HSBC blocks £249m in UK fraud with voice biometrics

HSBC said that telephone banking fraud has been reduced by 50% since the introduction of a biometric security system that authenticates customers through their voices.

The bank said about 2.8 million customers have signed up to use its Voice ID system as demand for telephone banking increases during the pandemic. It estimates that the extra layer of security has prevented £249m of UK customers’ money falling into the hands of criminals in the last year.

When launched in 2016, the bank said Voice ID analyses voices in seconds – checking more than 100 behavioural and physical vocal traits. Since its introduction, more than 43,000 fraudulent phone calls have been identified, and £981m fraud prevented.

Kerri-Anne Mills, head of contact centre and customer service at HSBC, said: “We’ve seen unprecedented challenges as the pandemic and lockdown restrictions transformed our lives significantly and, unsurprisingly, more people have turned to online and mobile banking to take control of their finances, utilising other channels for very particular interactions.

“Voice ID has not only made telephone banking more convenient for customers accessing their accounts, but it has also been instrumental in stopping attempts at telephone banking fraud, protecting customers’ money,” she said.

“Scammers are sophisticated and it’s a constant challenge to keep ahead of them but this is promising – we’ve seen a 50% drop in reported telephone banking fraud year-on-year.”

About 14,000 customers are signing up to Voice ID each week, according to Mills.

HSBC uses voice recognition technology from Nuance Communications, which uses more than 100 unique identifiers to identify a speaker.

These identifiers include features such as speed, cadence and pronunciation, as well as the effect of physical features such as the shape of the speaker’s larynx, vocal tract and nasal passages.

Microsoft acquired Nuance earlier this year for $19bn, its second-largest ever acquisition. According to a recent forecast from Statistica, the global voice recognition market is forecast to grow from $10.7bn in 2019 to $27.16bn by 2025, a compound annual growth rate of 16.8%.

Financial services firms will have to invest heavily in the technology, as customers expect protection from them amid rising fraudulent activity. Recent research released by BAE Systems’ cyber security wing, BAE Systems Applied Intelligence, revealed that one-fifth of UK consumers have been targeted by cyber criminals or fraudsters during the pandemic.

More than a quarter had seen an email hoax relating to Covid-19 and 20% had been targeted in SMS, or smishing attacks. Average losses to consumers clocked in at £866.

Over half (54%) of consumers surveyed said they believed it was the job of their bank to protect them, and 52% said they would like banks, credit card providers and other financial institutions they dealt with to provide more guidance on how to be better protected. Over 80% said protection from cyber crime would be a factor when changing or choosing a finance company to work with.