Now that I have your attention. Let me be clear: I hate passwords, particularly when they are increasingly required to be longer, more complex and frequently changed. Apparently, I am not alone in this sentiment.
At a conference in 2015, a small start-up, @Pay, a low-friction mobile giving platform, offered attendees a free t-shirt in return for seeing a brief demo. I must confess that I was more interested in the t-shirt than @Pay’s product demo. The line went out the door! Here is the t-shirt.
Working from a home-office means t-shirts are staple part of my daily wardrobe. I have tons of them. None of them, however, engender such predictable responses from complete strangers than the one above. Responses range from a simple thumbs up or high-five, to an occasional, “You got that right!” Passwords do suck. I have so many to manage, I use Trend Micro’s Password Manager to ease the pain.
That’s why I am excited to see more institutions migrate to biometric forms of authentication. Dan Latimore blogged about the rapid increase in the number of US financial institutions employing biometrics within their mobile apps here.
Banks shouldn’t stop there, however. In a June 21 New York Times article, Tom Shaw, vice president for enterprise financial crimes management at USAA was quoted as saying, “We believe the password is dying. We realized we have to get away from personal identification information because of the growing number of data breaches.”
I agree with Tom’s sentiment, but if passwords are dying, it appears to be a very slow and painful death. Here’s one example of why I say this. The chart below shows surveyed likelihood of technology usage in future branch designs as measured by Celent’s Branch Transformation Research Panel in late 2015. More than two-thirds of surveyed institutions thought the use of biometrics in future branch designs was “unlikely”.
Authentication and identity management may always involve a trade-off between security and convenience, but the industry’s overreliance on personal identification information is failing on both counts.
- At ATMs – it contributes to skimming fraud
- In digital customer acquisition – it contributes to unacceptably high abandonment rates
- In the mobile channel – it contributes to its slowing rate of utilization growth
- In the branch – banks deny themselves the ability to delight customers with improved engagement options made available by skillful digital/physical integration
We’ll be looking into the topic of authentication and identity management in our next Digital Banking Research Panel survey in the coming weeks. If you’re a banker and would like to participate in this or future Digital Panels, please click here to fill out a short application