This story was delivered to BI Intelligence "Fintech Briefing" subscribers. To learn more and subscribe, please click here.Global banks areexperimenting with biometrics like voice and facial recognition, as well as fingerprint technology for customer authentication, including for mobile app logins. But fraudsters may be able to get past one of these methodsfacial recognitionby using theLive Photofunctionality on the iPhone 6S,accordingtoresearcher Meaghan Johnson from fintech consultancy 11:FS.Registering for facial recognition technology typically requires users to hold their smartphone camera up to their face and blink or smile. This is so that the banking app knows it's not being presented with a photo. But the iPhone's Live Photo capability lets users capture an image with limited movementjust enough to record a blink, for example. Johnson was able to gain access to accounts from two unnamed banks using facial recognition technology by presenting the facial recognition screen with a Live Photo. The vulnerability is unlikely to present a serious threat to security, for now.Banks that employ facial recognition technology generally use it alongside other security measureslike requiring users to have a lock on their phone or only allowing a customer's account to be accessed from a single registered device. Exploiting the weakness would also require a hacker to have both the victim's phone and a Live Photo of them, which is an unlikely scenario.But this development suggests that banks should think carefully about how they use biometrics.Only 9% of UK consumers are happy to use facial recognition as a means of identification, according toExperian, and stories like this are likely to further dent consumer confidence. This implies that banks should continue to use biometrics as an additional or optional security measure, rather than a replacement for existing methods.Passwords and PINs are being rendered irrelevant thanks to rising digital fraud, growing concern about data privacy, and difficulty remembering an endless stream of letters and numbers. Thats been leading both software and hardware firms to explore new methods of verifying user identity. One such method is biometricsunique biological measurements that can be digitized and turned into a trackable record.These methods, which include fingerprint scanners, voice verification, or retina and vein scans, are steadily gaining popularity for unlocking smartphones or accessing sensitive appsBI Intelligence forecasts that by 2021, 99% of US smartphones will be biometrics-enabled. But theyre also becoming increasingly popular as a way to verify payments, because they keep consumer data secure without inconveniencing consumers.But as these methods are implemented, firms face unique security challenges. Because of the way biological data is stored and encrypted, its much harder for hackers to access and use. But if it is accessed, its extremely valuable, since biological data cant be changed or replaced in the event of a breach. And though those risks could deter consumer, merchant, and vendor adoption, it appears as though most parties believe the benefits outweigh the risks and will likely implement biometrics-based authentication in their applications moving forward.Jaime Toplin, research associate for BI Intelligence, Business Insider's premium research service, has compiled a detailed report that sizes the market for biometrics-enabled smartphones in the U.S., described various types of biometrics authentication, evaluates their utility in the payments space, investigates the potential security risks and hurdles to adoption for both front- and back-end applications, and assesses the types that are most likely to see widespread application.Here are some key takeaways from the report:US smartphone makers are rapidly integrating biometrics-based features, such as fingerprint scanners, into their devices.BI Intelligence forecasts that 99% of installed smartphones in the US will be equipped with fingerprint scanners by 2021.The shift will happen much sooner for the installed base ofiPhones in the US nearly all of which will be biometrics-enabled by 2018.Biometric technology is moving beyond fingerprints.Right now, biometric verification is largely concentrated on fingerprint-scanning technology on mobile phones. But the technology is expanding, and other verification methods, including facial recognition and iris scanning, are becoming more popular.Biometrics do pose their own security challenges.The unique nature of biometric verification, and the fact that the digitized record is stored locally in a secure portion of the phone, makes this data far more protected than traditional verification methods. But the risk to this type of data is also greater because unique, permanent biological identifiers are very valuable to hackers.In full, the report:Forecasts the number of US smartphones that will include fingerprint scanning technology through 2021 and assesses industry growthProvides data showing why biometrics relieve pain points associated with in-store and online purchasing without eliminating securityExplores different types of biometrics and evaluates differ net payments use casesEvaluates whether security risks and other challenges will hinder adoption of biometricsAssesses which type of biometrics will become most popular among consumers and developers moving forwardInterested in getting the full report' Here are twoways to access it:Subscribe to anAll-Accesspass to BI Intelligence and gain immediate access to this report and over 100 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensureyou stay ahead of the curve and benefit personally and professionally. >> START A MEMBERSHIPPurchase & download the full report fromour research store. >> BUY THE REPORTThe choice is yours. But however you decide to acquire this report, youve given yourself a powerful advantage in your understanding of how biometrics are changing the payments industry.Join the conversation about this story
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