HSBC is another in a succession of banks and financial organisations that are favouring biometrics over passwords as a way to improve security for their customers, and to reduce the costs to those organisations of attacks. In what is thought to be the largest planned rollout of voice biometric technology HSBC is introducing a system that will allow its 15 million+ customers to use their voice or their fingerprint for authentication purposes rather than just passwords.

The first of HSBC’s customers to use the system will those in its First Direct internet and phone banking division in March /April, with the rollout for other customers planned for this summer.

How Will It Work?

As with other fingerprint recognition systems like Mastercard’s, HSBC’s will require customers to use their smartphone and an app. For HSBC this will involve the fingerprint reader built into Apple’s iPhone used in combination with the HSBC mobile banking app.

The ‘Nuance Communications’ voice recognition technology (the same as that used by Barclays in its call centres) uses over 100 unique identifiers such a as speed, cadence, pronunciation and the detectable effects of physical features to identify a customer.

Better Than Passwords

As well as possibly increasing the speed of authentication / verification compared to verbal security checks and passwords, biometric systems like these are thought to be a big improvement on the password system because:

1. Biometric measures are more secure. More than one third of UK consumers for example use the same password for multiple purposes thus dramatically increasing their risk if their password is discovered by cyber criminals. The most common password is 123456, and passwords like this would be quite easy for cyber criminals to discover. A YouGov poll commissioned by HSBC has also shown that over 50% of UK consumers rarely update passwords thus making things easier again for the determined cyber criminal.
2. Customers appear to like, trust and prefer biometrics. A 2015 Visa Europe survey for example showed that the new generation of banking customers would be happier with biometric authentication methods. The survey showed hat 75% of 16 to 24 year olds would have no problem using biometric security, and 69% expect it to be faster and easier than a password or a PIN. The same survey found that 78% of the 2,000+ adult respondents were confident that their body is unique enough to be used as an identifier and 74% of the respondents felt this would be the default password in future.
3. Banks can reduce the cost of covering fraud. At the moment banks and credit card companies have to build in extra costs in to the prices for transactions to cover fraud.

What Will It Mean For Your Business?

The hope is of course that this is one extra layer of security for all HSBC customers, both business and domestic, and it could therefore reduce our risks of becoming victims of fraud. As well as the potential time saved when conducting bank transactions, and the convenience of being able to do so on the move (using your mobile device), if it is very successful at cutting crime it could mean that the banks transaction costs are lowered. If the bank then chooses to pass these savings on to customers then this could be another advantage for your business. For now though it is a case of wait and see.