Digital banking and online mortgaging have become a hit in the last year. As a whole, we have seen the financial services sector transfer to being digital. With this transition comes the great liability of security. Knowledge-based authentication (KBA) is becoming outdated, having many shortfalls as the world enters the digital age, leading the industry to biometrics as a form of security.
Biometric technology is used to identify a person based on a certain aspect of their biology. The two primary forms of biometric authentication are fingerprint verification and facial recognition, while biometrics also include analyzing a human’s iris, palmprint, retina, voice, hand geometry, or signature.
In financial services, biometric technology is a fast and efficient way to identify a customer’s identity. Whether it is opening an account, making a bank transfer, or even using a smartphone for online banking, biometrics can make the process more secure. Smartphones have proven to be the driving point for the use of biometrics in today’s world. The easiest ways to do so are through fingerprint recognition, facial recognition, voice recognition, or iris scan.
In terms of the mortgage industry, many companies pride themselves on their ability to make mortgages easier, faster, and better — OnlineApplication is one of them. With the help of many technologies, the mortgage process can be completed within minutes. Two players in this are electronic data gathering and automated verification to quicken the process.
Going along with improved technology is the increased risk of mortgage fraud. In the past, Knowledge-Based Authentication (KBA) has been the primary form of security. KBA is a form of authentication where the user must provide private information to prove that they are the owner of the identity. The great flaw of KBA is that anyone with that information can pose as the owner of the identity — the systems would have no idea that mortgage fraud is occurring. For example, if I were to share my password with a friend, they would be able to log into my account, posing as me, without anyone knowing. That being said, KBA is an outdated tool that needs replacing as the industry continues to grow into the digital age.
Biometrics serves as a great solution to the KBA security problem. Technology is so advanced today that these biometric aspects of a person cannot be duplicated well enough to fool an online server, immensely lowering the risk of impersonation, along with fraud, online.
With security no longer a major issue, the mortgage industry can move forward with its journey into the digital age.
“Solving for Fraud, Biometrics Are the Future of Mortgage.” HousingWire, 27 Apr. 2021, www.housingwire.com/articles/solving-for-fraud-biometrics-are-the-future-of-mortgage/.