We are very pleased to announce Zwipe as a Lunchtime Listen Sponsor at Biometric Summit 2021. Join this power-packed day and hear expert insight from the team by registering for your free place today.
It has been a challenging year for us all and one cannot underestimate the impact of the pandemic on so many people around the world. However, there is significant hope that 2021 will be a much better year for many of us.
2020 has been a year of the acceleration of digital transformation.
More people are working from home – At its highest figure during the Covid lockdown, 38 percent of the UK’s workforce was classified as exclusively working from home. [Source 1: UK ONS]
More people are banking remotely – More people are turning to digital banking, mobile and online, and many people are new entrants in using this technology. A study by McKinsey discovered a 20 percent rise in digital banking during the COVID-19 crisis – that’s two years’ growth in just a couple of months. [Source 2: McKinsey]
More payments are moving online – A study from McKinsey says that in the first six months of 2020, consumers spent US$347 billion online with US retailers, up 30 percent from the same period in 2019.
Once it is safe to do so, and the COVID-19 vaccinations have reached the majority of the world’s population, then we shall undoubtedly see the pendulum swing quite dramatically back to physical interaction. We are social beings and a pent-up demand for physical interaction means we will embrace physical shopping, face-to-face business meetings and events and international travel. However, a new normal will emerge as normal life resumes and we again experience the inconvenience of long queues for parking at the shopping mall or travelling three hours for a 30 minute business meeting. The pendulum will again move towards the virtual world resulting in a balance of physical and virtual interactions with the distinction between the two narrowing. Much of the change in behaviour that has been a result of this pandemic will stick.
The improved digital infrastructure and a change in work culture will go hand-in-hand to support a much more virtual lifestyle. Businesses will support increased working from home and will benefit from improved productivity, reduced costs from smaller office space and improvements in employee mental health – getting that work-life balance is so important.
In the world of digital trust and security, in particular with authentication, biometrics, fraud and security, and identity, I believe that the following will happen in 2021.
Authentication: Despite the many predictions that 2020 will see the ‘death of the password’ it still dominates the authentication landscape. The need for secure and frictionless authentication mechanisms that work across all channels and devices has never been so pressing but the fact remains that the password is still king. PSD2 Strong Customer Authentication (SCA) has increased the use of 2FA and MFA but banks and payment service providers are largely turning to SMS delivered OTPs despite many reservations from security experts and groups such as NIST. Standards such as FIDO and other passwordless initiatives provide organisations with alternatives to passwords that eliminate many of the security weaknesses, but adoption levels remain muted. There have been positive moves from some of the large tech networks including Microsoft and Google with their authentication apps but in many cases, it is still not mandatory for users to adopt them. I believe regulatory pressure will be the biggest driver to move away from passwords in 2021.
Biometrics: Expect another stellar year for biometric adoption across a wide range of verticals. I predict that behavioral biometrics will be more widely used in partnership with anti-fraud and authentication solutions especially in heavily regulated industries including financial services (EUs SCA and 3-D Secure 2.0 are driving forces in payments).
Will 2021 be the year that biometric payment cards finally arrive for consumers? Expect an uptick in pilots around the world and increasing commercial rollouts to enable secure, safe, frictionless and no-limit payments in physical locations. Surveys from 2020, including our own yet to be published UK survey, indicate that there is strong demand for these cards and a willingness to pay a nominal sum per month for the privilege of owning one. With the rise of contactless cards in many regions of the world, the addition of biometric authentication will make them the top of wallet choice for millions of consumers.
Biometric accuracy and the ability to withstand presentation attacks (liveness or genuine presence assurance) will continue to improve in 2021 making biometrics a reliable method to identify and authenticate people across a wide range of devices and channels.
Biometrics will be vital for a wide range of applications across many different verticals; to support a safe (often touchless) and seamless travel experience, as a pivotal component in remote digital onboarding, to secure the next generation of connected cars, to link the physical and digital worlds for government-issued digital identity and to both actively and passively authenticate people.
Fraud and Security: There is enormous pressure on fraud and security systems to withstand increasing levels of attack on core systems. Covid-19 has led to increasing levels of fraud attempts against digital services. The UK’s Action Fraud reported a 400 percent increase in COVID-19 related fraud during March 2020 with the majority of reports related to online incidents. As remote onboarding increases there will attacks on the tools that are being used to support this process, including using AI-powered attack tools to fool face biometric systems and the collection of personal information for use in synthetic identity attacks. Attacks on remote account opening has increased during the COVID-19 period and it has become one of the favoured attack points for criminals. In terms of a response from fraud teams, I predict increasing levels of cooperation between fraud and security teams to withstand the assault. This will include increasing adoption of layered tools that protect all levels of digital interaction with customers from discovery, onboarding, authentication and transaction processing.
