Table of Contents
Key takeaways
- Biometrics are replacing passwords as the new standard
Traditional authentication methods like passwords and SMS codes are increasingly vulnerable. Regulators worldwide are encouraging, and in some cases requiring, the adoption of biometrics (such as fingerprint, facial recognition, and behavioral patterns) as a more secure, reliable form of authentication. - Regulations are driving biometric adoption globally
Key financial regulators in the EU, UK, US, India, Philippines, Malaysia, and Australia are pushing for or mandating biometrics in banking. This is either through digital ID systems (like Aadhaar and PhilSys) or new e-KYC and strong authentication requirements. - Behavioral biometrics offer seamless security
Beyond physical traits, behavioral biometrics – like how you type, swipe, or interact with devices – provide an invisible layer of fraud detection. This improves security and user experience without causing friction. - Biometrics provide dynamic, adaptive defense against evolving threats
Unlike static defenses such as passwords, biometrics form a flexible and responsive fraud prevention system. They adapt to evolving fraud tactics and learn over time. - Biometrics are becoming a regulatory and competitive necessity
With global regulators raising requirements, financial institutions must shift to biometrics to remain compliant, competitive, and customer-friendly. Those still relying on outdated methods risk falling behind and facing increased regulatory scrutiny.
How biometrics help fight fraud
Fighting fraud can feel a bit like playing whack-a-mole. Just as you shut down one threat, another pops up. That’s why regulators around the globe are raising the bar. They’re not just asking banks to think smarter about authentication. They are nudging them toward something stronger, faster, and harder to fake: biometrics.
From fingerprints to facial recognition, and even how you type or move around an app, biometrics are becoming more than just a cool feature. They’re a very effective fraud-fighting tool. And while requirements vary by region, regulators want banks to adopt biometrics as a core part of their modern fraud prevention strategies.
Biometrics are overtaking passwords to become the standard
Biometrics fall under the ‘something you are’ category in multi-factor authentication (MFA), and that fits perfectly into current regulatory frameworks such as:
- EU (PSD2): Under PSD2 (Payment Services Directive 2), banks must use two of three elements for authentication: something you know, have, or are. Biometrics tick the ‘are’ box, making them a strong, regulator-friendly option.
- UK (FCA guidance): The FCA continues to support PSD2-aligned strong customer authentication (SCA) requirements and promotes innovative tools like behavioral biometrics to fight fraud without adding friction.
- US: There’s no overarching federal biometric law, so banks follow general privacy rules like the Gramm-Leach-Bliley Act (GLBA) and FFIEC guidance, while also complying with specific state laws, which mandate consent and data protection. As a result, banks balance federal requirements with varying state-level biometric regulations.
- India (RBI): The Reserve Bank of India backs biometric authentication through Aadhaar, the country’s national digital identity system and the world’s largest biometric ID program. It promotes the use of Aadhaar-based biometric KYC for digital onboarding. This encourages biometric-enabled mobile payments to enhance both security and accessibility.
- Philippines (BSP): The Bangko Sentral ng Pilipinas is taking strong steps to phase out vulnerable methods like SMS OTPs by June 2026. Banks are now required to implement biometric or passwordless authentication for high-risk transactions. Integration with the PhilSys digital ID system, which uses facial and fingerprint biometrics, is also encouraged.
- Malaysia (BNM): Bank Negara Malaysia mandates biometric identity verification for digital onboarding under its e-KYC guidelines. Facial recognition and liveness detection aren’t just encouraged; they’re expected for any financial institution offering digital services.
- Australia (SPF): The Scams Prevention Framework is planning to require biometric checks when accounts are opened.
Bottom line? Biometrics are quickly moving from ‘nice to have’ to a regulatory necessity. If you’re still relying on one-time or static passwords, the clock is ticking. Regulators are pushing for risk-based, adaptive authentication models where biometrics often fit best.
Behavioral biometrics boost security and improve the customer experience
Not only do biometrics boost security but they also improve the customer experience. No more clunky passwords or fragile text message codes. Forget just scanning a face or fingerprint. Behavioral biometrics (mouse movements, typing patterns, swipe gestures, etc.) offer a whole new layer of silent protection.
Even better, they work in the background without bothering the user; a win in the eyes of regulators and customers.
From static fortresses to dynamic smart defences
Strengthening traditional fraud controls is like building a big stone wall: impressive, but static. Biometrics are more like a network of smart sensors, constantly scanning, adapting, and learning.
Regulators may not yet have issued a global biometric mandate, but region by region, the pressure is mounting. If financial institutions want to stay compliant, competitive, and customer-friendly, engage with regulators and lean into smarter, more adaptive authentication.
Whether you’re working under PSD2 in Europe, complying with the upcoming Scams Prevention Framework in Australia, AFASA in the Philippines, or aligning with e-KYC mandates in Malaysia, biometrics are no longer just a “trend”. They’re quickly becoming the new normal.
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Related resources
Why financial institutions can’t afford to ignore biometrics anymore
Protecting customers from fraud with advanced behavioral intelligence
Stopping fraud before it happens: Behavioral intelligence in action
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