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Biometrics may encourage Europeans to switch banks, research suggests

LogicaCMG has revealed that the outcome of a study it commissioned suggests the introduction of biometrics could lead to greater consumer confidence in switching between different bank accounts. However, critics of the research say it is flawed and subjective.

The enquiry, which spanned seven European countries, found that 57% of people would be more likely to change their current account provider if all it took was an identity card and fingerprint to establish and prove identity. In Germany this average increases to 64%, almost two thirds of the population.

The research found that 27% of Europeans would be more likely to change insurance providers and 25% would switch savings account providers to those using biometric authentication. Just over one in five (21%) Europeans would be more likely to start a pension and 17% said they would be more likely to switch mortgage providers.

In response to the research, Paul Gribbon, consultant in LogicaCMG’s electronic identity practice, said that as banks have to proliferate across channels such as digital television, the internet, telephone banking systems and physical branches, biometrics will be a key method in establishing and verifying the identity of customers.

If people are so much more likely to switch accounts when biometrics hit the high street, then banks need to prepare for this. Early adopters will be able to offer a fast-switch service, increasing market share at the expense of competitors and controlling and focusing churn to their advantage.

However, technology website The Register has published a condemnation of LogicaCMG’s research, which suggests it is biased and misleading. Citing LogicaCMG’s interest in achieving a ‘positive’ response, the website’s report suggested that the company used loaded and leading questions and out of date data in its research.