Despite being a relatively niche market, the wearable technology sector exceeded $2 billion in 2015 and is expected to reach a staggering $34 billion by 2020 as the industry irons out issues such as availability of NFC-capable payment terminals, supply of NFC-enabled wearables and consumer comfort with wearable solutions. While some industry experts see smartphones continuing to dominate the mobile payment process, others believe wearables will eventually overtake smartphones as the preferred payment vehicle by 2020.
With more people initialising digital transactions across a growing number of mobile channels, the value of customer verification has significantly increased. Regulators are working to ensure security and transparency in mobile transactions. The bigger challenge lies, however, in making the process as simple as possible for a wide range of customers, including both smartphone-savvy millennials and the unbanked market at the bottom of the economic pyramid, while remaining compliant with the Philippines' anti-money laundering (AML) and know your customer (KYC) regulations.
Using biometrics for KYC management in banking and financial services simplifies this process: Through automated customer recognition methods, which identify customers based on unique and extremely hard-to-counterfeit biological characteristics such as the iris/voice, fingerprints and finger vein patterns, customers can verify their identity quickly and accurately and even enjoy an easier and more secure and efficient user experience.
The Biometrics Research Group projects that implementing new biometric technologies in the banking industry can potentially cut a financial institution's operational risks by at least 20 percent over the next 10 years. In this light, financial institutions across the Philippines have started to consider ways to incorporate biometrics in their operations. Citi Philippines, for instance, launched the Touch ID Sensor authentication services for its Citi Mobile App late last year.
This year, the MFS industry will be shifting its focus from functionality to a customer-driven approach that places customers' needs and expectations at the center, as virtual currency (block chain technology), wearable tech and biometrics drive digital transformation in more financial institutions. As 2017 continues, we are positive we will see more companies leaning toward these technologies. Indeed, the future of MFS lies in being truly digital.
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