Legal Frameworks for Biometric Authentication in Financial Transactions

Abstract

Biometric authentication has become an integral part of financial transactions due to its enhanced security features and ease of use. However, the increasing reliance on biometric data raises significant legal and privacy concerns. This paper explores the current legal frameworks governing biometric authentication in financial transactions, focusing on international regulations such as GDPR and BIPA, as well as country-specific laws. The analysis highlights inconsistencies in global regulatory approaches, challenges in data privacy, storage, and cross-border transfers. Case studies from the U.S., EU, and India are used to examine the real-world implications of these laws. Emerging threats, including deepfakes and synthetic identities, expose the gaps in current regulations. The paper concludes by offering recommendations for harmonizing global standards, enhancing data privacy protections, and strengthening enforcement mechanisms to address these risks.