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Banks can rebuild trust with consumers by protecting their identity

Banks can rebuild trust with consumers by protecting their identity

Mark Roper, Commercial Director at Collinson Group discusses a bank’s role in preventing fraudulent activity

In the last year, more than 700 million customer records were leaked due to data security breaches and cyber-attacks. While these figures, and the cyber threat itself, are not limited to financial services, banks are investing more, and working harder than ever to ensure they have robust systems in place to withstand the threat of these attacks. Consumers regard ID protection as a valued service,and data security remains a key priority on the boardroom agenda of global financial services organisations.

The scale of fraud continues to grow, for example, 72 percent of Singaporean residents have experienced cyber-crime in their lifetime to the value of over US$944 million.  It is predicted that cyber-attacks could cost Middle Eastern economies more than US$100 billion by 2020. In addition in 2015 there was a 52 per cent rise in younger victims of identity fraud in the UK due to their use of social media.For years, financial services companies have provided add-ons to accounts and cards that protect someone’s TV when it stops working, a vase when it gets broken, or luggage when it gets lost. But, when a customer’s identity gets stolen there are few solutions in place to protect them, either to help resolve the matter quickly or to stop it from happening again.

The current scenario

It’s practically impossible not to interact with a brand online, which is particularly true in financial services, where almost 60 percent of transactional banking is done online. Not only does online banking deliver cost efficiencies and provide a valuable service, it also enables banks to collate, analyse and use this data as an important asset, as it enables them to understand their customers’ behaviours and by extension provide relevant products, services and communications that positively influence customer loyalty.

Making a transaction online has become second nature, many customers do not think twice about where their personal information is being stored, trusting that it is being protected. Financial service providers must ensure that their customers understand the benefits of online monitoring and protection against phishing. We polled 6,125[1] of the top 10-15 percent of earners globally (the middle class mass affluent), and found that there’s a strong demand for ID protection. Indeed, 57 percent of consumers consider ID protection a highly valuable product, whereas this was just 50 percent in 2014. When we group the results via categories of generation, it’s the millennials (62 percent) and generation X (58 percent) who rate ID protection as more important than the global average.

As more of our personal data is stored online, it’s difficult to understand why identity theft protection is rarely provided as a benefit on a card or account, or within a loyalty programme. It is certainly not due to a lack of consumer demand.

So as the facilitators of online transactions and managers of valuable data, retail banks could seize the opportunity to provide their customers peace of mind and enrich their digital experiences by offering identity protection products.

An opportunity for financial service providers

For those financial service providers that offer little in the way of rewards, there’s a compelling argument to provide ID protection products and services as a value add benefit. Collinson Group research into the global mass affluent middle class found that of those consumers who already subscribe to an ID protection service, only 13 percent purchase it from their bank; much lower than specialist providers (22 percent) and credit card providers (20 percent). Educating customers on the importance of online monitoring and protection and offering supporting products will help banks re-establish trust with their customers, drive a better digital customer experience and help build brand loyalty.

At Collinson Group, we suggest that banks consider three points

  1. Mitigate online risks: criminals scan the internet for personal information that can be used illegally and trade stolen personal and financial details on the ‘dark web’. Banks should be providing online monitoring platforms to mitigate the risk of customers falling victim to identity crime. 

Some portals will alert their customers when they are in danger of fraud or identity theft, and classify their levels of risk. Details of any potential security breaches can be viewed and assessed, so that action can be taken as required.

  1. Card and document assistance: help customers keep their identity secure in the event that cards, documents, and data is lost or stolen. Assistance in blocking or cancelling lost or stolen cards, while making sure that copies of important documents are stored securely for easy retrieval, will allow access to missing items without delay. 
  1. Protection across multiple devices: today’s consumers access services and information across a variety of devices. Whether customers use their desktop,or a mobile while on the move, protection from phishing and key-logging attacks (two of the fastest-growing online threats)can be offered. This will mean giving customers control of their personal data, so that they can monitor their exposure.

 Final thoughts

Banks help us protect our homes, our cars and our families as a matter of course. Now they should start helping us protect our identities, our personal data, and from fraud.  Educating customers to be more aware of the importance of online monitoring and protection, and offering supporting products, to help customers act, will help banks to re-establish trust with their customers and drive a better digital customer experience while building brand loyalty.

[1]Australia, Brazil, China, France, Hong Kong, India, Singapore, the United Kingdom, the United States of America and the United Arab Emirates

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