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Report: 80% of fintech execs worry about authentication security tools

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According to an industry survey conducted by biometric authentication provider authID.ai in partnership with Market Measurement, 80% of fintech decision-makers harbor moderate to high levels of concern about the risks associated with legacy identity authentication options. Three-quarters of the executives also expressed at least a moderate degree of concern about potential customer dissatisfaction with one-time passwords (OTP) and knowledge-based authentication (KBA) questions.

Legacy IT security tools possess vulnerabilities capable of being exploited, including seizure of SMS pin codes by cyber criminals or fraudulent account takeovers using easy-to-guess security prompts.

Despite executives’ concerns of these tools, fewer than a quarter (22%) of respondents are currently using an alternative system, such as facial biometric identity authentication. However, of significance, the majority of respondents (70%) are likely to consider switching to that alternative in the next year. In fact, over the next 12 months, 75% of respondents said they plan to increase their investment in IT security, including identity authentication.

Graphic. 2021 Fintech Security Report. 100+ fintech executives were polled during Money 20/20 USA about attitudes toward identity authentication technologies. 84% expect to increase investment in IT security in the next year. 70% are highly or somewhat likely to consider facial biometric identity authentication as an alternative to OTP/KBA questions during the next year.

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These findings signal an emergent trend for new enterprise security solutions, including biometrics, as institutions look to better secure their customers’ data and improve the customer experience in digital, often cloud-based transactions. Given that 88% of respondents said they were familiar with facial biometrics, also called “facial matching,” it is highly likely that this security solution will play a growing role in identity authentication transactions in financial institutions, personal consumer technology, and more.

Over a two-day period, concurrent with the fintech industry conference Money 20/20 USA, the company polled 113 senior fintech executives in roles spanning management, sales/marketing, and information technology to understand their concerns and familiarity with legacy identity authentication solutions and their contemporary alternatives.

Read the full report by authID.ai and Market Measurement.