The race to biometric banking is on - which Australian bank will be first

Australian customers are demanding more from their banks – more convenience, better security and better access to banking services. In response, banks are dipping their toes in biometric authentication, using facial recognition and fingerprint technology through mobile banking apps but the race is now on to see which Australian bank will be the first to fully transform to biometric banking.

China is already setting the benchmark. New research shows that China's biometric banking market is expected to grow from USD$1billion recorded in 2024 to USD$5 billion by 2035, a compound annual growth rate of almost 16 percent. Major banks such as the Industrial and Commercial Bank of China and the China Construction Bank are already actively incorporating biometric technologies to elevate customer service and improve security.

Singapore is another market that is embracing biometric banking. For example, one of Singapore's 'Big 3' banks has replaced traditional authentication methods with specialised HID Lumidigm fingerprint technology that can capture difficult fingerprints (wet, dry, dirty, oily or damaged) in challenging environments such as direct sunlight, darkness, and hot or cold weather that impact most fingerprint scanners. This technology can match fingerprints with acute accuracy and includes spoof detection capabilities.

These use cases point to the type of advanced biometric solutions that could become a game-changer for Australian banks, combining sophisticated security with an enhanced customer experience.

Why Australia is ready

Security is the primary driver of biometric banking adoption in Australia. Business and personal banking customers are acutely aware of rising security and privacy risks and are looking for solutions that offer greater protection combined with ease of use. Biometric authentication answers both of these needs.

In addition to security and customer experience, Australian demand for biometric banking is being fuelled by the rapid evolution of AI that supports the expansion of digital transactions. For example, the use of smartphones and online platforms for banking, including major transactions such as home loan applications, will continue to surge.

The shift to a cashless society and the Australian Government's commitment to investing in technologies that help improve national productivity are other drivers for biometric solutions in the banking sector.

Biometrics as core banking infrastructure

Australian consumers are already familiar with biometrics at a surface level – unlocking smartphones, verifying mobile payments, or logging into banking apps with Face ID or fingerprint scans. But biometric banking goes deeper, with the capability to underpin core in-branch services, and provide greater levels of security than keycards, PINs, passwords and physical documents.

This technology can work in harmony with automated banking solutions to streamline customer onboarding, account access, and loan processing. From a security perspective, it adds a powerful additional layer of protection. Biometric credentials are much harder to steal, forge or share than traditional forms of identification or authentication.

Empowering business and personal banking customers to fast track authentication processes through biometric banking also frees up banking employees from time-consuming identity checks and lets them focus on higher-value advisory work.

Privacy is paramount

Privacy concerns will inevitably follow the introduction of any biometric authentication solution. Australian banks must ensure that biometric data is collected, stored, and processed in accordance with Australian Privacy Principles, and global best practices around consent, transparency, and data minimisation.

Many biometric authentication systems now use on-device or cloud-based encryption to ensure that sensitive data is not centrally stored or easily compromised. However, transparency in how biometric information is used, and a clear articulation of value to the customer, will be key to gaining and maintaining public trust.

The future of Australian banking is biometric

The rise of biometric banking is not just a technological upgrade – it's a strategic shift. As banks continue to modernise legacy infrastructure and move toward smarter, data-driven service delivery models, biometrics will play a key role in enabling personalised, secure, and efficient customer journeys.

For banks that are exploring digital branch models or hybrid customer service environments, biometric authentication offers a consistent and scalable foundation for compliant identity management across both physical and digital channels.

Within the next 12 months, we can expect to see early deployments of in-branch biometric systems in Australian banks, particularly among tier-one banks and innovation-led regional institutions. This will likely begin with facial recognition or fingerprint verification at key service points and extend to integrated solutions spanning onboarding, loan applications, and high-risk transaction verification. Within the next two years, biometric banking will likely become more prevalent in Australian banking.

One thing we do know is that the global momentum behind biometric banking is gaining pace. The question remains of which bank will be the first to adopt this next evolution of banking in Australia.