February 16, 2024

Key Risks and Benefits of Face Recognition Technology

Dive into the benefits of face recognition across different industries. Our article covers use cases of this technology in e-commerce, education, healthcare, and the financial sector

Written by
Yuriy Pulyaev

From retail to medicine and education, FRT is quickly becoming a significant part of various industries. In 2022, the market for these solutions was valued at $5,5 billion and is expected to reach $24,3 billion. While most adopters are in the US and China, the rest of the world is catching up to the capabilities of facial recognition.

This technology falls into the same category as fingerprint, eye retina, and voice recognition tools. It uses computer vision and allows enterprises and organizations to identify people in real-time feeds, videos, and images. There are many benefits and risks of facial recognition, which our guide will cover in detail.

Table Of Contents:

Main Benefits Of Facial Recognition Technology

Like many technologies that have gained momentum in the past decade, facial recognition tech has impacted various industries. On the surface, it may have limited applications, but there are many advantages of face recognition technology that enterprises and organizations can explore.

  • Convenience and User Experience

Many smart devices use facial recognition as an unlocking method. Unlike fingerprints that can get smudged due to shaking or wet hands, face scans offer instant access in seconds. This saves time and effort in remembering complex passwords or carrying around keys and cards. It also makes the daily routine more efficient and smooth.

  • Faster Service

Facial recognition technology optimizes and automates the delivery of various services. This drastically cuts waiting time and lets users get what they want faster. FRT makes it easier to identify retail, banking, and hospitality clients. Airlines such as Delta and United Airlines use facial recognition to verify passengers. 

  • Improved Accessibility

People with physical disabilities use this technology as an alternative to more common identification methods. This is especially beneficial to individuals with impaired motor and speech skills. With facial recognition, they get previously unattainable access to services and products. Disabled individuals also use facial movements and gestures to navigate software applications.

  • Customization and Integration

Organizations add face recognition technology for a more personalized and efficient user experience. One of the main benefits of facial recognition technology is that it can be integrated into different systems and platforms, creating a seamless ecosystem. Each industry finds specific applications for this technology, which is why it’s widely popular in finance, retail, law enforcement, and healthcare.

  • Humanitarian and Social Impact

This technology has many humanitarian applications. It helps find individuals in disaster areas and locate missing persons. Additionally, the tech can prevent human trafficking and make public places safer. In the social sector, facial recognition makes it easier to deliver public services and help people in need. In 2021, the New York police caught over 4,000 suspects using facial recognition.

Key Benefits In Different Industries

The adoption of FRT products has revolutionized many sectors of the economy. They had a tremendous impact on e-commerce, retail, education, healthcare, banking, and finance. Here are the main advantages of face recognition technology that organizations in each sector can expect.

E-Commerce & Retail

This industry has long been using the versatility and power of AI-based chatbots and virtual assistants to boost sales and improve customer experience. However, retailers and e-commerce companies have also found uses for FRT. Here’s how companies can benefit from adopting this technology.

  • Customer Personalization

Facial recognition technologies provide a personal shopping experience to all customers. E-commerce and retail businesses use facial structure and skin tone information to provide personalized product recommendations for cosmetics, accessories, sunglasses, and other items. This enhances the shopping experience and increases client loyalty.

  • Security and Safety

Retailers use the benefits of face recognition technology to identify people caught shoplifting or guilty of fraud. As soon as such individuals enter a store, employees act appropriately and prevent any losses for the company. According to CSC, almost 30% of retail firms use this technology to track customers. Shops also use this for sanitary measures, leading to contactless transactions and decreasing the risks of workers catching diseases.

  • Fraud Prevention

Businesses benefit from facial recognition thanks to a significant reduction in fraudulent transactions. They use this technology to check if the person making purchases is the rightful account or payment method owner, preventing identity theft. This reduces risks related to returns and reputational damage.

  • Real-Time Analytics

Surveillance equipment paired with facial recognition helps identify customer behavior trends and preferences. This information lets them find optimal spaces and places for different product types. Identifying the peak time for customer activity allows retailers to optimize cashier and consultant staff during rush and regular hours.


Education providers have found many ways to use AI to improve the learning experience for students. Collegegoers are reportedly scoring hiring thanks to tailored content and enjoy other perks. When it comes to facial recognition technology, institutions can expect the following.

  • Improving learning engagement

Products built with facial recognition tech don’t just check the IDs of learners. They track their behavior during classes, looking for visual cues. For example, it helps establish if the student is focused on the class or shows signs of confusion or boredom. This information can be passed on to educators for further use.

