Facebanx Seeks To Become New Face Of Payment Security

By Pete Rizzo (@pete_rizzo_)

“The time is now right for biometric technology to emerge as a secure solution for mobile applications that require high levels of security, particularly payment. From a pure-payment security point of view, biometrics has already delivered significant advantages.”

Jean-Noel Georges, global program director of Frost & Sullivan, issued this statement on August 7 in response to what his firm called an “explosion in smartphone usage” and “payments done via mobile devices” in recent years.

However, this conclusion opens up an entirely new set of questions. For example, there are various competing biometric technologies, from fingerprint sensors to facial recognition software to bi-modal authentication systems that use a combination of these advances, which could become the security feature of choice for payments players and consumers.

In this light, Facebanx has emerged as a new player seeking to become the preferred solution for payments companies in the fight against fraud. Toward this end, the London-based company has developed what it calls “the world’s first fully integrated facial recognition technology” that works with “webcams, mobile phones and tablets.”

For more information on Facebanx and its innovative product, we spoke to Steve Cook, director of business development at Facebanx. Speaking to PYMNTS.com, Cook revealed which industries are already adopting the technology, and said that this time, Hollywood might really have foreshadowed the future.

PYMNTS.com: This is the first time we’ve profiled Facebanx on PYMNTS.com. Would you mind telling our readers a bit about your work in the payments industry and how your solution is geared towards helping companies that operate in this market?

Steve Cook: Facebanx was launched in 2013 and provides face and voice recognition solutions to the payments and banking industries. While facial recognition technology has been around for a while, it has only recently been at an advanced level, where the technology is now around 99-percent reliable. The technology uses algorithms based on thousands of specific points around the face, such as eyes, nose and mouth. Every human has unique characteristics pertaining to those areas. Hair features do not matter.

The use of facial recognition in particular is entering the world of eCommerce simply because of the amount of transaction fraud and money laundering taking place online. ECommerce and payment operators are looking for new innovative methods to automate their know-your-customer (KYC) processes. Therefore, facial recognition is a perfect fit and an ideal tool for verifying customers. It is the new eVerification tool that allows payment processors to authenticate transactions. Mobile banking transactions are set to overtake traditional online methods and facial recognition will be used as a key identifier.

New biometric techniques are already being used, such as fingerprinting, on the forthcoming new iPhones as a way of security on each device.

You launched Facebanx in April. So far, how many companies have signed up or expressed interest in your service?

The interest has been huge. Facebanx has come to the market at the right time. We are currently in discussions with many well-known eCommerce companies and other security sectors. For example, in additional to banking and payment processing, we have a lot of interest from online retailers, travel companies, the insurance industry and also the gambling sector. All these areas are experiencing huge levels of fraud, and facial recognition technology is being used as a way to combat it. Many payment companies are being hit too. Money laundering is a real problem.

Given that we only launched Facebanx in April, we are in the process of integrating with four operators, all in different areas. This fall, we also expect to see a number of other companies introducing our technology into their platforms. Next year is where we expect to generate real growth as more momentum gathers with the wider implementation strategies of companies adding facial and voice recognition as part of their verification processes.

If introduced with a broader screening process, face and voice recognition offers a formidable deterrent to would-be fraudsters. Biometrics is also being considered to replace passwords. For example, one of the biggest fraud issues for eCommerce companies is account takeovers. Password resets are one of the most vulnerable areas where fraudsters exploit commercial companies. Using a combination of two biometrics, such as face and voice, should minimize the opportunities for fraud.

From the videos I’ve seen, your product seems like it’s fairly intuitive from a user perspective. On the business side, how easy would it be for a payments company to integrate Facebanx security into their offerings?

The technology is very robust. Many people are unaware that it is already being used in various locations and security areas – at airport immigration and cargo security, restricted areas at venues as well as hotel check-ins. There are now some brick-and-mortar banks and retailers introducing it too. Another example is that in Scandinavia, high-street retailers are using facial recognition to verify customer purchases for goods and services using their mobile devices. Currently PayPal is also experimenting in the U.K. with mobile payments using faces without the requirement for credit or debit cards.

In the case of integrating our technology with payment companies, it is relatively straightforward. It depends on where the data is hosted, where facial recognition sits in the process of verifying customers and what platforms and devices it is required for. Not every transaction would need a facial recognition event to take place, but it could be used for larger transactions, areas of risk or circumstances where suspicious or unusual behavior is detected. It is seen as just another verification method.

You’ve said that Facebanx can successfully reduce fraud and aid anti-money laundering. Do you have any statistics to bolster this claim that you can share?

Yes, we are currently running pilots and we have recent evidence in our figures that with new account registrations, it shows around 99-percent success in identifying genuine customers. This underpins the main factor that customers are embracing this kind of technology because they are less at risk of ID theft or account takeover.

The upside for the customer is knowing that their account is safe and it would be hard for fraudsters to manipulate. However, it is impossible to know how many fraudsters have been deterred because they are quite wary of showing their faces. With facial recognition to contend with, a fraudster may be bold enough to open one false account but will be prevented from opening anymore without creating a match with a previous account. Facial recognition is seen as stopping multiple accounts, which is a fraudster’s main goal. We don’t claim Facebanx will completely stop fraud, but used in conjunction with other verification methods that we offer, such as voice recognition and ID document capture, it is a huge deterrent to any real fraudulent activity. The main objectives are to provide a range of automatic eVerification methods in order to make it much harder to cheat the system.

What’s next for Facebanx? Are you currently looking to take your business to international markets – maybe the United States – anytime soon?

We are already in discussions with several major worldwide brands, from well-known online auction sites to famous retail brands. We are also speaking with a large number of payment processors, too. One of the strongest global areas for our business is the North and Latin American markets, and we have had a lot of interest for our facial recognition technology because it fits into so many areas.

We see combining both face and voice recognition into any transaction process as being around 99.9 percent accurate, particularly for mobile banking and processing. One day, this kind of technology will replace passwords, credit and debit cards and the need for ID documents. Paying for items with your smartphone using facial recognition technology to prove who you are will become standard. It is already being trialed in several European countries and retailers are especially keen to embrace it because it is a way of authenticating customers at the sales checkout desk or online.

Even hotels are keen to use it for returning customers as a way of preventing professional bag thieves. Gaming companies as well as gambling regulators are also keen because it will help to limit or prevent problem and under-age gambling as well as minimize fraud, multiple accounts and bonus abuse. What’s next? Well. if you have seen the movie “Minority Report” with Tom Cruise, the fantasy of being recognized wherever he went, could easily become reality in our world soon. It’s not far away! Even new sophisticated billboard advertising is being fitted with CCTV cameras that will recognize your gender and age range, thus specifically targeting you with something that you might want to purchase. Yes, biometric technology is already here!