Throughout 2021, more states will enact privacy and data protection legislation akin to the GDPR and California’s CCPA legislation.
Identity: A portable government-issued digital identity is proving to be a fundamental requirement in supporting digital transformation. It has the ability to provide an anchor for a wide range of linked digital identity credentials. This may be issued in a centralised or decentralised (self-sovereign) model – there are merits for both. Governments manage a rich depository of verified identity data across a number of different agencies. I predict that during 2021 governments will wake up to the opportunity that this data provides by enabling third parties to access this data in the same manner that government-issued documents are used in the physical world.
Age verification will be a popular application for next-generation digital identity solutions. I predict that blockchain technology is a realistic platform for age verification services as it can be supported by a zero-knowledge proof protocol that only supplies a cryptographic representation to the answer – am I legally permitted to access/purchase/consume age restricted products and services, including digital adult content and the consumption of alcohol? For instance, I am a student (this for me was some years back) and I am legally permitted to drink alcohol, but I am at an age where I need to verify my age when entering a venue that serves alcohol. Instead of using a physical government-issued document that proves that I am legally allowed to consume alcohol, along with long list of other personal attributes that are irrelevant to the consumption of alcohol, I (the prover) give permission to the venue management (the verifier) to access my digital identity app (wallet) to verify my age. The verifier doesn’t not need to know my date of birth, they only need to know the answer to the question – am I legally permitted to consume alcohol, to which the answer can only be ‘yes’ or ‘no’.
2020 saw Goode Intelligence work with a wide range of digital identity bodies and providers and we’ll be continuing this collaboration in 2021.
I would like to wish all of you a happy and safe holiday season and I look forward to connecting with you during 2021 – a hopefully less stressful year than 2020.
Alan
[1] https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/conditionsanddiseases/bulletins/coronavirustheukeconomyandsocietyfasterindicators/1october2020 [2]
2019 has witnessed intense activity in the development of biometric payment cards with many pilots running around the world.
2020 is seen by many as a breakout year for biometric payment cards with pilots turning into commercial rollouts and these next generation payment cards beginning to be delivered to potentially millions of people across the world. This includes the recent announcement by NatWest bank in the UK of the world’s first biometric credit card pilot with 150 customers.[i]
As an analyst company that specialises in high-growth areas of identity, authentication and biometrics, at Goode Intelligence we first investigated the market opportunity for biometric payment cards in 2015 and again in 2018 in the first and second edition of our Biometrics for Payments analyst report.[ii] We predicted low volumes of cards initially as card issuers tested out the technology with pilots, ramping up to almost 579 million cards for 2023. We’ll be refreshing these forecasts in 2020 based on the latest data and input from all parts of this ecosystem, in the meantime here are some insights of how the market has moved along over the past year.
Our analysis in 2018 determined that there are a number of hurdles to overcome before biometric payment cards can be shipped in their millions. This includes cost, including the question of who pays for the card, scheme certification and enrolment.
As one of the hottest topics in biometric payments, we’ve naturally built biometric payment cards into our next biometric event – Biometric Summit London 2019. We’re delighted to have three vendors that are active in biometric payment cards, IDEX Biometrics, Precise Biometrics and an exciting new entrant, Riot Micro, speaking at the event to share their thoughts and vision on this and other relevant topics with our delegates.
I interviewed each of them recently to get their insight on where we are currently with biometric payment cards.
IDEX Biometrics
I caught up with David Orme, SVP Sales and Marketing at IDEX Biometrics to get the latest insight into how the market is currently taking shape.
I asked Orme what the current status was. He explained that as “biometric technology is already influencing our lives with smart phones and airport terminals etc, the next evolution is with payment cards. We are in the market building phase at the moment with many pilots either concluding or being introduced.”
Orme provided us with some insight into IDEX Biometrics’ latest developments saying, “there is expectation that multiple partners will achieve certification completion for their biometric card that will result in a production order ramp up.”
One of the areas that Goode Intelligence has identified as being critical to the success of biometric payment cards is remote enrolment and Orme informed me that IDEX Biometrics has been very active in developing solutions for this with “remote enrolment patents in many territories around the world and a recent patent license agreement with global card manufacturer IDEMIA.”
Orme also referenced three other major hurdles that need to be overcome to ensure the success of biometric payment cards including “educating consumers and financial institutions on its value and ability to combat fraud”, “the cost of a biometric payment card and who’s responsibility this is” and “addressing common misconceptions such as where the data is stored”.
