What Are the Benefits of Biometrics and Passkeys on Financial Accounts?
Updated July 10, 2026 · SmartRates Editorial Team
⚡ In short
Biometric authentication (fingerprint or face recognition) and passkeys are both designed to replace or supplement traditional passwords with credentials that are harder to steal remotely — a passkey is cryptographically tied to a specific device, and biometric data is generally verified locally on the user's device rather than transmitted to or stored by the bank itself.
📌 Key facts
- Passkeys use public-key cryptography under FIDO Alliance standards and are tied to the specific device or account where they're created
- Biometric verification (fingerprint, face recognition) is typically performed locally on the device, not by transmitting biometric data to the bank's servers
- Both are designed to resist phishing better than a traditional password, since there's no password that can be typed into a fake site
- Losing a device generally requires re-establishing a passkey or biometric credential on a new device, following the bank's account recovery process
🏛️ Official sources
How biometric login works on a banking app
When a banking app uses fingerprint or face recognition, the biometric scan is typically processed and verified by the device's own secure hardware, and only a confirmation (not the biometric data itself) is passed to the app or bank — meaning the bank generally never receives or stores the actual fingerprint or facial scan.
How passkeys work
A passkey is a credential based on public-key cryptography, standardized by the FIDO Alliance, generated and stored securely on a specific device (or synced across a user's devices through their device ecosystem). Logging in with a passkey involves the device proving possession of the private key without that key ever being transmitted over the network, unlike a password, which is typically sent to the server to be checked.
Why both resist phishing better than passwords
A phishing attack that tricks a user into typing a password into a fake website can capture that password for reuse elsewhere. Because a passkey is cryptographically bound to the legitimate website's specific domain, it generally can't be used to authenticate on a fraudulent look-alike site, and because biometric verification never transmits the raw biometric data, there's no reusable secret for a phishing site to capture the way a typed password can be captured.
What happens if a device is lost
Because a passkey or biometric credential is tied to a specific device, losing that device generally requires setting up a new credential on a replacement device, following the bank's identity verification and account recovery process — this is a different recovery flow than resetting a forgotten password, since there's no password to simply reset via email.
Multi-factor authentication context
Biometrics and passkeys are often used as one factor within a broader multi-factor authentication setup, sometimes combined with a PIN, a device-level lock screen, or an additional verification step for higher-risk actions such as adding a new payee — the specific combination of factors required varies by bank and by the type of action being performed.
Bank-specific implementation differences
Not every bank or banking app supports both biometrics and passkeys, and implementation details — such as which biometric types are supported, or whether a passkey can sync across multiple devices — vary by provider and by the device operating system, so available options depend on the specific bank's app and the user's own device.
How this fits into overall account security
Strong authentication methods like biometrics and passkeys address the login step specifically, complementing — rather than replacing — other account security practices such as reviewing what third-party access has been granted to a linked account, since a secure login doesn't by itself control what a separately authorized app can access.
Why banks have adopted these methods more broadly
Financial institutions have increasingly adopted passkey and biometric support as phishing and credential-stuffing attacks (reusing stolen passwords from other data breaches) have grown more common industry-wide, since these newer authentication methods remove the reusable, typeable secret that both of those attack types depend on.
Frequently Asked Questions
Does a bank ever receive or store a user's actual fingerprint?+
Generally no — biometric verification is typically processed locally on the device's secure hardware, and only a pass/fail confirmation is communicated to the app or bank.
Can a passkey be used on more than one device?+
It depends on the device ecosystem — some platforms sync passkeys securely across a user's own devices, while others tie a passkey to a single device only.
Is a passkey more secure than a password?+
Passkeys are generally considered more phishing-resistant than passwords, since the credential is cryptographically bound to the legitimate site and never transmitted the way a typed password is.
What happens to a passkey if a phone is lost?+
A new passkey generally needs to be established on a replacement device, following the bank's own identity verification and account recovery process.
Do all banks support both biometrics and passkeys?+
No — support varies by bank and by the app's specific implementation, so available authentication options depend on the individual provider and the user's device.
Are biometrics and passkeys the same as multi-factor authentication?+
They can serve as one factor within a broader multi-factor setup, which may also include a PIN or additional verification steps for higher-risk account actions.
Why are banks moving toward these methods instead of passwords alone?+
Rising phishing and credential-stuffing attacks that exploit reusable, typeable passwords are commonly cited reasons the industry has shifted toward authentication methods that don't rely on a reusable secret.
Is a fallback password still available if biometrics or a passkey fail?+
Most banking apps retain a fallback login method, such as a password or PIN, as a backup in case biometric hardware or passkey authentication is unavailable on a given device.
Do biometrics or passkeys work the same way on a computer as on a phone?+
The underlying standards support both, though availability depends on whether the specific computer has compatible biometric hardware or a passkey manager set up, which is more consistently built into modern smartphones.
Does enabling biometric login disable the option to use a password instead?+
Generally no — most apps keep the password or PIN option available as an alternative or fallback even after biometric login is enabled, rather than removing it entirely.