41% of Banks Prefer Metal Cards to Stop Authentication Fraud

America’s banks are under siege, and the enemy is invisible. Authentication-based fraud is skyrocketing, leaving financial institutions scrambling to fight back against an epidemic of stolen identities, hacked passwords and unauthorized transactions.

These are just some of the findings detailed in “To Stamp Out Authentication-Based Fraud, Banks Want Metal Cards,” a PYMNTS Intelligence and Arculus collaboration, which revealed that a staggering 87% of banks have reported an increase in credential-based fraud.

As the level of sophistication available to bad actors grows, hackers and fraudsters are exploiting every vulnerability in password-based authentication. This can frequently mean banks are left playing catch-up.

The problem is simple: passwords are obsolete. Cybercriminals, armed with stolen credentials from countless data breaches, are gaining access to customers’ accounts with disturbing ease. Phishing scams, social engineering and credential stuffing attacks are running rampant. In some cases, criminals don’t even need to steal a physical card to drain an account, they just need a victim’s login details.

Enter metal payment cards, which are being positioned as the latest weapon in banks’ ongoing arms race against fraudsters.

Metal bank cards aren’t just sleek, status-symbol cards reserved for the ultra-wealthy. The new generation of metal cards feature built-in biometric authentication and tap-to-verify technology, allowing users to approve transactions in real time. Think of it as two-factor authentication, but without the hassle of one-time codes or easily hackable passwords.

According to the PYMNTS Intelligence report, 77% of surveyed financial institutions are considering solutions like tap-to-authenticate as a powerful new layer of security.

The appeal is clear: Rather than relying on an easily stolen PIN or a hacker-breached password, customers will verify transactions with a physical card that requires their presence to function. After all, metal cards with authentication technology can act as a hard stop to many types of credential-based fraud. This added layer of security helps make it nearly impossible for cybercriminals to execute fraudulent logins or unauthorized transactions.

After all, the fight against fraud is turning into an arms race. As criminals develop more advanced hacking techniques, banks are under increasing pressure to innovate or suffer the consequences. Metal authentication cards and passwordless banking may be the only way forward in an era where passwords are more of a liability than a security measure.

As the financial industry races toward a future without passwords, security experts warn that speed is crucial. The faster banks move, the harder it will be for fraudsters to adapt and exploit new vulnerabilities.

Read more: Banks Step Up the Fight Against Stolen Credentials

PYMNTS Intelligence data finds that more banks prefer metal cards for tap-to-authenticate technology (41%) compared to plastic for the same use (25%). Banks more affected by fraud tend to have a stronger interest in metal cards and anticipate better impacts from adopting the technology.

Larger institutions drive adoption, with 69% of banks with over $100 billion in assets expressing a strong level of interest in metal cards. Add in the 23% of somewhat interested large banks, and the pool of large banks interested in metal payment cards grows to 92%.

Customers expect seamless and secure banking experiences, and delaying the move away from passwords could leave institutions lagging behind competitors that offer smoother, safer digital interactions. By proactively adopting cutting-edge security measures, banks not only protect their customers but also establish themselves as leaders in the industry.

The bottom line? If banks want to keep their customers safe, the days of relying on passwords are over. And for criminals hoping to exploit outdated security measures? Your time is up.

The post 41% of Banks Prefer Metal Cards to Stop Authentication Fraud appeared first on PYMNTS.com.