US Financial Institutions and Authentication: Digital Research Panel Series Part 5

by Zilvinas Bareisis,  Jean-Marie Ubigau, September 7, 2016
Industry Trends
Global

Abstract

This is the fifth of a series of reports based on Celent's Digital Research Panel. Celent surveyed 25 US financial institutions about their views on retail banking customer authentication and identity management.

Important changes in customer expectations, regulation, and technology are forcing financial institutions (FIs) to place renewed emphasis on authentication. This is the subject of our fifth Digital Panel, which explores the key questions below. The survey was administered in July 2016.

Selected findings of the report include:

  • 56% of survey respondents view authentication and identity management as a strategic priority of vital importance to their future.
  • Over the next 12 months, most FIs are planning to invest above historical average into authentication and identity. Customer demands for convenience and security, and rising levels of fraud are the primary drivers for investment.
  • Only 28% use biometrics today, but 60% are either actively planning or at least considering using it. 48% agreed that majority of their customers are comfortable with biometrics being used in the context of authentication.
  • Over 85% of respondents rate data analytics, fingerprint biometrics and tokenization as “extremely important” or “important” technologies to the future of customer identity and authentication.
  • 42% are very concerned about protecting against a critical data breach in a server-based approach, which might compromise credentials of many users at once.
  • Over 80% believe that in less than five years user name and password will no longer be dominant forms of log-in.

This 36-page report contains 17 figures.

“The survey results confirm that authentication and identity management are hot topics for FIs with significant changes taking place”, says Zilvinas Bareisis, a senior analyst with Celent’s Banking group and coauthor of this report. “Data analytics, biometrics and tokenization will be the key technologies driving the future of authentication. However, organizational issues may need to be addressed to ensure they don't hamper the efforts to make the most out of technology innovations.”

Celent created the Research Panel to examine financial institutions’ attitudes, progress, objectives, and priorities around Digital. We recruited panelists from our client base and from industry contacts (respondents do not have to be Celent clients to participate). Celent is accepting additional requests for membership in the panel and expects to field ongoing research with surveys roughly every two-to-three months. If you’re a banker and would like to participate in future Digital Panels, please click here to fill out a short application.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Introduction

1

 

Key Research Questions

1

Summary of Key Findings

2

Investment Drivers

4

Current State and Near-Term Drivers

8

 

Authentication Tools and Techniques

8

 

Deeper Dive into Biometrics

11

 

Other Identity Management Capabilities

12

Glancing into the Future

14

Recommendations and Closing Thoughts

18

Appendix I: Panel Demographics

19

Appendix II: Survey Instrument

20

Leveraging Celent’s Expertise

31

 

Support for Financial Institutions

31

 

Support for Vendors

31

Related Celent Research

32

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