Biometrics Find Support from an Unlikely Demographic: Seniors

As it's rolled out biometric authentication for its mobile banking apps, USAA has learned some surprising things about who uses the feature.

More than 400,000 USAA customers, five of whom are over 90 years old, have opted in to use biometrics (face, voice or touch) to authenticate themselves to the company's mobile banking application.

Rick Swenson, USAA's fraud operational excellence and strategic initiatives executive, said he thought the demographic adopting biometrics would skew toward millennials, but the makeup of users has turned out to be different.

It's about half and half with the median being 35, Swenson said during a biometric roundtable hosted by the Center for the Study of Financial Innovation in London on May 11. And 15% of those in the older half are seniors over 65, he said.

Biometric authentication could be especially beneficial to older individuals, said Keith Gold, a communications consultant who formerly worked with IBM Banking and Financial Services Europe. As seniors' eyesight, hearing, motor skills and short-term memory start to wane, they might find using a password or PIN difficult on the small screen of a mobile device, he said.

Biometric authentication can be particularly advantageous for military service members, a segment that USAA focuses on. Military personnel coming back from service are sometimes injured and unable to log in in a traditional fashion, Swenson said. USAA Federal Savings Bank has 10.7 million members, mostly military members and their families.

USAA rolled out face and voice biometrics to its entire membership base in February this year. In the first 30 days after rollout, USAA had more than 200,000 customers enroll for the service and that was without advertising, said Swenson. With 4.1 million active mobile users, "in just six months we captured 10% of" mobile users, he said.

The financial institution rolled out fingerprint authentication on April 27.

According to customer feedback, fingerprint scanning and facial recognition are the preferred methods, said Swenson. "Voice is just a challenge" because it relies on a quiet background environment, he said, plus people feel silly talking to their phones.

But Daon is developing a voice biometric process that feels more natural to consumers. The provider found that consumers felt better about speaking a set of numbers into their mobile device, rather than something like "my voice is my password," said Clive Bourke, president of Europe, the Middle East and Africa and Asia-Pacific at Daon, during a separate interview at the roundtable.

The cost to develop the biometric authentication process wasn't in the millions, Swenson said, comparing it to the development of remote deposit capture (RDC) or the ability to deposit a check by taking a picture of it with a mobile device.

As more customers migrate to mobile from the Web, the bank is also seeing a reduction in the number of calls to the call center, a majority of which are about authentication, Swenson said.

Among the first 100,000 customers that enrolled in the face and voice biometric authentication, USAA only received four calls to the call center, Bourke said.

Banks all across the globe are experimenting with biometrics, with similar results. Tinkoff Bank in Russia integrated voice biometrics into its 1,000 seat call center. The bank was able to cut 40 seconds to 60 seconds off the authentication process for each one of its 1.2 million monthly customer calls, said Gold.

"Biometric identification is inevitable ... and there are significant revenue opportunities here as well," Gold said.