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How reliable is biometric data in tightening bank cyber security?

Multi-factor authentication (MFA) is one important pillar of cyber security in banking. Financial services interests have realised that requiring consumers to provide their personal information before processing transactions can deter data breaches.

And it has worked. Despite the numerous cases of successful high-profile hacking in the past 10 years, involving prominent names in the industry such as JPMorgan Chase and SWIFT, Fortunly believes more people would have been defrauded had there been lax customer authentication policies in place.

However, cyber robbers have managed to exploit a weakness in text-based MFA. In February, The Telegraph reported that Metro Bank and some smaller financial institutions were hacked. The attackers were able to get their hands on the codes sent to customers by capitalising on a flaw in SS7. Telecoms rely on this set of protocols to exchange SMS text messages and calls between one another anywhere in the world.

Clearly, more secure MFA is necessary to protect the integrity of financial services organisations as custodians of sensitive data of billions of people on the planet. This is where biometrics come in.

Unlike texted codes, pieces of biometric data are harder to steal since they are unique to individual consumers. Then again, biometrics are not equal and may not provide different levels of protection.

Fingerprint

Fingerprints, as well as finger-vein patterns, are being used by banks to authenticate customers at brick-and-mortar branches. Scanners for both biological characteristics can deliver fast, accurate results, which allow frictionless in-building and ATM transactions.

The availability of scanners in consumer electronics makes fingerprint authentication a feasible solution to boost cyber security. In fact, it has been adopted by the Royal Bank of Scotland (RBS) for mobile banking. With just one touch, fingerprints can authenticate users to complete card payment transactions made via RBS’s mobile apps.

Face

What is advantageous about facial features as biometric details is that they are hard to cheat. Unlike fingerprints that could be reproduced with tape, the distinct qualities of a face could not in any way, shape or form be mimicked.

Voice

Voice biometric technology is sophisticated, for it considers up to 80 of the distinguishing vocal-tract attributes of a person. As biological data, the voice is actually more unique than the fingerprint.

Citibank has been using voice authentication since 2016. The consumer arm of the Citigroup analyses the voice pattern of a caller based on a pre-recorded voice print to help detect identity thieves more accurately.

Online Behaviour

Signatures, keystroke patterns and website browsing tendencies are some peculiar customer identifiers being tested by some banks to prevent fraud. Behavioural biometric tech may require a ton of historical data to be considered helpful, but its readings are claimed to be 99% accurate.

Conclusion

Ultimately, biometrics are imperfect. Physical characteristics and individual behaviours can change, so they can’t be reliable 100% of the time. Nevertheless, biological data is a potent tool for cyber security all banks should adopt to stay ahead in the game of cat and mouse they play with hackers until the next MFA innovation comes along.

Specialised banking license in Lithuania by Yuliya Barabash

Lithuania and mainly its capital Vilnius became a new flagship of European banking services centres. Favourable regulatory and tax environment, excellent infrastructure, fast Internet, cheap office space and the ability to select high-quality budget personnel make Vilnius attractive for both large international banking institutions and FinTech startups.

Moreover, in 2018, the Central Bank of Lithuania won the Central Banking FinTech RegTech Global Awards for its comprehensive approach to regulating the provision of financial services, namely in creating a favourable environment for the development of financial technologies and openness for financial service providers. Are there any other arguments for choosing this jurisdiction for the Fintech project?

In this article we will talk about a unique offer – a specialised banking license in Lithuania with reduced requirements for authorised capital – what is it about? How to get such a banking license? What functionality does this type of license cover?

What is a specialised bank?

Specialised banking license is a concept introduced in Lithuanian legislation from January 1, 2017 as a type of universal banking license. The main difference of this type of license is the requirement for the size of the authorised capital. The standard size of the authorised capital for the European Bank is 5 million Euros, while the Specialised banking license in Lithuania is issued for a company with the authorised company only 1 million Euros. It significantly simplifies the creation of your bank, isn’t it?

Functional authority

The terms of reference that this license gives its owners are very extensive – a company with a specialised banking license has the right to provide the following services: receiving deposits and other repayable funds; lending (including mortgage lending); financial leasing; payment services; issuance and management of travellers checks, bank checks and other means of payment; providing financial guarantees; financial inter-mediation (agent activity); money management; credit rating services; safe rental; currency exchange (cash); issue of electronic money.

The only functional difference between a specialised and a universal banking license is the presence of restrictions on providing investment services, management of investment and pension funds, and other similar activities. However, in practice for these purposes an alternative company is registered with the subsequent receipt of a permit for investment activity and asset management of third parties.

Conditions for obtaining a banking license

The times for obtaining a specialised banking license in Lithuania is another incredible advantage of this type of service. With such broad powers, a company licensing takes from 6 to 12 months after providing all of the necessary documentation. Capital requirement, as mentioned above, is only 1 million Euros.

Also, to obtain such a banking license, you will need to confirm the economic presence of your company in Lithuania: you need a real local office, the minimum number of bank management staff must be 10 people, but at least one of them must be a resident of Lithuania and speak Lithuanian.

Brexit and Lithuanian specialised banking license

Brexit made adjustments even to the functioning of well-known FinTech startups – the “certification” of companies’ activities became an issue. What does it mean?

International financial companies licensed in the UK are looking for the possibility of licensing their services in one of the EEA countries to provide services to residents of the entire zone. For these purposes a specialised bank in Lithuania is suitable like no other – a wide range of powers, comfortable licensing terms, minimal authorised capital. Who would you think in the forefront received a specialised banking license, rather than the famous financial institution Revolut? It’s worth to consider.

Our team is happy to offer you not only a full package of services for obtaining a specialised banking license in Lithuania, but also assistance in opening corporate and segregated accounts, obtaining membership in SEPA and SWIFT, connecting to Visa/Mastercard, as well as other legal support issues of your project. Get an advice on establishing your Specialised bank in Lithuania today. SBSB International Law Company – your business, our concerns.