintech Users Authentication

When you transact online, you want to share the data that identifies you and is relevant to the transaction. If everything about you was out in the open, criminal elements could easily access and steal your sensitive data and money. Fintech firms are innovating user authentication tools of growing complexity to identify and shield online services users from cybercriminals securely.  

A Paradigm Shift In User Authentication Technology Enhances User Safety And Security 

You thrill in creating a unique password known only to you and then despair in forgetting it. A hacker could steal the password and make you vulnerable to data theft and financial loss. 

Fintech firms, realizing the limitations of passwords (what you know), are moving to mobile devices (things you have) so you can receive and respond to an OTP message. 

However, OTP message transmission depends on the availability of a net connection, and your device in the wrong hands could compromise your security even more.                             

A revolution was in the making with the adoption of a user authentication tool growing in sophistication. Biometrics maps facial features, voice, or fingerprints, recording and analyzing physical and behavioral patterns unique to the user, which scammers cannot compromise.

5 Fundamental Factors Drive The Evolution Of Fintech User Authentication Tools

  • Businesses have to protect their reputation, which hinges on users’ trust in transactional safety and security.
  • The fear of identity theft negatively impacts consumer psychology and financial well-being.
  • Financial losses through online fraud and cyber criminality are forcing companies to tighten transactional security.
  • Know Your Customer guidelines are mandatory for identifying users and for blocking fake accounts and fraudulent transactions.
  • International pressure is building on the financial sector to deny oxygen to money laundering,  narcotics trading, and terrorist funding.

Users Authentication Best Practices Boosting Confidence, Convenience, And Transactional Speed 

Every transaction must fulfill two critical goals – the safety of the organization hosting the transaction and the security of the user initiating the transaction.  

The company providing the users’ authentication tool must meet three equally essential goals – guarantee high security, ensure faster completion speeds, and be inclusive to a large customer base.

Leading authentication experts from  Passbase Identity verification services & solutions opine that six considerations dictate the best practices for innovating users’ authentication tools. 

Privacy protection is the fulcrum of users authentication models 

The human-to-machine channeling of transaction-relevant information should be safe enough to deter cybercriminals from entering the user’s private domain. 

High-risk transactions demand foolproof protection protocols 

Transactions carrying the highest risk, like channeling mercantile payments through banks,  allowing beneficiaries to withdraw government funds, and facilitating funds transfer between users, demand top security classification. 

Practicality and inclusiveness are essential to the authentication process 

User authentication should not be so complex that it prompts people to save passwords or switch to alternatives that compromise safety. The aim is to simplify authentication to make the process inclusive and effortless.

High levels of assurance (LOAs) are necessary to inculcate trust in the authentication process

You cannot simplify the authentication process to the point that users hesitate to conduct high-value transactions. Service providers also need assurance that authentication validates the transaction and the genuineness of the user’s identity. 

User convenience is just as crucial as a high-security authentication process

Whether the authentication is on-premise or remote, convenience is of paramount importance. Users need devices and apps to be accessible 24/7, with speed and convenience determining how users avail or reject services. 

For example, if payment via the laptop makes you reach for the mobile for an OTP, that’s annoying and inconvenient. 

Businesses lose heavily when user authentication is cumbersome and repetitive

The authentication rate (percentage of successful transactions) plays a crucial role in retaining users online and completing payments. If authentication is excessively instructional and needs multiple attempts to succeed, users lose interest in transacting, and service providers lose businesses. 

Authentication complexity is the primary reason why users abandon baskets and fail to return to retailers. 

4 Top Fintech User Authentication Models That Score High In Best Practices

Authentication services that operate smoothly on the wheels of convenience and high-level security are more likely to prevent business attrition for service providers. 

  1. Biometrics: The New-Age Authentication Tool Revolutionizing Digital Identification

Biometrics operates on the principle that what you know (passwords) and what you have (devices) can be stolen, but what you own (your physical features) are unique to you and can’t compromise your safety. 

What favors facial, fingerprint, retinal Biometrics

Facial features scan, fingerprint scan, and retinal (eye) scans are unique but become impenetrably stronger when combined with other authentication protocols. 

