February in review: the top finance stories this month
Selfie ID checks, Chip and PIN turns 10 and banking’s Uber moment - ClearScore rounds up this month's top finance stories
From astronauts to politicians, it seems everybody loves a selfie. And for MasterCard, selfies are set to replace passwords to verify online payments. The system, being introduced this summer, still requires customers to fill in card details, but uses a selfie or fingerprint for further authentication. Some experts believe this will cut down fraud, however others are more sceptical, suggesting the possibility of spoofing the system using photographs. MasterCard have stated that asking users to ‘blink’ in front of the camera will limit this, along with its other security processes.
Not only can you now pay using facial recognition, but one bank is using biometric technology to calculate the risk of credit applicants. Artificial intelligence algorithms analyse your reactions to different financial scenarios, revealing how you feel about finance and risk. You can check out your own reactions and get your money report using the tool here.
The increasing use of biometric technology this year coincides with the ten-year anniversary of Chip and PIN. In those ten years, spending on credit and debit cards has jumped from just over half of total spend in 2006 to 78.5% in December 2015, showing just how comfortable we are using our cards to pay. Chip and PIN was a major move away from signatures, and has achieved its aim of reducing counterfeit and stolen card fraud.
3 million young adults living at home
In property news, it is the the tech-savvy generation who are struggling the most. According to the Office for National Statistics, more than 3 million young adults are living at home with their parents, the highest number in 20 years. With rising house prices and stagnant wages, young people are renting for longer and delaying buying a house. But we know from our research that 1.2 million young adults are jeopardising their chances of getting on the ladder by missing small bills. Nearly a third of this age group has been rejected for a financial product like a mortgage because they missed a payment, which on average totalled just £7.60.
Banking’s ‘Uber moment’
Banking is having its ‘Uber moment’, the former chief executive of Barclays has stated. In an encouraging call for change, the Open Banking Working Group has announced it is developing an industry standard for banks to share their customer data. When the standard is launched, you will be able to empower any financial services provider to access your accounts, meaning you can easily compare banking products and switch more easily – no more photocopying bank statements. The theory is that this will increase competition and offers of new current accounts, saving deals and mortgages.
It’s brilliant to see that financial services are using tech to help their customers, and that bank data is becoming more open. At ClearScore we have a strong belief that consumers should be given the power to understand their finances and the ability to shop around. We’re excited to be part of the movement towards freedom of data and power to the consumer.