In my previous blog post, I discussed the differences between a static and dynamic approach to leveraging biometrics for fraud detection. The second part of this blog series will focus on behavioral biometrics, a form of dynamic biometrics that many financial institutions have adopted in recent years to drive continuous protection and banish friction in digital channels.

In the last two decades, the use of biometric security applications has catapulted alongside digital innovation. This is due in large part to digital transformation in traditional industries, identity-based functions shifting to mobile applications, and a  steep rise in fraud and identity theft in new digital channels.

According to forecasts by Acuity Market Intelligence, 98% of all smart mobile devices in use will be biometrically enabled. Moreover, Accuity’s research has stated that more than 16.7 billion biometric apps will be downloaded annually, and more than 1.37 trillion transactions, that require some level of biometric authentication, will be processed on mobile devices each year.

Financial institutions regularly use device identity for fraud prevention and to authenticate users at login. It is one of many controls that can be used to safeguard online interactions. But as with other security tools that rely on static measures, cybercriminals are finding ways to circumvent device ID. Taking over user accounts is one of the largest tactics, and in 2019 alone, account takeover fraud cost U.S. businesses nearly $7 billion in losses. Secondly, financial institutions are experiencing significant rates of fraud in the account opening process and have difficulty accurately separating genuine applicants from cybercriminals. Because new customers have never been seen before, their devices haven’t either, making device identity unhelpful for account opening protection.

Consumer demand for more digital products and services is the driving force behind the rapid digital transformation for many financial institutions. This is especially true for account opening, with 37% of consumers, and more than half of millennials, citing digital channels as their preference for opening a new account.

Behavioral biometrics has evolved profoundly in the last decade.  What started as the analysis of user behavior based on clicks, swipes and typing patterns has developed into a technology that relies on deep knowledge of neuroscience and cognitive analysis that ventures into the unchartered areas of the human mind. 

The gig economy has exploded, especially in the wake of the COVID-19 pandemic. According to the Bureau of Labor projections, the portion of gig economy workers will increase to 43% in 2020. Among millennials, 40% have identified as participating in the gig economy.