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3 Ways the New iPhone X Will Change Consumer Banking

Sep 27, 2017 10:00:00 AM |

Brent Gay

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After much anticipation, Apple has announced its iPhone X. As is so often the case with new Apple company releases, the newest generation brings more than just an updated device design. It also introduces a host of new technologies that change how many industries operate in the digital space. For the banking sector, three innovations will likely impact customer engagement and how business gets done.

Facial Recognition Capability

FaceID is Apple’s new facial recognition capability. With it, an iPhone X user can unlock their device with a mere glance. While presumably both more secure and more convenient than current TouchID log in mechanisms, FaceID has users worried. Apple argues for the innovation saying that faces have only a one-in-a-million chance of being similar while one of every 50,000 fingerprints may be similar. If true, the new FaceID technology will be far more secure than fingerprint technology. For banks, this advanced FaceID technology is particularly noteworthy. Many allowed users to view accounts with TouchID authentication, but few put enough trust in it to allow users to transfer money. Perhaps FaceID will provide the level of security needed to give banks the confidence to enable broader mobile banking capabilities.

Apple Pay

Apple’s new operating system (iOS 11) will expand Apple Pay to compete with other peer-to-peer payment companies like Venmo. Users will be able to transfer funds easily within text messages or by instructing Siri (Apple’s virtual assistant) to “send money to” a contact. When users transfer money, funds will be drawn from the card and entered into Apple Pay. The recipient will receive a cash balance on a digital Apple Pay Cash card that can be transferred to one’s bank account via a debit card or used to pay friends.

Augmented Reality

The new augmented reality (AR) feature will overlay information onto the world around us. AR could allow potential homebuyers to overlay property and mortgage details as they view a home for sale through their phone. Users could even visualize multiple screens simultaneously to share and discuss the components of their full financial portfolio with their investment banker.

If these new features prove to be all they’re promised to be, they could supercharge digital and omnichannel banking for financial institutions of all sizes. In particular, banks are watching to see how biometric authentication continues to improve because it’s a capability that could seamlessly integrate better security measures across every part of the user experience.[1] In every case, Apple is bringing financial information closer to the consumer than ever before. At the same time, they are adding new layers of security and convenience.

For an industry so reliant on security – and the perception of security – success will depend largely on how these innovations gain adoption and prove Apple’s promises to be true. We’d love to hear your thoughts on these innovations. Do you think they will change how you provide consumer banking services or how your customers use them? Let us know at @HORNE_LLP.

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Brent is an assurance supervisor in financial institutions at HORNE LLP. He serves clients in internal and external audit capacities for both securities and exchange commission (SEC) and privately-held institutions while also performing Sarbanes-Oxley testing, loan review procedures, employee benefit plan audits and financial-statement preparation.

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