The global fintech landscape is evolving rapidly. While investors have become more cautious, the demand for secure, digital-first financial experiences continues to accelerate. Rather than a paradox, this moment highlights a dual challenge: ensuring robust security for every transaction while keeping customer experiences fast, intuitive, and fully digital.

With fintech revenues projected to grow three times faster than traditional banking, the race is on.

However, neobanks and digital payment platforms are no longer just competing on features; they are competing on trust. Their greatest challenges are now fundamental: achieving profitability, navigating global regulations, and defending against a relentless wave of sophisticated fraud.
(Softjourn, Redefining Resilience: The Top Challenges Confronting Neobanks)

In this high-stakes environment, biometric verification has evolved from a security feature into a core strategic technology. It is the key to solving the industry's trilemma: delivering frictionless user experiences, building fortress-like security, and driving scalable growth.

Here are the five ways this technology is reshaping the future of finance.

1. Perfecting the First Impression with Seamless Onboarding

The digital onboarding process is a neobank's front door — but for many, it's a leaky bucket.
Cumbersome Know Your Customer (KYC) requirements often create friction that drives potential users away.
Studies show that up to 40% of users abandon onboarding if it’s too complex or time-consuming — a critical pain point in an industry where acquisition costs remain high.
(Signicat, The Battle to Onboard)
(Uptech, Design Strategies for Neobanking Apps)

In a market where user acquisition costs are a major barrier to profitability, losing nearly half of your prospects at the final step is unsustainable.

Biometric verification transforms this liability into a competitive advantage.
By allowing users to scan an ID document and take a selfie — verified through AI-powered liveness detection — neobanks can confirm identity in seconds.

This automated process eliminates tedious manual data entry and dramatically reduces friction, leading to up to a 30% increase in customer conversions
(Softjourn, Redefining Resilience: The Top Challenges Confronting Neobanks)
and ensuring that over 95% of legitimate users are approved on their first attempt.

By securing the digital front door, biometrics directly improve a neobank’s unit economics, optimize onboarding efficiency, and pave the way for sustainable, profitable growth.

2. Eradicating the Threat of Account Takeover (ATO)

Once a customer is onboarded, the battle shifts to protecting their account. Account Takeover (ATO) fraud has become the top enterprise security concern, with attacks on the fintech and finance sector surging by an alarming 122% year-over-year.
(Sift Digital Trust Index Q3 2025)

This explosion is fueled by AI-powered tools like deepfakes and synthetic identities, which are now widely available as part of “fraud-as-a-service” kits.

Legacy authentication methods like passwords and even SMS OTPs are no match for these modern threats.
Biometric authentication provides a robust defense by verifying who the user is, not just what they know or have.

Advanced systems with liveness detection are specifically designed to defeat AI-driven attacks by analyzing subtle cues to distinguish a live person from a photo, mask, or deepfake.
In this AI arms race, only an AI-powered defense can win.
(Ancient Global: Why Fintech Is Embracing Passwordless Authentication)

The visual comparison below makes the superiority of biometrics clear:

3. Enabling Frictionless, High-Trust Payments

The market is crying out for a passwordless future.
Frustration with forgotten passwords leads to 33% of online shopping carts being abandoned, and 60% of users have left a service entirely due to difficult authentication.
(JumpCloud, Passwordless Authentication Adoption Trends)

Biometrics are the key to unlocking this future, making payments faster, more convenient, and more secure.

Replacing failure-prone OTPs with device-based biometrics can increase transaction success rates by 2–3 percentage points, a massive gain at scale.
(The Economic Times, Digital payments companies see jump in transaction success rates via new two-factor authentication)

Furthermore, the visible security of a fingerprint or face scan builds profound user trust.
With 62% of consumers abandoning transactions over security fears, this enhanced confidence encourages more frequent use of digital payment platforms, driving higher transaction volume and revenue.
(Ancient Global, Why Fintech Is Embracing Passwordless Authentication)
(Sift, Payment Fraud Q1 2025 Report)

4. Mastering the Global Compliance Maze

Neobanks operate in a complex web of global regulations, most notably Europe’s Payment Services Directive (PSD2)and its mandate for Strong Customer Authentication (SCA).
(Visa – Understanding Strong Customer Authentication)

SCA requires authentication using at least two of three factors: Knowledge (what you know), Possession (what you have), and Inherence (what you are).

Biometrics are the gold standard for the Inherence factor, explicitly recognized by regulators as a highly secure and compliant method.
(Mastercard – Strong Customer Authentication (SCA) Overview)

For fintechs with global ambitions, adopting a best-in-class biometric system is a strategic move that future-proofs their platform for compliance in multiple jurisdictions.

It turns a regulatory burden into a driver for technological modernization, as a seamless face scan is a far better user experience than typing in passwords and OTPs.
(Visa – Strong Customer Authentication Guidelines)

5. Driving Profitability and Building Lasting Loyalty

Ultimately, every technology investment must be justified by its business impact. Biometric verification delivers a powerful return by directly addressing the core challenges facing neobanks.
(Softjourn, Redefining Resilience: The Top Challenges Confronting Neobanks)

It slashes fraud losses, which can cost businesses over 7% of their annual revenue.
(TransUnion, Top Fraud Trends Report)

It lowers operational costs by eliminating expensive password resets. And it increases top-line revenue by boosting conversion and transaction success rates.
(The Economic Times, Digital Payments Companies See Jump in Transaction Success Rates via New Two-Factor Authentication)

Beyond the numbers, biometrics build the trust that is the currency of the new fintech economy.
A secure and seamless experience is what converts a casual user into a primary account holder.
(Ancient Global, Why Fintech Is Embracing Passwordless Authentication — A Revolution in Security and User Experience)

In an era where trust is the most valuable asset, biometric verification is the foundational technology for building it.

How Oz Forensics Secures the Future of Fintech

Navigating this new landscape requires proven, AI-driven technology.
Oz Forensics delivers advanced biometric verification solutions that empower fintechs and neobanks to thrive securely and efficiently.

Our industry-leading liveness detection, available in both active and passive modes, ensures that real users — not photos, masks, or deepfakes — are verified during onboarding and authentication.
Combined with biometric facial matching, this creates a seamless, fraud-resistant identity journey.
(Oz Forensics Liveness Detection Overview)

Oz already serves some of the largest banks and fintechs in the world, indirectly through trusted partnerships such as Unico IDTech, which supports major institutions including leading Brazilian banks and digital players.
While client names remain confidential, Oz’s technology plays a pivotal role in securing millions of financial transactions every day.

Together, these solutions help neobanks and payment providers build secure, compliant, and frictionless customer experiences from day one — boosting conversions, reducing fraud, and reinforcing the trust that drives digital finance forward.

Ready to build the next generation of secure and seamless fintech?
Contact Oz Forensics today to schedule a demo and see our solutions in action.