ID Finance, the emerging markets fintech company, is incorporating behavioural biometrics into its AI-based fraud scoring engine to eliminate fraud, boost loan approvals and reduce the incidence of non-performing loans.
The behavioural biometrics system studies the unique typing and behavioural patterns users display during the loan application process to capture a range of patterns. These include mouse movements, to how fingers interact with a keyboard. The biometrics record patterns such typing speed, typos, flight time between keys, keystroke depressions, as well as the patterns from actual input.
“The six-month pilot of our behavioural biometrics system has shown enormous potential. It works by learning and understanding borrowers’ interactions with keyboards. And it uses these movements to establish a user’s unique pattern of behaviour as a basis of authentication,” explains Ekaterina Kazak, Chief Risk Officer, ID Finance.
“Any deviation from normal usage patterns will raise a red flag even if a user’s password and username have been input correctly. Behaviour patterns cannot be faked and behavioural biometrics offers one of the strongest forms of authentication. We are even considering replacing user passwords with this data,” continues Kazak.
The behavioural biometrics system was developed in-house by ID Finance’s team of data scientists, risk analysts and developers. The pilot program operated at an accuracy level of 97.6 per cent and has now been rolled out to all seven markets of operation. Over time ID Finance expects the accuracy level to increase as the system gathers more data and continues to learn about its users.
ID Finance is also working on developing the technology to extend the system to cover mobile keypads and touchscreen devices. It will capture patterns on such as the amount of pressure applied to the screen and how quickly fingers swipe and type.
Boris Batine, co-founder and CEO, ID Finance comments: “We are always looking at ways to minimise risk. Our biometrics system has simplified the loan approvals process without compromising on security and in fact, stops crime before it happens. The increased security has strengthened our relationships with customers and as the technology is passive, there has been no impact on the customer experience.”
Across all of ID Finance’s businesses the financial impact of the behavioural biometrics tool is an estimated $2.8m for 2018 based on preliminary results of the pilot and company growth projections.
Analysts at market research company Technavio forecast that the global behavioral biometric market will grow at a compound annual growth rate of 17.34% between 2016 and 2020.