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banking

Biometric hardware shipments on course to recover to pre-COVID levels

960 640 Stuart O'Brien

Total worldwide biometric device shipments fell from 4.1 million in 2019 to 3.4 million in 2021 and recovered slightly to 3.6 million in 2022, with global trends impacting usage in banking, financial services and insurance (BFSI) sectors.

According to a new report by technology intelligence firm ABI Research, geopolitical and macroeconomic events, including the conflict in Ukraine, the shortage in semiconductor supply, and downturns in supply chains, have resulted in turbulent market dynamics over the last few years.

It asserts that with a CAGR of 11.3%, fingerprint recognition will expand from 1.7 million to 2.9 million shipments in 2022 and 2027 to claim the lion’s share of the biometric modalities market.

“However, due to simplicity and the expanding use of liveness detection, facial recognition biometrics will experience the fastest growth over the same period, with a CAGR of 11.9%.” says Sam Gazeley, Digital Payment Technologies Analyst at ABI Research. “In terms of biometric hardware technology shipment share, ID/Authentication will account for 64% of the BFSI market in 2023. This is partly because, aside from smartphone-centric biometric technologies, user registration and authentication are the key use cases for biometrics in the BFSI sector.”

“Exacerbated by the increasing integration of biometrics in mobile banking apps and with more customers turning to mobile banking apps, several BFSI businesses are including biometric authentication methods like fingerprint and facial recognition in their solutions. While this applies predominantly to the smartphone industry, the BFSI market’s growing use of biometrics will encourage the deployment of biometric hardware in branches.

“The customer experience as it relates to the client authentication processes is being streamlined by deploying biometrics such as fingerprint and facial recognition, which improves the entire experience with BFSI services and combating fraud by eliminating the need for passwords.”

However, it is also important to remember that branchless banking is growing in popularity and will limit the accessible market for biometric hardware providers as we enter the forecast period, particularly regarding neo and challenger banks.

UK banks prevented £1.66bn of fraud in 2018

960 640 Stuart O'Brien

Latest figures have revealed that £1.66 billion of fraud was prevented by the banking industry last year.

The industry research, Fraud the Facts 2019, published by UK Finance, found that the figures were made up by various fraud attempts, including:

  • £1.12 billion in attempted unauthorised card fraud
  • £318 million in attempted unauthorised remote banking fraud
  • £218 million in attempted unauthorised cheque fraud

The prevention roughly equates to stopping £2 in every £3 of attempted unauthorised fraud.

However, during the same period a total of 1.20 billion was stolen by criminals, including £354 million in authorised fraud and £845 million in unauthorised fraud.

Discussing the findings, Katy Worobec, MD of Economic Crime, UK Finance, said: “Fraud is a crime which poses a major threat to us all – it can have a devastating impact on victims and the money stolen funds even more damaging crimes such as terrorism, drug trafficking and people smuggling. Every business, from online retailers to social media companies, as well as the public sector, has a duty to work together to beat fraud and prevent stolen data getting into the hands of criminals.

“Last month, the finance industry and consumer groups agreed a voluntary Code which will increase protection for customers from authorised push payment scams. It delivers a significant commitment from signatories to reimburse victims when the customer has met the standards expected of them under the Code. At the same time the industry continues to fight fraud on every front to protect customers and prevent this kind of crime – investing in advanced security systems and new ways to track stolen funds, assisting law enforcement in tackling the criminals and supporting the government in improving the ways in which intelligence is shared.”

Unauthorised fraud is defined as the account holder being deceived without providing authorisation to proceed with a transaction carried out by a third-party.

In an authorised fraud, a customer is duped into authorising a payment to another account which is controlled by a criminal.

“Fraud can have a devastating impact on victims and our new Serious and Organised Crime Strategy sets out how we will mobilise the full force of the state against this type of crime,” said Ben Wallace, Minister of State for Security and Economic Crime. 

“We are working with industry, law enforcement and regulators to reduce the number of fraud victims and to ensure they get support and advice on practical steps they can take to protect themselves.

“Meanwhile the new Economic Crime Strategic Board is working with senior figures from the UK financial sector to tackle this, and the National Economic Crime Centre is coordinating the law enforcement response.”