By Michael Scheibach
Everyone knows that mobile consumers want access to a full range of banking services on the device of their choosing, whether smartphone or tablet, 24/7/365. Rather than being satisfied with these ubiquitous services, however, a recent report found that consumers are becoming increasingly dissatisfied with mobile access requiring cumbersome passwords and usernames.
The report, “Mobile Identity – The Fusion of Financial Services, Mobile and Identity,” published by Telstra, a global telecommunications and information services company, concludes that expectations about how financial institutions manage mobile identity are being transformed. Consumers now want their mobile devices to recognize them instantly via biometrics, such as fingerprint scanning, eye scanning, facial recognition and two-factor authentication.
“When we ask consumers how strongly they perceive each authentication method’s security in terms of protecting their personal and financial information,” said Rocky Scopelliti, global industry executive for banking, finance and insurance for Telstra, “it is clear that there is a significant disconnect between the security methods commonly used and consumer confidence. Complex passwords and the provision of personal information, the most commonly used methods, are both viewed as having significantly lower security than biometric options.”
As numerous studies and reports have found, more than half of U.S. consumers cite the security of their finances and personal information as their top priority, and financial institutions have responded by enhancing their online and mobile security. But the benefits of increased security need to be balanced against the risk of increasing friction in the customer experience, argues Scopelliti. The key is implementing a flexible, well considered and well implemented identity and access management architecture that delivers a positive user experience.
The most common mobile authentication methods now used in the U.S. are passwords and four-digit PINs. Although fingerprint scanning has gained some ground as a result of the Apple iPhone, this method is used for accessing financial accounts in just 6 percent of cases on average, says Scopelliti. He goes on to suggest that if financial institutions are to provide the level of security consumers want, and for customers to trust their financial and personal information will be kept safe, it is time to look to the next level of authentication methods. Specifically, he believes three new methods will reach the mainstream within the next two years: two-factor authentication, mobile digital signature and federated identify (i.e., where a user’s credentials are stored with one “identity provider” rather than provided to various service providers). Moreover, these authentication methods will help to improve satisfaction, acquisition and retention of consumers.
“If financial institutions are to provide the level of security that consumers are looking for, and for customers to trust that their financial and personal information will be kept safe, it is time to look to authentication methods that will aid this,” said Scopelliti. “We need to respond by designing identity services that accommodate the fusion of financial services, mobility and identity and that engender consumer trust and confidence. And our research highlighted that mobile identity services can both meet and exceed these expectations.”
For financial institutions, mobile identity services deliver a wide-ranging payload in terms of acquisition and retention of younger customers by developing trust in keeping their finances secure; improved customer satisfaction and increased advocacy by developing trust in keeping personal information safe and sound; and reduced incidences of fraud, security and privacy breaches.
Finally, the Telstra research also found that one-third of those surveyed are willing to pay an extra $17 per annum for more sophisticated mobile security measures — an important factor for financial institutions exploring new ways to generate revenue.
Michael Scheibach is executive editor of BankNews.