Handwriting is an exceptionally individual trait — perhaps even more so than you’d expect. Graphologists (those who study handwriting) have purportedly identified around 5K unique characteristics that exist within a person’s handwriting. Each stroke of a pen, from the degree of a letter’s slant to the space between words and the pressure applied to the paper is distinctive. Forensic analysts have used these subtle details to verify identities, driving home how unique someone’s writing really is. In an increasingly digital world, handwriting analysis is giving way to something more modern — a kind of technological fingerprint known as behavioral biometrics. This method tracks how a person interacts with devices, from speed to gestures and everything in between, and is quickly gaining traction as a form of authentication in financial services — and may be something that community financial institutions (CFIs) want to have on their radar. Behavioral Biometrics in a NutshellTraditional physical biometric methods — such as fingerprint or facial recognition — make users undergo a one-time authentication process. In contrast, behavioral biometrics confirms a user’s identity by continuously tracking and analyzing their behavior and how they interact with their devices in real time, thereby allowing for continuous authentication.
- Behavioral biometrics focuses on various behaviors, including a user’s:
- Typing patterns (speed, rhythm, pressure, shortcuts)
- Mouse movements (how and the speed at which it’s moved and clicked)
- Touchscreen interactions (pressure, location, and gestures used)
- Smartphone orientation (landscape or portrait)
As these patterns are unique to every individual, they create a “behavioral profile” that can be seamlessly and continuously analyzed and monitored in the background using artificial intelligence (AI) and machine learning (ML). This real-time analysis helps detect unusual activity patterns — such as significant changes in typing speed or irregular touchpad movements — and can raise an alert for possibly suspicious behavior. The system can then trigger the need for additional verification steps, delay a transaction until more information is provided, or even freeze an account to prevent fraud as early in the process as possible. Preliminary research shows behavioral biometrics have a 90% effectiveness in identifying and preventing money mule activity.Potential Benefits of Behavioral Biometrics in BankingThe rapid evolution of various technologies means that traditional authentication methods, such as passwords and PINs, are becoming increasingly vulnerable to fraudsters and cybercriminals. As such, financial institutions (FIs) need to research and adopt more advanced methods to use alongside existing security measures to proactively prevent fraud and protect their customers. FIs can use behavioral biometrics to:
- Authenticate login and account opening processes
- Monitor account activity and transactions in real time (e.g. authenticating faster payments)
- Help detect social engineering scams
- Improve compliance with Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations
When used in tandem with existing security measures, behavioral biometrics can enhance an FI’s risk management and cybersecurity by establishing multiple layers of continuous assessment (e.g. device type, location, and typical user behavior). Behavioral biometrics has the potential to increase operational efficiencies, by streamlining and simplifying an FI’s anti-fraud processes. What’s more, because behavioral biometrics takes place in the background, it can help reduce friction for users, like the need to enter multiple passwords and/or pins, thereby improving the overall customer experience. Several large technology services, FIs, and payment processing companies have already implemented behavioral biometrics to defend against payment scams and strengthen their fraud prevention systems. Companies such as BioCatch, BehavioSec, and Nuance Communications have emerged as key players helping organizations to implement this technology. The market for behavioral biometrics is estimated to reach $14B by 2032.Challenges of Behavioral BiometricsAlthough behavioral biometrics offers exciting potential for CFIs in the future, it’s important to be aware of the challenges and concerns associated with reliance on this data. These include:
- Data privacy and security. Behavioral biometrics involves the non-intrusive collection and storing of significant amounts of personal data. As such, CFIs will need to be transparent about why they’re collecting the data, how they’re going to use it, and how they’re going to store it securely. Robust consent and data protection procedures and adherence to relevant data privacy laws will be key to ensuring and maintaining consumer trust and engagement.
- Risk of errors. No system is perfect, and even with behavioral biometrics, there is a risk of false positives (legitimate users flagged as suspicious) and false negatives (missing fraudulent activities). CFIs will need to balance the effectiveness of a behavioral biometrics system with these risks and potential disruption to users.
- Cost of implementation. While it could save money and reduce operational costs over time, the initial setup of a behavioral biometrics system can be expensive. CFIs should assess whether the investment is justified by the benefits it could provide.
The use of behavioral biometrics in conjunction with existing security methods can significantly improve fraud protection and cybersecurity for FIs, while providing a good user experience for their customers. However, it’s still nascent technology, so for now, CFIs would do well to monitor how the usage of behavioral biometrics for cybersecurity evolves.
