By Dewald Nolte
What is the tradeoff between customer convenience and security? Conventional thinking holds that the more secure something is, the more difficult it is to use. For example, in mobile and online banking, anti-fraud measures have long been synonymous with complicated passwords, one-time text messages, or having to verify information with a phone call or portable hardware token. Such measures often inconvenience consumers, leaving financial institutions to find a balance between providing the most convenient experience while still guaranteeing that their information is safe.
Straddling the Protection–Convenience Line
With security breaches like those at Wells Fargo and Orbitz continuing to make headlines, consumers are on edge about their data security. Now more than ever, they will ask questions and express interest in knowing what security measures are in place to keep their information safe. For financial institutions, cybersecurity is front of mind, too. In fact, according to ICBA’s most recent white paper, Fintech Strategy Roadmap, cybersecurity accounts for 17 percent of emerging technologies important to banks’ business strategies. The paper shows that investing in cybersecurity not only increases revenue and customer satisfaction, but it also benefits the financial institution itself by protecting consumers’ data from being compromised.
But while consumers accept that some security controls must be in, there does come a point where the authentication process is too inconvenient. Make the requirements too onerous, and they will avoid a service or even in some cases choose a different bank that can promise easier access to information.
Banks’ key focus areas seem to be significant here. Fintech Strategy Roadmap mentions that customers tend to trust their bank when they feel its business goals are centered on customer satisfaction. Community banks in particular have the advantage in terms of a customer-centric banking tradition — one that larger financial institutions can learn from. In fact, according to a November 2017 article from McKinsey&Company, developing a customer-centric business model should be a key focus area for financial institutions to have a competitive edge.
Leveraging the Mobile Device
So how can financial institutions focus on security while also prioritizing their customers? The answer lies in involving the customer in security measures by means of something that already forms part of their everyday interactions. In a technology-driven world, a customer’s mobile phone can offer a solution that is as secure as it is convenient.
Through a mobile push-based authentication solution, the customer can easily verify a transaction, new application or account login through a device they are familiar with and carry with them everywhere. The bank can push authentication requests directly to the phone, and they overlay whatever else is on the screen. The authentication request includes all necessary details about the transaction or login, giving the customer full control. They can respond to the request with a mere scan of their fingerprint or a simple swipe to either accept or reject the transaction or login. And while it is true that customers do not want to be inconvenienced, current studies show that having the ability to easily authenticate certain transactions helps increase trust and stop fraud before it occurs.
The added benefit of a convenient mobile security solution is that when consumers feel empowered by such simple, no-fuss active authentication measures, they feel safer, transact more, and opt into a greater number of digital services. By putting the power of authentication in the hands of the consumer, they become more engaged and in control of their transactions. At the same time, the simple interface of a mobile push-based authentication means they are not bothered by too many questions, passwords or hoops to jump through.
The Perfect Balance
Combining the convenience of the mobile device with the security of an out-of-band authentication solution is an ideal way to solve banks’ top two priorities: optimizing the customer experience and mitigating fraud. Finding the balance between pleasing customers, maintaining security and increasing revenue is no new struggle for any business, especially financial institutions. As a recent study by Accenture indicates, the main business goals for financial institutions used to be compliance and cost management. Now, we have entered an era where customer convenience and security are strategic focus areas. Financial institutions that embrace the possibilities that a mobile-first strategy can offer in both these areas will certainly reap the benefits for years to come.
Dewald Nolte is co-founder and Chief Commercial Officer at Entersekt.