Staying ahead of the technology curve means strengthening your competitive advantage. That is why we give you data-driven innovation insights into the financial services industry. This time, you get to discover 5 hand-picked startups developing biometric security systems.
Global Startup Heat Map highlights 5 Top Biometric Security Systems out of 280
The insights of this data-driven analysis are derived from the Big Data & Artificial Intelligence-powered StartUs Insights Discovery Platform, covering 2 093 000+ startups & scaleups globally. The platform gives you an exhaustive overview of emerging technologies & relevant startups within a specific field in just a few clicks.
The Global Startup Heat Map below reveals the distribution of the 280 exemplary startups & scaleups we analyzed for this research. Further, it highlights 5 FinTech startups that we hand-picked based on criteria such as founding year, location, funding raised, and more. You get to explore the solutions of these 5 startups & scaleups in this report. For insights on the other 275 biometric security systems, get in touch.
MeReal Biometrics enables Fingerprint-based Contactless Payments
Digital payment portals and banks use two-way handshake mechanisms to authenticate users and transactions. These mechanisms encrypt the transmitted data and utilize dynamic and unique passwords for each transaction. Even then, malicious hackers are able to access sensitive data by deploying simple man-in-the-middle attacks. This is why startups are integrating biometrics with digital banking. Biometric solutions like fingerprint and facial recognition strengthen financial security due to their uniqueness.
MeReal Biometrics is a Hong Kong-based startup that develops MeReal Card, a user authentication solution. It maps the customer’s fingerprint to a unique radio-frequency identification (RFID) and acoustic one-time password (OTP) for each transaction. This is sent to the startup’s card reader for authentication and validates the transaction on matching, enabling contactless payments at the point of sale (POS). Moreover, MeReal Cards comes with an energy harvesting system that recharges itself upon contact with an RFID reader and an optional charging port.
PayEye offers Iris Biometric Authentication
Sharing fingerprint data with merchants and third-party service providers causes concern in certain users as they use it for authentication at banks and government organizations. Similar to the fingerprint, the iris and retinal patterns are also unique for each person – making them an attractive option for authentication. Despite that, reading retinal patterns needs specific devices that shine a light beam into the eye. However, iris patterns are measurable using non-intrusive computer vision. In addition, iris scanning is faster and hence saves work hours in onboarding and verifying customers. Therefore, startups provide iris-based authentication systems for banks and non-banking financial firms (NBFCs).
Polish startup PayEye develops an iris-based biometric authentication solution. PayEye’s smartphone app allows users to scan their iris pattern and convert it into a numerical code. Users can add money to the PayEye app and pay their bills by scanning their iris using EyePoS, the startup’s POS device. Through this solution, PayEye improves the freedom, comfort, and security of the users. Furthermore, PayEye is developing an iris-based authentication system for transactions through the internet.
IDcheck provides Biometric Screening
The financial sector is increasingly moving its operations online with the emergence of digital-native startups. However, this also presents new opportunities for fraud and identity theft during document and identity verification. To tackle this issue, startups now create facial recognition algorithms that analyze multiple features of facial data to identify fraudsters. This allows financial organizations to detect identity thefts, thereby improving customer safety and saving legal costs.
IDcheck is a British startup that offers biometric screening for financial services. The startup combines proprietary facial recognition, liveness check, and motion analysis algorithms to verify customer identity documents. Moreover, it detects fraudsters who use photos and obstacles to cover the camera, thus denying verification. IDcheck removes all biometric data after issuing client reports, eliminating privacy concerns in the event of cyber theft. IDcheck’s biometric screening finds use in know your customer (KYC) verification, document verification, and ID verification, among others.
Sign’Buy enables Signature-based Authentication
Current merchant-issuer transactions generally use 3D-Secure mechanisms to authenticate the user initiating the transaction. This is a complex process as the user is taken to the issuer’s portal through the merchant to complete the payment. Moreover, many customers face trust issues with online merchants due to this process, which increases the churn rate. This is where payment solutions that use minimal, issuer-based direct authentication prove successful. For instance, the Unified Payments Interface (UPI) offers a centralized platform to pay various merchants with single-step direct authentication.
Sign’Buy is an Israeli startup that provides signature-based authentication for mobile financial processes. The startup’s card-not-present (CNP) product uses a dynamic signature recognition algorithm to connect the issuer and customer for identity verification. The customer signs on the smartphone touchscreen to make a transaction, which the startup then confirms with the issuer, thereby sending a confirmation to the merchant and completing the transaction. Since this process does not require keystrokes, there are fewer chances for password leaks.
Sardine facilitates Behavior-based Fraud Detection
Most biometric authentication systems, including fingerprint and iris detection, offer one-time user verification for each session and require customer interaction. This is why continuous user monitoring is not achievable with these biometric security systems. On the other hand, behavior biometrics uses keystroke dynamics, gait analysis, voice ID, mouse use, and cognitive biometrics to identify and monitor users. Also, since it does not need any user interactions, this method is convenient for financial firms and customers.
US-based startup Sardine develops behavior biometrics-based fraud detection for neobanks. The startup’s proprietary artificial intelligence-based solution monitors users and devices for suspicious behavior, including the use of emulators, virtual private networks (VPNs), and sensor information. This allows banks to prevent identity and payment fraud as well as stop account takeovers. Sardine also provides software development kits (SDKs) for easy integration of its services into its client’s frameworks.
Discover more FinTech Startups
FinTech startups such as the examples highlighted in this report focus on blockchain, artificial intelligence, biometrics as well as open banking. While all of these technologies play a major role in advancing financial services industry, they only represent the tip of the iceberg. To explore more financial technologies, simply get in touch to let us look into your areas of interest. For a more general overview, you can download our free FinTech Innovation Report to save your time and improve strategic decision-making.