What is Biometrics
Biometrics is a method of data security used to prevent data breaches, such as credit card hacks. Biometrics uses any data this is physically unique to an individual that can prove identity, such as a fingerprint, rather than relying on passwords or PIN codes that can be more easily hacked.
As the world starts relying more heavily on technology and sharing information electronically, data breaches are increasingly common. Well-known examples of corporations that have been targeted by hackers over the past few years include Target and Home Depot. Biometrics is one method of counteracting these breaches.
BREAKING DOWN Biometrics
One common method of employing biometrics is the use of fingerprints as identification. This system can be used in more high-tech or high-security situations, but it has more recently been adapted on the individual consumer level. For example, Apple was the first major phone manufacturer to implement a fingerprint login system, starting with its iPhone 5s, and other companies followed soon after. Other systems of biometrics include iris or retina scans and voice recognition software.
Biometrics and Finance
Since so many people rely on credit cards, online banking and apps to transfer payments, it's essential to employ the use of techniques such as biometrics to prevent hacks, breaches and fraud. Many banks and financial institutions use the technology inherent in newer phones by creating apps that require fingerprints to access data, and their individual biometrics systems advance as the mobile technology advances. Customers can access secure banking information at the press of a finger.
More recently, companies have begun to invest in more varied forms of biometric technology for the mass market. EyeVerify is in the process of developing systems that will allow participating companies, which currently include Wells Fargo and Sprint, to use retina scan technology to secure customers' account information. Another company, Nymi, developed ECG-reading bracelets that detect a person's heartbeat, synchronize it with a digital device, and use that data to log in to a secure network through Bluetooth. Companies involved in funding this development include MasterCard and Relay Ventures.
Investing in Biometrics
The promise of using data unique to each person in order to keep information safe is an attractive idea to financial investors, since biometrics is synonymous with enhanced security. Biometrics is an evolving technology, and it holds promise for the future. However, if you're considering investing in a company and are taking into account its use of biometrics, be sure to research the exact technology in use. Some forms of biometrics are more secure than others; some companies have more intelligent systems than others. It is worth looking into the company's history to see if the technology has ever been subject to controversy or even has been breached in the past. You should also take into account how well the particular biometric technology functions in the context of the company's operation.