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Digital experience and security – the crucial combination for banks

Digital experience and security – the crucial combination for banks

By Oliver Kent Braham, Financial Services Lead, Yoti

No industry is untouchable. We all face the constant challenge of maintaining the balance between customer experience and security. The financial sector in particular has been trying to introduce new services to keep its customer base loyal and away from the FinTechs that are increasingly stepping on their toes. Consequently, banks have placed a focus on digital innovation and reduced their presence on the high street by closing physical branches. Lloyds recently announced it was closing 23 branches and as the industry increasingly moves online many banks will follow suit.

The move to digital

The financial sector isn’t alone when it comes to new competitors. So many aspects of our everyday life have been impacted by technology. With just a quick tap on our phone, a taxi can arrive at our door step or we can order our favourite burger from across town without leaving our home. “On demand” has seeped into everything we do and consumers now expect this in all their services. You can book a hotel room on the other side of the world in seconds, all through an app, so why wait in a queue to open a bank account?

But like all successful businesses, they are adapting. The move from bricks and mortar to an efficient digital experience will be difficult, but it can be done. A challenge that banks will face here is ensuring their security measures are in line with customer expectations online. Consumers will expect a smooth and quick service, but they may not even think of the security implications. The pressure to keep this crucial financial data secure falls on the banks shoulders.

The security risks

Changing consumer behaviour and the complexity of digital banking services mean that securing consumer data is not an easy mountain to climb. Take account creation as one example; it’s a major fraud risk, so banks have enforced in-branch interactions to try and reduce the problem. By forcing the customer to turn up in person with an authentic identity document, they can ensure the account holder is who they say they are. However, if the trend of branch closures continues banks need to find a different identification technique to reduce the risk of fraud during account on-boarding.

The need to verify the consumer’s identity doesn’t stop at account creation. Banks also face the challenge of ensuring every point of payment or withdrawal is done by the correct person. How can banks know it’s you and how can you prove to your bank that you are who you say you are? Currently, we depend on usernames and passwords created by the customer. With the average person having to remember an average of 19 passwords, we can’t be blamed for using the same password across several different services. In some cases, hackers know that if they crack one password, they have cracked them all. So, if a cybercriminal hacks an ecommerce website and you use the same login details for your online banking, that hacker can then access your account. In this sense, the security threats for banks are out of their control.

The positive news is that banks have been adapting their security measures according to customer behaviour, often thanks to exciting developments in technology. Banks are now in the race to keep their customers data secure without impacting the user experience, and many are looking to biometrics as the ideal solution.

The rise of mobile

Banks have clocked on to the fact that consumers now rely on their mobiles to do pretty much everything so it makes sense that they should embrace biometrics. Biometrics are an opportunity for banks to introduce layered authentication without impacting the customer experience. As biometrics are so varied, different types of technology can be applied to facilitate different interactions. For example, we are currently limited to checking our account balance. But if banks introduce a tailored security strategy that incorporates biometrics where needed, consumers could one day order a new card or apply for credit through their phones.

Biometrics mean that customers could take a selfie to authenticate a payment or speak into a microphone to change their address. With major tech players such as Amazon introducing biometrics, banks will be able to see that the technology is scalable and could protect their huge customer base.

We all expect that perfect combination of efficient customer service and strong security measures which I must admit is tough to achieve. But as the digital experience continues to grow, banks will have to wake up and smell the coffee. If they don’t show that they have kept up with their changing consumer needs, customers will soon jump ship to their competitors.

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