Facial Recognition in Financial Services: An Opportunity Amidst Scepticism
Does Facial Recognition have a place in Financial Services?
When I hear that question, I must confess a very slight shiver runs down my spine. I think of surveillance and ‘Big Brother’ and stories from scenarios where facial recognition is used for surveillance and to monitor behavior.
On the flipside, I noticed the other day when I approved a payment on my iPhone, I was not surprised to use facial recognition to authorize my payment (In fact I use facial recognition all day long when opening my iPhone without giving it much thought).
So, I guess the answer to the question is already obvious.
We hear more and more about loan applications being processed using facial recognition and I tend to wonder if I would be nervous doing that and have my facial twitches potentially disqualify me from a loan.
Sounds a bit like fiction but it is already becoming prevalent in some countries.
Ping An Puhui, a Chinese micro-lending unit of the country’s second-largest life insurer, has been using its proprietary technology to screen loan applicants.
Loan seeker’s responses to questions are studied using the technology to examine the ‘micro-expressions of the applicant to gain insights into their confidence about the loan repayment.
Since its launch in 2016, Ping An has issued over 500 billion yuan in loans, improved recovery rates and shortened its average loan-approval time from five days to two hours. In times like these, rapid turn-around and scaling on small loan requests can indeed increase inclusion for larger masses of loan applicants than would be possible in conventional ways or simply because the bank might not have enough loan officers.
Amazon Web Services uses its face recognition technology Rekognition to aid the cloud-based loan processing systems in banks around the world.
A Degree of Scepticism
On the other hand, many still feel queasy about their facial expression being judged by a robot. Others have genuine ethical concerns about how far this approach can go.
As consumers become more comfortable with authentication of identity and biometric security, the question facing many banks is what more can be done with this technology to scale services, reduce manual intervention and prevent fraud.
There are undoubtedly several ethical and cultural questions also pertaining to accuracy and bias that still need to be tackled before we see the widespread global use of this technology in loan origination.
If it proves to help in financial inclusion and actionable steps can be taken to eliminate bias, we may then possibly see an acceleration in the use of facial recognition in Financial Services.