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Growing password-safety skepticism highlights banking biometrics: report

Most United States users of mobile banking applications no longer see passwords and usernames as secure and want devices to recognize them instead through fingerprint, voiceprint and other biometrics, according to a Telstra report.

The report, “Mobile Identity – The Fusion of Financial Services, Mobile and Identity,” found that about 25 percent of U.S. consumers would share their DNA with their bank to secure financial and personal information. The findings show how the growth in younger consumers using smartphones to access and manage finances has ratcheted up the pressure on banks to cater to the growing appeal of biometric identification technology.

“As trust builds that mobile is a secure extension of the online banking experience, it is no surprise that younger consumers are willing to provide the baseline biometric verification tools the banks need,” said Wilson Kerr, vice president for business development and sales with Unbound Commerce, Boston. “Humans are unique and biometrics are faster to use, and far more secure than passwords.

“Apple has proven this and biometric fingerprint ID verification is now the standard way consumers access banking apps on the iPhone6, for example,” he said.

Reducing fraud
The look by Telstra, an Australian telecommunications and information services company, into how the smartphone affects the consumer’s relationship with his or her financial institutions, determined that about 66 percent of U.S. consumers think that using biometrics such as voice, fingerprint, iris and facial recognition would be more secure than usernames or passwords and help reduce risk of fraud.

USAA gets high customer satisfaction marks.

While factors such as interest rates and ease of accessing funds used to be the most important considerations when selecting a financial institution, today, more than half of U.S. consumers cite the security of their finances and personal information as their top priority, together with their institutions’ reputation for security.

Less than half of U.S. consumers were very satisfied with their institutions’ authentication methods, with one-third willing to pay an extra $17 per annum for more sophisticated mobile security measures, according to the report.

In the U.S., customers of the United Services Automobile Association, a Texas-based Fortune 500 diversified financial services group of companies, were the most satisfied with the identity and authentication methods offered and are accordingly the most likely to recommend them.

The research included a survey on attitudes toward identity and security with financial services institutions and customers from 318 executives across Asia Pacific, Europe and America.

It also included a seven-nation quantitative study of 4,272 Gen X and Gen Y consumers in Australia, Singapore, Malaysia, Indonesia, Hong Kong, the United Kingdom and the U.S.

The findings come as a wave of strategic moves roll across the mobile payments ecosystem started by Apple Pay’s launch in October.

Banks are stepping up efforts to make the mobile experience secure as research shows security remains one of the biggest hurdles to driving mobile payments adoption.

Early this month, Chase moved to meet consumer demands for streamlined security features while offering faster, more convenient banking service by enhancing its mobile application with Touch ID authentication for iPhones 5, 6 and 6 Plus.

Swiping finger
Last month, Mountain America Credit Union took steps to safeguard data on smartphones by announcing it would let users of its mobile application log in by swiping a finger or use a phone’s camera to image unique eye patterns.

Bank services for smartphone users reflect impact of mobile payments movement. 

“The most common password chosen by people is 123456 and the second-most-common is Password,” Mr. Kerr said. “It’s no wonder that biometrics have taken off.

“Each person is unique and accessing their money via mobile is a very personal thing,” he said. “If this requires the initial exposure of biometric information that will result in long-term security, it’s easy to see why consumers are willing to provide it.”

Final Take
Michael Barris is staff reporter on Mobile Commerce Daily, New York