Is Voice Biometrics Right for You?
Although companies have been working on voice biometric solutions for years, the process of authenticating people by matching their identity to their voice has yet to find its sweet spot. However, thanks to growing use by banks, insurance companies, and, increasingly, mobile devices, the technology is climbing out of the basement and becoming a must-have across industries.
"Two years ago, people were looking at the edge of the [voice biometrics] pool and saying, 'I'm not jumping in there,'" says Dan Miller, senior analyst at Opus Research. "You should enter now with confidence that the technology works. There's enough that's been learned from companies with millions of enrollees that the myth that customers don't want this or don't want to enroll has been overcome."
"The technology has reached a certain level of maturity that makes it applicable for commercial [use]," adds Matthew Storm, director of innovation and solutions at NICE Systems. "[It previously] had much higher levels of false accepts and false rejects. These numbers have now been reduced to a level that enterprises can rely on to replace their existing authentication procedures."
While consumers may have been vaguely aware that financial fraud exists, they received a wake-up call with a recent breach involving the retailer Target, in which 40 million consumers' store and debit card information was stolen. In January, another 70 million Target customers experienced the same problem. Citing data from the Consumer Bankers Association and the Credit Union National Association, the Wall Street Journal reported that the cost to financial institutions as a result of the breach was roughly $200 million.
"One of the biggest stories in the security space was Target," says Brett Beranek, solutions marketing manager at Nuance Communications. "Organizations of all types, even brick-and-mortar retailers, are going to start to have to look at ways to secure these transactions. We may see voice biometrics completely enter the customer care arena and [be] used for transactional purposes in the payments industry."
Call fraud is also staggering and on the rise. Pindrop Security, a voice biometric provider, reviewed phone fraud activity affecting financial services institutions during the first six months of 2013 and found that one in every 2,500 calls to a financial institution's call center was fraudulent, and that for every fraudulent phone call, there is a loss of 57 cents. The average potential loss from phone fraud, per financial account, was $42,546. Roughly half of all fraud calls originated from mobile devices.
While few U.S. companies publicly disclose their voice biometrics deployments, their overseas counterparts tend to be more vocal about their adoption. One of the biggest voice biometrics stories comes from Nuance's voice biometrics solutions integration with TurkCell, a mobile phone carrier in Turkey. According to Nuance, automatic identification approval can decrease call handling by 20 seconds for individuals and 40 seconds for corporate subscribers.
"North America has been sort of a sleeping giant because there are very mature, clunky authentication systems for customer care," Miller says. "Credit card issuers, [telecommunications companies], etc., seem to be entrenched in their current solutions."
However, the tide appears to be turning.
An Expanding Market
Increasingly, voice biometrics is being adopted in the U.S. by verticals such as banks, insurance, healthcare, telecommunication companies, government, and, more recently, in the consumer arena by television and smartphone manufacturers. Verint, whose clients include investment bank JPMorgan, has more than one million enrolled voice prints. Other major players include VoiceVault, Speech Pro, NICE Systems, and Voice Trust.
Nuance, which is the largest voice biometrics provider, has roughly 35 to 40 million voice prints enrolled, according to Beranek. Opus estimates that between 2011 and 2012, spending on voice biometrics climbed a whopping 74.2 percent and is projected to grow at a compounded average annual growth rate of 35 percent over the next five years.
"When you look at the problems in the phone channel, you're saving time and money [with voice biometrics, on areas] such as training reps for authenticating customers," says Matt Anthony, vice president of marketing at Pindrop Security.
Pindrop combines voice biometrics with a technology called phone printing. The solution analyzes phone audio that not only matches a caller's voice but includes origin location and type of technology used to make a call, including landlines or mobile devices.
"Phone printing is different than voice biometrics," Anthony explains. "Where the voice is saying this is a person, what a phone printing is doing is saying this is the device and this is the location of the caller. When you put voice biometrics,
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