With high numbers of pilots being concluded in 2018 and 2019 Orme believes that biometric payment cards “will be in mass-market usage by 2020”.
Precise Biometrics
In a discussion with Stefan K. Persson, CEO, Precise Biometrics I asked him where biometric payments cards are in their development lifecycle, Persson’s reply was that “Biometric contactless cards are now getting more mature now and are not the same novel technology as 18 months ago. It’s widely recognised that they bring security at no expense of user convenience and card schemes are increasingly active in certifying these cards, which means the timeframe for commercial adoption is getting quite close now.”
With many pilots taking place in 2019 I asked Persson what this meant to shipment numbers as we approach the end of the current year. “We are involved in a number of pilots with our partners now, including NXP with whom we also have achieved the first Mastercard CAST certification. It’s important that all our quality and convenience criteria are met so we envisage small volumes through the rest of 2019 with a gradual ramp-up in 2020.”
Strong security is vital to payments and ensuring that biometric matching and storage of biometric templates takes place in a secure piece of hardware on the card is important. Persson discussed the importance of this and provided insight into a pilot that they were involved in run by Crédit Agricole in France.
“One noteworthy pilot that we are involved in through our partnership with NXP is the Crédit Agricole and Mastercard trial of G+D’s biometric card (showcased at Money 20/20 Europe earlier this year) with an integrated fingerprint sensor using NXP’s platform featuring Precise’s technology. This card is one of the first with a very strong combination of features requested by the payment eco-system as the NXP platform is based on a contactless card, using the NFC field only without a built-in battery. Most importantly, in addition to delivering enhanced customer convenience, the card is highly secure as the biometric matching and storage of the biometric templates takes place in a secure element (a secure chip in the card).”
Riot Micro
Riot Micro is an exciting start-up that I had the pleasure of meeting at MWC 2019 earlier this year in Barcelona. Riot Micro is a fabless semiconductor headquartered in Vancouver Canada with offices in US and Switzerland and development sites in Egypt and India. Their technology has been incorporated into an ISO compliant cellular biometric card (CBC).
I talked to Abdallah Turki at Riot Micro to get his opinion on where we are with biometric payment cards; “I believe that Biometric cards are gaining recognition as the most effective and seamless method of making secure payments, I expect 2020 will be the year were when financial institutions and others will take a more serious look at implementation approaches, the rise of data breaches as highlighted by the recent event effecting BA and Marriott makes taking [steps] to protect data more urgent than ever.”
Turki provided me with an update on where his company currently is with the development of its cellular biometric cards and plans for 2020; “Riot Micro has committed to delivering a cutting edge cellular technology enabling a disruptive and seamless payment technology. At MWC 2020 we will be showcasing the ISO compliant credit card that has multiple use cases and I am glad to announce that we have signed the second bank for our CBC and are in serious discussions with multiple FinTechs who are exploring multiple product launches.”
There are still challenges to the commercialisation of biometric cards and Turki acknowledges this, “Scalability and manufacturing of cards with complex components remains challenging however with advances in the manufacturing process these challenges will be overcome”.
Cellular biometric cards are following the wake of the success of standard dual-interface biometric cards and Turki suggests that “the first cards, purely online banking cards” will be available “by the end of Q4 this year” with the “prototype ISO compliant credit cards showcased at MWC 2020” with “commercial launches expected by end of Q4 2020.”
I would like to thank IDEX Biometrics, Precise Biometric and Riot Micro for their contribution to this article. All three companies will be involved in the Goode Intelligence organised Biometric Summit London 2019 and will be on-hand to answer any questions that you may have on the next evolution of payment card technology.
To register for this event please follow this link.
Thank you. Alan Goode, CEO and Chief Analyst, Goode Intelligence.
[i] https://www.rbs.com/rbs/news/2019/10/natwest-first-uk-bank-to-unveil-biometric-credit-card.html
[ii] https://www.goodeintelligence.com/report/biometrics-for-payments-market-technology-analysis-adoption-strategies-and-forecasts-2018-2023/
As a leading provider of fingerprint identification technologies IDEX Biometrics offers simple, secure and personal authentication for all. Meet its team at Biometric Summit London 2019 to hear about how it invents, engineers and commercialises secure, yet incredibly user-friendly solutions to help people make payments, prove their identity, gain access to information, unlock devices or gain admittance to buildings with the touch of a finger. Register now to ensure your space at this unique event on Wednesday 20th November 2019.
Recent Comments