Biometrics work onsite for granting permissions to enter buildings and to access secure devices and sensitive areas.  It’s also possible for remote biometric verification to become a prerequisite for accessing government funding and receiving direct welfare benefits.  

The process is convenient, simple, fast, non-intrusive, and user-friendly, and doesn’t rely on passwords and PINs or mobile devices. 

Privacy concerns of Biometrics

The biometrics database is an invaluable asset that becomes irreplaceable if hacked, and the ramification for users’ privacy is enormous. Governments and businesses are sparing no effort in building robust security perimeters around biometric databases.

Orwellian scenarios and suspicions of tracking and surveillance are generally unfair to modern authentication protocols and prone to exaggeration.  Fintechs are evolving and executing protocols that offer impenetrable security to Biometric data.

  1. Behavioral Biometric Authentication: The Algorithm Authenticating User-Device-Interaction

The bane of password authentication is the complex combination of letters, figures, and symbols. Users would forget or jot down the passwords, thereby compromising safety. 

Fintechs quickly comprehend that metrics that measure the user’s behavior relating to the device eliminate the need for passwords and pins.

The way we hold the device, the pressure we apply on the keypad, how we swipe a screen, keyboard shortcuts we love – such behaviors leave digital footprints and trails that seldom fail to identify the same user in the next interaction. 

What favors Behavioral Biometrics

It works in the background and doesn’t slow down or interfere with the user’s interaction with the device. Because various metrics are in play, the user identification is near perfect, and impersonation is impossible. Behavioral mapping provides strong protection against hacking, identity theft, and account cloning.  

Privacy concerns of Behavioral Biometrics

Who collects such data, how they store it, and who has access to it are moot questions that reflect privacy concerns.  

The online banking sector, e-commerce retailers, popular payment gateways, and sensitive defense security organizations are perfecting and evolving security protocols that powerfully firewall data against theft and fraud. 

  1. Voice Biometric Authentication: Where Speech Becomes The Unique Biological Identifying Factor

The user’s unique speech pattern embeds a template in the user device by getting a user to repeat a phrase verbally. The voice mapping and speech authentication process are fast, and no other input is necessary. 

A call center, mobile application, chatbot, or IoT device analyzes and matches the user’s current voice recording with the mobile database and confirms user identity. 

What favors voice recognition Biometrics

Voice biometrics is a significant security upgrade that betters passwords and PINs in user convenience. The user shifts from a problematic what you know (password/PIN) to what you own (unique voice), delivering a satisfying user experience.  

Privacy concerns of voice recognition Biometrics

Artificial intelligence (AI) and Machine Learning algorithms are capable of spoofing voice samples. Fintechs are responding by developing more robust safeguards capable of distinguishing a machine recording from a live voice. 

  1. The 2d Matrix Quick Response (QR)  Code: An Exemplary Marketing And Payments Tool

Pointing a mobile camera scans the QR code, which opens a push notification in the mobile.  The user verifies the payment particulars on-screen and finishes the payment. The confirmation of user or vendor identity is instantaneous, and the payment clears the validation process.

Payments can work through the mobile scanning the business’s QR code or the company scanning the mobile’s QR code. It is also possible for apps to exchange QR codes to identify users and vendors and secure payments. 

What favors QR codes

The mobile device captures the QR code and decodes the information profile of the vendor. No password or PIN is necessary, and the service provider only displays the QR code unique to his brand. No hardware comes into play – the safety and security increase when 2-factor authentication (2FA) works with QR codes.  

What disadvantages QR codes

QR code reading depends on smartphones having functioning cameras, and there is the momentary discomfort of aiming the camera to position the code on the screen. With its insistence on contactless payments, the pandemic has given a new lease of life to QR codes.  

Conclusion

Moving above and beyond the password and PIN era, new-age Fintech’s are bringing increasing sophistication to authentication modeling that toughens security features while improving convenience, enhancing privacy, and ensuring the inclusivity of users. 

Organizations and individuals needing access to secure authentication tools that dovetail the best practices in the industry can confidently turn to reputable fintech firms specializing in authentication security to deliver a safe, secure, and satisfying user experience in online transactions. 

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