Financial institutions are the backbone of a nation’s economy. Banks hold billions of assets and help ensure the security of their client’s funds. And with the growth of financial technology (”FinTech”) comes the rise of digital applications that customers can use to cater to their financial needs.

Because of this, financial services and payment services are some of the most targeted by cybercriminals. Reported incidents of data breach and fraud continually increase annually, which requires institutions to enhance their security measures to achieve strong customer authentication. With all the available digital security solutions in the market, biometrics is gaining traction within the finance and payments industry due to its high level of reliability against cyberattacks. 

 1800s

Although the first system of using a person’s biological data for identity verification can be traced to the late 1800s, the modern history of biometric technology started during the 1960s. This was the decade when researcher Gunner Fant presented a model of using acoustic speeches and phonic sounds, which became the basis for modern voice recognition technology. 

 1960s

Also, during the 1960s, the Federal Bureau of Investigation (FBI) pushed to automate fingerprint identity validation. Along with the National Institute of Science and Technology (NIST), the FBI funded the project, and the prototype of fingerprint scanners was finished in 1975. 

 1990s and 2000s

The research to innovate biometric technology continued, and multiple patents for inventions were made during the 1990s and early 2000s. Big technology firms also started to integrate biometrics into their services, especially with the growth of computers and smartphones. 

And with the complexity of the financial industry, payment services also started to incorporate biometrics into the security process. With the implementation of the Payment Services Directive 2 (PSD2) statute, payment services are required to enhance consumer protection with modern solutions. The PSD2 Strong Customer Authentication (SCA) guidelines include using a customer’s biological data for multi-factor authentication. 

The identity verification solution of LoginID is highly reliable and will help ensure a strong level of digital security for payment services.