Two Factor Biometric Authentication to Prevent Bank Fraud in Africa



There were 503 cases of financial fraud in the 1st half of the year 2012 (valued at $2.0 billion) reported across the African continent. Nigeria, Kenya, Zimbabwe and South Africa make up 74 percent of all fraud cases reported in Africa. While fewer cases are reported in South Africa, the overall value of these cases is far greater in Nigeria. Here are some recent examples of bank fraud in various African nations:

·         RTGS and EFT fraud, cash theft, asset misappropriation and credit card fraud are highest in Kenya, which is said to be a relatively mature financial market compared to Uganda and Tanzania.

·         Uganda, however, tops the list of fraud cases perpetuated through cheques, with 50% of cheque related fraud reported to be happening in Uganda compared to Kenya’s 44% and Tanzania’s 14%. Uganda also leads in mortgage, accounting, and financial statement fraud.

·         Nigeria, Zimbabwe, Kenya, and South Africa recorded the highest cases of fraud, making up 74% of reported cases in the entire African continent.

How is Banks Strengthening their Anti-Fraud Defense Mechanisms?

African banks have become more aware that criminals target worldwide banking organization customers asking for personal information which is subsequently used for fraudulent means. As a result, most banks decided to make financial transactions more personalized and secure for account holders and employees by implementing stronger identification protocols such as two factor biometric authentications. As a result, each a time a customer or bank employee accesses an account or authorizes a transaction they must provide a biometric credential for identification.

Single-Factor vs. Two-Factor Authentication

Most African banks that have implemented biometrics for customer or employee identification prior to conducting a transaction deploy “single-factor” or “unimodal” biometric systems where you have to provide only one form of biometric credential. Even though the use of unimodal biometric systems offer  authentication security, more African banks are now evaluating “two-factor authentication” which requires end users to provide two forms of biometric credentials prior to account access or performing transactions. With two factor authentication, even if one form of biometric gets compromised or spoofed, the other form provides an extra biometric authenticator, as both forms of biometrics are required for identification. Two factor authentications can be implemented for both customer and employee identification to ensure that each person involved in a transaction is not only accurately identified, but a concrete audit trail is also created to keep an accurate history of activities.

Why is Two-Factor Authentication Needed in the African Banking and Financial Service Industries?

When it comes to banking and financial transactions, accurate verification is vital. Knowing that a person is who they say they are is crucial in protecting customer identities from being compromised by criminals to commit bank fraud. At the same time it is also important to eliminate unauthorized internal access to sensitive financial information. According to various African banking fraud investigation institutions, data indicates that between November 2012 and April 2013 alone, a total of $11.2 million was stolen. Of this, only $4.05 million was recovered. After such incidents a number of financial institutions in Africa have adopted biometric technology to curb fraud. However, after noticing some incidents of manipulating a single-factor biometric identification system through spoofing (where one person successfully masquerades as another by falsifying their identity thereby gaining illegal access to an account), many banks has decided to switch and use two factor biometric authentication. Two factor biometric identification technologies can help banks and financial institutions in the authentication process and has become nearly a de facto technology standard due to increased incidents of identity theft, spoofing, forgery, and fraud. Two factor biometric authentication requires an individual (whether it is customer or employee) to provide two forms of biometric to authenticate themselves. Consequently, banks can also ensure an audit trail is kept on the server for internal security purposes which in turn helps increases accountability of both the customers and employees.

What Kind of Two Factor Biometric Identification Solutions are Available on the Market?

In order to support the growing demand for two factor authentication, some biometric identification vendors have designed hardware that supports two biometric modalities  capable of simultaneously performing two factor authentications. In addition to supporting two factor biometric authentications with a single biometric scan, some biometric technology also features sophisticated anti-fraud “liveness” detection through the use of vascular biometrics that requires live detection of blood flow to eliminate any perpetrators attempting to spoof a system and ensure 100% identification accuracy.


Benefits of Using Two Factor Biometric Authentication


There are huge benefits for consumers if their accounts are protected through the use of two factor biometric authentication whether it is fingerprint or finger vein— or even a combination of both. Two factor biometric authentication technologies will help to minimize bank fraud and help protect consumers against identity theft. From a bank’s point of view just think of the time and money saved at call-centers if the process of automatic password resets included biometric screening — it would deter criminals from attempting to defraud in the first place!



Biometrics is slowly supplanting traditional customer and employee identification credentials as a technology that is more secure and a much stronger tool to prevent bank fraud. In addition, the use of two-factor authentication has dramatically improved anti-spoofing safeguards and deterred criminals from attempting to perform fraudulent activities. Using biometrics and other methods of checks and balances may in fact thwart incidences of identity theft before they happen at financial institutions.


Author Bio



Mohammad Shahnewaz is a Senior Digital Marketing Specialist at M2SYS Technology and an occasional blogger. He is passionate about writing various government and enterprise biometric identity management technology adoption related topics and the changes it brings on the general people’s lives.





Thanks & Regards

Mohammad Shahnewaz
Sr. Executive – SEO, SEM, PPC
Business Development & Interactive Marketing Dept.
c @ +88 016 83933806
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