  • Attendance Tracking

Using facial recognition helps educational institutions better track student attendance during different classes. This is especially pressing due to the growing popularity of online courses and lectures. This tech allows colleges and schools to eliminate card swiping and roll calls during offline classes, leaving more time for the educational process.

  • Security and safety

Educational organizations enhance their security systems with this technology. One of the advantages of face recognition technology is that it helps find people who aren’t supposed to be on campus grounds and deal with them. With this technology, students identify themselves before joining an online class.

  • Fraud Prevention

It’s not uncommon for applicants and students to cheat by asking someone else to take exams and tests for them. Higher education institutions use facial recognition to prevent impersonation and cheating during entrance and term exams. This helps maintain the integrity of academic credentials.


The healthcare industry heavily relies on artificial intelligence solutions to automate administrative tasks, update documentation, and make patient appointments. FRT enhances the patient experience and leads to better outcomes, thanks to several perks.

  • Patient identification

Medical institutions use facial recognition to reduce medical documentation errors and streamline hospital admissions. This technology also reduces the risks of wrong diagnoses, treatments, and other medical-related procedures.

  • Treating healthcare professionals

Hospitals and clinics use FRT to keep their healthcare experts in good condition. A report published by Medscape in 2022 shows that 24% of them suffer from clinical depression, 64% from colloquial depression, and 47% suffer from burnout. Symptoms of these diseases can be identified by analyzing their facial expressions.

  • Improving diagnostics

AI algorithms in face recognition solutions analyze patients' facial features to help doctors make more accurate diagnoses. This is especially important in identifying such deadly diseases as diabetes, cancer, retinopathy, and others. Face recognition is an additional set of eyes and draws attention to things that might have escaped the doctor’s examination.

  • Early disease recognition

Recognition tools paired with machine learning models help identify potential diseases based on facial features and structure. This practice can improve patient outcomes and more effective preventive measures and treatments. For example, the Face2Gene platform shows a 91% accuracy in identifying correct syndromes.

Banking and Finance

The financial sector has been using AI-based helpers for quite some time. They’re drawn to the capability of these products to handle customer service, offer a personalized experience, and automate many repetitive tasks. FRT products make the banking experience even smoother thanks to several characteristics.

  • Contactless Transactions

The post-pandemic world is increasingly investing in contactless transactions to keep clients of financial institutions and employees safe. Combined with QR and NFC quotes,  this technology makes transactions faster and reduces the risk of spreading diseases. 

  • Customer verification

With face recognition, it's possible to log into bank apps, confirm payments, and confirm customer identity at physical locations. The technology offers an alternative to using PIN codes and traditional passwords. These solutions also verify transactions and account access. The HSBC bank customers have worked with facial recognition software for the past 6 years.

  • Security and safety

Facial identification helps banks secure the safety of client accounts in physical branches and online apps. These security measures allow customers to keep their funds safe, and banks instantly identify people known for fraud. Financial and banking institutions use facial recognition to prevent real-time fraudulent activity.

Risks of Face Recognition Technology

While the benefits of face recognition are apparent, there are things to look out for, like with any type of modern technology. Here are the main risks organizations and enterprises should be aware of if they wish to work with these solutions successfully.

  • Privacy Concerns

Using facial recognition applications is a form of biometric data collection. This practice can raise concerns about information security and privacy from software users. Additionally, the surveillance aspect of this tech puts personal freedom at risk. The data gathered through such apps can collect information about a person’s associations, activities, and whereabouts.

  • Bias and Inaccuracy

Facial recognition solutions can be biased towards particular age categories, genders, ethnicities, and races. A major risk of facial recognition is its potential to misidentify people from certain groups, leading to wrongful arrests or denial of services.

  • Data Vulnerability

Information gathered through FR solutions is a prime target for hackers. This information can be breached and leaked without proper storage, leading to potential misuse. Malicious actors use stolen information for blackmail, identity theft, and cyberstalking. Companies should safeguard their data with the latest solutions to reduce the potential for leaks.

  • Impersonation and Facial Spoofing

While facial recognition tech is robust, with an accuracy of 97-99%, it’s far from foolproof. Solutions with these capabilities can be tricked into unlocking access to phones and accounts with masks, photos, and videos showing an owner's face. This risk of facial recognition tech is addressed by training apps on how to tell a live person from a picture or a face mask.


To fully harness the power of facial recognition technology, its adopter should be acutely aware of the benefits and risks it brings along. But, with the right security protocols and practices, companies and organizations can mitigate the drawbacks of this technology. This way, they’ll make the user experience no matter what they wish to use FRT for.

Customer retention is the key

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What are the most relevant factors to consider?

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Don’t overspend on growth marketing without good retention rates

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What’s the ideal customer retention rate?

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Next steps to increase your customer retention

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