HSBC - Howard Lake

Facial Recognition Security Hits Chinese Banks with HSBC

October 11, 2017         By: Steven Anderson

The growth of biometric security measures really shouldn’t surprise anyone at this point. After all, who doesn’t like the thought of a security measure they carry around everywhere they go, can never forget, and is so secure that they’re literally the only person who can use it aside from science fiction-esque copying or horror movie-style extraction? Recently, HSBC took a step forward on this front and brought facial recognition security measures to China.

HSBC Holdings PLC is a British banking operation that runs in several countries worldwide, and thanks to the move to bring facial recognition to its Chinese operations, became the first bank in China owned by a foreign company to offer the services.

The software in question, meanwhile, does its job by performing an initial scan, followed by some simple head movements or face feature alteration—eye rolling, blinking, swinging the head in one direction or another—chosen by the system at random. Then the system can confirm the identity of the user and the fact that the user is actually a human head, and not just a photograph like what tripped Google up several years ago.

Such measures have improved facial recognition to the point where it’s considered significantly safer than even fingerprint analysis; fingerprints have a mistake rate of around one in 50,000. This doesn’t sound all that bad until you consider modified facial recognition’s mistake rate is around one in a million incidents.

With the new authentication, customers now have the ability to transfer up to 50,000 yuan—roughly $7,543 as of this writing—to new payees using a combination of passwords and facial recognition.  Previously, such a transfer would have required physical security devices, but now it can be done using a mobile phone’s camera system.

Offering up more options for customers is seldom a bad idea; it’s the kind of thing that really draws in new customers and better keeps the old ones on hand. Granted, banks are risk-averse; they have to be. It’s ultimately part of their appeal that they’re largely the same today as they will be tomorrow. But if they don’t keep up, they run the risk of losing customers.

With millennial customers already overwhelmingly favoring mobile applications, some risk will be called for just to keep the customer base in check.