The pandemic has changed the way we think about what it means to be digital-first. Businesses across the retail sector and banks are pushed to drive customer loyalty through alternative means, as customer reliance on their physical locations decreases, and the focus on online services and factors such as app ratings increases.
Amir Nooriala, Chief Commercial Officer at Callsign.
This is positive in one way as online transactions are certainly more COVID-secure than face-to-face interactions, however are they safe from a trust and security perspective? And how easy are they in terms of the log-in and verification experience?
We must work to provide answers to these questions so we can make sure we’re giving consumers the solutions they need to make their lives easier. A lot of this comes down to financial organizations, who need to consider how digital-first their products and services are, and how they can build consumer confidence when it comes to interacting online.
The pressure is on for businesses to find digital solutions that provide a great customer experience, while also differentiating themselves from competitors. All while balancing a need to increase digital trust and manage the security of online interactions – because if not, businesses could risk losing their customers altogether.
Outdated systems are a problem
We know that the financial services sector has had to evolve its offering numerous times to make sure it’s keeping up with changes across technology and society. However, this is not a simple task if you consider how much sensitive data and information they hold.
With that in mind, legacy systems can be a financial organization's downfall and leave them open to hackers. It can be cumbersome to change solutions, but they need to acknowledge that a lack of robust authentication methods is a potential vulnerability – and one that fraudsters will most certainly take advantage of if given the option.
However, this is where digital transformation comes in. It provides financial organizations with the opportunity to build services with a digital-first mentality, enabling them to rethink online consumer behavior – and then implementing the right technology to accommodate this behavior. This will work to build trust between the consumer and the technology they’re using, increasing the confidence they place in the organization to deliver a great experience, and developing brand loyalty.
Overcoming these challenges
But how can organizations introduce a digital-first approach? As an example of a challenge, one-time passwords are an outdated authentication process that has just been digitized as a way of improving it – but this method is a popular way for criminal to exploit consumers and can have huge implications for the trust they place in organizations to carry out transactions securely.
The pandemic demonstrated this all too clearly, as thousands of people faced a deluge of scams involving text messages. Nearly a quarter of respondents (24%) from Callsign’s latest research say they receive more texts from scammers than their own friends and family.
By relying on the digitized version of outdated processes like this, the financial services sector is creating opportunities for cyber-attackers, and helping to fuel the rise in scams. Instead, they need to transform their services to what customers need, as opposed to what they’ve become familiar with.
Having the right solutions in place is key
It’s all about having the right technologies to become digital-first and using them to give customers the confidence to rely on these solutions as we continue heading towards an increasingly online world. Financial institutions need to start authenticating their customers using technology that seamlessly integrates into user journeys, without creating complications and a disruptive experience.
Behavioral biometrics is a great example of this. It is device agnostic, which means it’s not reliant on a single device, and at a time when customers use a multitude of devices and channels, this is key to improving the user experience in a safe and secure way.
Passive behavioral biometrics also uses millions of data points to verify if a user is genuine, when layered with device and threat intelligence, and removes the single point of failure that plagues most traditional authentication methods. Customers expect frictionless journeys, and this type of tech can be seamlessly incorporated into any point of the process, making it a far better authentication method that’s fit for a digital-first financial services industry.
What lies ahead for the sector?
Put simply, financial organizations need to reflect on the technological foundations their businesses are built upon and evaluate whether they are the best way of delivering the best digital service for their customers. They need to consider this alongside their customers’ needs around authenticating identity, and make sure this is a priority as opposed to an add-on.
We need to eradicate the siloed approach across businesses and instead establish a way for different teams to work together to create strong digital foundations. This will all work towards ensuring bad actors are not allowed the opportunity to exploit customers, and that consumers are offered the safe and secure solutions they deserve, to continue building that ever important trust between them and organizations.
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