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Authentication/Fraud/Identity Theft

Preparing Yourself and Your Customers for the Next Mass Data Breach

By Dale Dabbs

October 22 — Last month, we reached the one year mark following the monumental Equifax data breach, which impacted nearly half of all consumers across the U.S. In the wake of this massive invasion of personal consumer data, fraudsters have shown no sign of slowing down their efforts as shown by the on-going emergence of additional data breaches. Moreover, within just the past 12 months, nearly 30 percent of consumers in the U.S. have been notified of a breach related to their own personal data, which reflects a 12 percent increase since 2016.

Following these widespread data breaches, many banks have rapidly increased their cybersecurity budget and embraced new identity protection protocols to best protect their customers’ information. The problem with this approach is that while technology has consistently evolved quickly to keep up with changes in business and consumer demands, the security measures surrounding it have struggled to maintain the same pace.

Are Credit Freezes the Answer?

While many banks have begun to adopt robust identity protection services to protect customers’ personal information, they also need to guarantee that they are leveraging the most comprehensive security offerings. Although customers often look to their bank as the first line of defense, if they believe their personal data has been compromised or if they fall victim to identity fraud, there are also instances in which they will try to resolve such an incident on their own. Managing an identity crime can easily take anywhere between 30 to more than 600 hours depending on the depth of fraud.

On the heels of new U.S. legislation that provides consumers with free credit freezes, there is also further confusion among consumers on what really needs to be done to protect their data. Credit freezes alone aren’t enough as they only help protect against new account openings, which in reality is one of the rarest types of identity theft out there, affecting only 4 percent of victims. Clearly, if an effective, comprehensive and timely security response to digital identity theft and fraud is not being provided, your customers may take their business to another institution as the need is growing with the ubiquity of data breaches today.

 Your Customers Care About Identity Protection

In order to secure consumer banking information as fraudsters continue to capitalize on new forms of technology, advancements around cyber and identity protection need to be integrated as part of the bank’s ongoing strategic vision. With a 392 percent increase in data breaches in the past decade alone, there’s no time to waste in evaluating and implementing the changes that need to be made. But how?

The goal in taking advantage of new methods and innovations to better serve bank customers should also involve ensuring that the latest technologies both support and improve security and compliance. Not only will this help in effectively managing a well-rounded corporate image, but it has been proven that offering services like identity theft protection can additionally boost customer retention rates. For example, one study highlights that 97 percent of new account holders electing to adopt identity protection offerings remain a customer.

Digital Identity Theft Protection for Long Term Security

When it comes to dynamic technology offerings, consumers want services that can be tailored to fit their unique needs. This enables the specific wants and needs of both customers and the bank to be met while ensuring the optimal security measures are firmly in place. The technology chosen to manage these processes should be easy-to-use, allowing for customers to quickly navigate the capabilities from their computer, smartphone, or other electronic device.

Furthermore, the services also need to be flexible in order to evolve and expand as the factors impacting banks and customers continually pivot. For example, within today’s highly-connected marketplace, technology updates are being introduced daily to the technology customer’s use. Whether they are identity protection or other cybersecurity solutions, all comprehensive services offered by banks should keep pace with emerging technologies so that customers can maintain peace of mind that their information is safe and viewed as important and top of mind by their financial institution.

Providing robust security offerings brings clear advantages to consumers but also positively impacts banks by providing an added touch point to communicate with their customers. These points of contact allow for the bank to consistently remind the customer just how valued they are as well as all that is being done to ensure the safety of their personal financial information. These frequent status updates can be executed in a number of ways specific to the customer’s preference from email to app notification to a text message.

Not only do these capabilities further emphasize the bank’s care for their customers, but they also give them the opportunity to offer white-glove resolution and recovery services, if and when an identity crime does occur. This also eliminates the massive amount of time customers themselves need to spend doing paperwork, making phone calls, providing validation and much more. By making these offerings available to customers, banks will be able to reinforce tangible value, which can further fuel increased loyalty and decrease attrition.

In the end, no one can argue with the value of adopting additional security measures to protect today’s consumers and banks, especially given the frequency with which data breaches are emerging. With fraudsters gaining access to the same high-powered technology capabilities driving the next big innovation that will disrupt our lives, the question is not “if,” but “when” the next big data breach will hit. Bottom line: take the necessary measures today with the services and solutions your customer’s need to protect what matters most.

 

Dale Dabbs is the CEO and president of EZShield + IdentityForce. EZShield helps trusted partners protect their most valuable asset – their customer relationships — through secure, digital identity protection and resolution services that enhance the value of existing products. In August 2018, EZShield acquired industry theft protection provider, IdentityForce. For more information, visit www.ezshield.com

MIB Conference Report: Invest in Marketing, Social Media, but Don’t Forget the Fundamentals

By Bill Poquette, Editor-in-Chief, and Alaina Webster, Managing Editor

The titles of two presentations pretty well identify the range of the program for Midwest Independent Bank’s Community Banking Conference, recently held in Blue Springs, Mo.: “Twitter, LinkedIn, Facebook, Instagram” for openers, and midway through a reminder that, “Good Times Are Here Again, but Let’s Not Forget the Importance of Banking Fundamentals.” In a full day plus two half days, Aug. 22-24, the Jefferson City, Mo.-based bankers’ bank also provided 140 guests from Iowa, Kansas, Missouri and Nebraska a healthy dose of technology education, from payments to online accessibility to card skimming and cloning to cybersecurity.

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Fraud Costs Are Climbing

September 27 — A new study from LexisNexis, 2018 True Cost of Fraud, found that for every dollar of fraud, financial services companies incur $2.92 in costs, up from $2.67 in 2017, representing a 9.3 percent year-over-year increase. The lost value of the transaction, plus fees and interest incurred during applications/underwriting/processing stages, labor costs for fraud investigation, fines and legal fees, as well as external recovery expenses are the main costs of fraud for financial institutions.

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As Businesses Embrace Technology, They Open New Doors for Cybercriminals

September 25 — Using connected technologies like artificial intelligence, drones, robotics or wearable sensors can increase a business’s likelihood of being a cyberattack victim because these technologies give cybercriminals new access points into a company’s IT infrastructure if not properly protected. However, the overwhelming majority of business owners (91 percent) use one of these technologies, and almost half (48 percent) are unconcerned they will increase the likelihood of a cyberattack, according to Nationwide’s fourth annual Business Owner Survey.

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Voice Fraud Has Skyrocketed, Rising More than 350 Percent in Four Years

September 19 — The rate of voice fraud has climbed more than 350 percent from 2013 to 2017 with no signs of slowing down, according to an annual fraud report recently released by Atlanta-based voice security and authentication firm Pindrop. Moreover, between 2016 and 2017, overall voice channel fraud increased by 47 percent, or one in every 638 calls. The year-over-year increase can be attributed to several causes, Pindrop suggests, including the development of new voice technology, the steady uptick in significant data breaches and acts of fraud across multiple channels.

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