How biometrics is changing Latin American banking

In Brazil you can go to an ATM and withdraw cash with just your fingerprint. The tech has been around for a while and has changed the way Brazilians are banking. They are not the only ones. recently reported that Nequi, a financial mobile banking service from Bancolombia, has become the first in Colombia to deploy mobile biometrics for authentication. The technology – the IdentityX platform – is supplied by US fintech specialist Daon, which is also being used by Brazilian online bank Neon which offers smartphone access only to its accounts. Neon claims to be the first bank in Brazil to use biometric authentication for transactions within smartphone applications.

Ilnort Rueda Saldivar, partner at global management consulting firm A.T. Kearney, says that biometric implementation is not unique to Latin America and while there are isolated implementations in various countries –  Poland, China, Taiwan, South Africa, Brazil and Mexico – in most cases biometric identification is being tested in small scale pilots. 

He adds biometrics can bring convenience and security to the banking system. “Fingerprint and finger vein scanning improve account opening and financial transaction validation – in a fraud environment where consumer’s login credentials can be stolen, fingerprints cannot. Biometrics also improve convenience – scanning the finger tends to be easier than typing and remembering passwords.”

Saldivar describes the three main characteristics of the Latin American banking environment that have served to push the implementation of biometrics. These are the need for robust solutions to prevent fraud in the account opening and transaction process, the need for simpler authentication solutions targeted to individuals with lower levels of education, and the existence of major banking players with budget and scale to roll-out the technology.

The Brazilian example shows the relevance of scale and time in the implementation of such solutions. “Biometrics require major investments and, although it provides a better final experience, it requires customers to go through an unfriendly registration process,” Saldivar says. “Major players in Brazil have spent several years enrolling customers and rolling-out hardware and software implementations. Not having a market standard increases investments in shared infrastructure, like external ATMs.”

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Bianca Wright

Bianca Wright is a UK-based freelance business and technology writer, who has written for publications in the UK, the US, Australia and South Africa. She holds an MPhil in science and technology journalism and a DPhil in Media Studies.

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