In the rapidly advancing digital era, ensuring secure and reliable identity verification has become paramount to safeguarding sensitive data and maintaining user trust. Traditional security measures often fall short against sophisticated cyber threats, paving the way for biometrics as a robust solution for identity authentication. This review provides an in-depth analysis of biometric watermarking, a technique that integrates biometric data as a secure watermark within digital content to enhance authentication and data protection. We explore various biometric watermarking methods, evaluating their applications, effectiveness, and resilience in protecting biometric information while enabling seamless verification processes. Additionally, the concept of multimodal biometrics—integrating multiple biometric modalities such as fingerprint, facial recognition, or iris scanning—is discussed for its ability to enhance accuracy, reliability, and resistance to spoofing compared to unimodal systems. The study further examines the major role of encryption in biometric security, focusing on symmetric and asymmetric encryption techniques, alongside novel algorithms like the Rubik’s algorithm, which offers improved data protection. Key challenges in the domains of biometric watermarking and multimodal biometrics, including interoperability, robustness against attacks, scalability, and computational efficiency, are identified and analyzed. Future directions emphasize leveraging advancements in deep learning, hybrid encryption models, and real-time processing technologies to address these challenges. The comprehensive review attempts to provide useful insights into the current state of biometric watermarking and multimodal biometrics, highlighting their potential to revolutionize secure identity verification.