Biometric Authentication Solutions for Mobile Banking

5 November 2025

Mobile banking is convenient and increasingly favors UX – but as a result this makes strong security more important than ever. As most jurisdictions now mandate Multi-Factor Authentication (MFA), banks often use a mix of methods to check who you are.
For instance, when logging into an app like HSBC, you might use a PIN and FaceID. This confirms you know the PIN and have the phone. To approve a high-risk action, like a payment, you might need FaceID along with a text message code (SMS OTP).
In this article we look at how banks use biometrics for authentication after you have opened your account.
We won't cover the Identity Verification (IDV) / KYC — where your face is matched to your ID photo. Instead, we are focusing on biometric authentication: comparing your face captured inside the app (during login or payment) to the verified face image the bank saved when you first signed up.
If you’re looking for a comparison of IDV and KYC, check out our dedicated blog here.

Why We Focus on Face, Not Fingerprint

When we talk about authentication, we must choose a biometric that can be compared to the one taken during the initial identity check (KYC). Since the KYC step always involves a face match against your photo ID, the best authentication method afterward must also be a face.
If a bank used a fingerprint for a later payment, that fingerprint cannot be matched back to the face verified during KYC. This breaks the chain of identity assurance. The system can't confidently confirm that the person touching the sensor is the exact same person who passed the ID check. For this reason, we focus on facial biometrics as they keep the required link back to the verified identity.
For a complete guide on biometric data and the various systems that it includes, read our dedicated blog What is Biometric Data?

Two Main Types of Biometric Authentication Solutions: Local vs. Server

Local biometric systems - also known as device-bound systems, like Apple's FaceID or similar Android features, are stored and managed only on your phone.
  • Key Difference: The scan of your face never leaves your device. The check is done locally.
  • The Problems: Local biometrics must always work on top of a password or PIN. They can only be set  up once a device PIN is active. More importantly, they do not compare your face to the one captured during the bank's KYC check. They only check if your face matches the one stored on that specific phone.
  • Not Enough Proof: This means local biometrics only prove you have possession of the phone, not that you are the verified user (inherence). If someone knows your device PIN, they can skip the face check. They could even add their own face to your device's FaceID and steal funds.
Because of this, local biometrics are considered mostly as a convenience feature, not a full security feature for high-risk banking actions.
Server-side biometrics, also known as centralized biometrics and commonly grouped together as third-party systems, fix the weaknesses of local checks.
  • Key Difference: The system takes a new scan of your face during authentication and compares it to the secure template captured during KYC, which is stored on the bank’s server.
  • The Benefit: This is the only way to prove true inherence, confidently connecting the person using the app right now to the identity verified at the beginning.
For a deeper understanding of the key difference between these technologies, check out our dedicated blog: Third-Party vs Device-Bound Systems: What’s the Difference?
We’ve now established that server-side / centralized biometrics are the only system that can prove identity assurance, which they do by comparing the biometric to the one captured during the bank’s KYC check.
But within the server-side world, there is a further distinction that concerns a very important part of any biometric system: privacy.

Centralized vs. Decentralized Server Solutions

Server-side biometrics are necessary for strong security, but how the bank stores your face data matters for both privacy & compliance. Without strong privacy, banks risk unfavourable headlines and unhappy customers.
Two main architectures exist: centralized and decentralized.

The Risk: Centralized Systems

A centralized system keeps all facial data (often hashed or encrypted) on one cloud server.
Even when the data is hashed, it can be reverse-engineered to reveal the original face template. Storing all sensitive facial data in one spot creates a massive target for hackers—a single point of failure that creates huge privacy and compliance risks if there is a breach. No bank wants to be responsible for millions of exposed face templates.
The Safest Choice: Decentralized Biometrics
The safest and most advanced approach is decentralized biometrics. Keyless was one of the earliest adopters of the technology, which is delivered as part of every Keyless authentication through its patented Zero-Knowledge Biometrics™ technology.
Instead of sending hashed or encrypted biometric data to a server, Keyless splits the user’s face and their device into a cryptographic key pair on the device, and stores only the public keys on the server. This way, even if the server is compromised, the biometric data is kept safe, as the private keys never leave the user’s device.
This approach is unique to Keyless.

Summary

The best authentication system for mobile banking moves beyond simple local checks like FaceID, which only provide convenience, to server-side systems that can prove true inherence.
Among these, Zero-Knowledge Biometrics™ is the most secure and private biometric authentication solution for mobile banking. It combines the strong security of a server-side check with unmatched privacy by ensuring biometric data is never stored, shared, or seen.
Read Next
Blog
How to Prevent SIM Swapping: Why Biometric Authentication is the Better Way
In this blog, we explore how to prevent SIM swapping by replacing outdated SMS OTPs with biometric authentication. Learn why SMS is insecure, how biometrics stop SIM hijacking, and why privacy-preserving solutions like Zero-Knowledge Biometrics™ offer stronger, cross-device protection against modern fraud.
Read Now
Blog
What is Biometric Data?
In this blog, we’ll break it down simply, explain where it’s used, and why it’s both powerful and sensitive. The initial answer to the question "what is biometric data?" is simple, but the nuances between different types of biometric data are much more intricate.
Read Now
Blog
Authentication vs Authorization: What’s the Difference and Why it Matters
In this blog, we’ll break down authentication vs authorization in simple terms, explain why both are essential, and show how Keyless handles authentication in a more secure and private way.
Read Now
Consumer SolutionsWorkforce SolutionsTechnologyIndustriesResourcesCompanySupport Center
PSD2/SCA CompliantPSD2/SCA Compliant
GDPR CompliantGDPR Compliant
CCPA CompliantCCPA Compliant
FIDO2 CertifiedFIDO2 Certified
FIDO Biometrics CertifiedFIDO Biometrics Certified
ISO 27001 CertifiedISO 27001 Certified
ISO 9001 CertifiedISO 9001 Certified
ISO/IEC 30107-3 CertifiedISO/IEC 30107-3 Certified
NIST AccreditedNIST Accredited
eIDAS Module CertifiedeIDAS Module Certified
© 2025 Keyless. All rights reserved.
Cookie Settings