The traditional branch-based banking model is becoming outdated. Branch foot-traffic, already low before the pandemic, has only declined further due to stay-at-home mandates and social distancing regulations — accelerating the digitalisation of banking.
Bank customers are seeking customized banking experiences that are time efficient and secure and can be done without entering a branch. But, with one-third of bank customers planning to increase their use of online and mobile banking services post COVID-19, there comes the increased risk of data breaches.
Oren Gur, VP Security of licensed acquiring bank and smart payments provider, Credorax, understands how crucial it is that customers feel safe as their banking services go digital. And on the flip side, he also understands how important it is for banks and other regulated entities to maintain high standards of security and compliance, which can sometimes be a hurdle for customers. Below, Oren outlines three tips to ensure the shift to digitalized banking is efficient and secure for all parties:
Digitalising the onboarding experience
The onboarding experience is usually the first experience a customer has with their bank. Traditionally, the onboarding experience is done in-person and is often time-consuming, requiring the customer and banker to manually input large amounts of data and pass through a series of different systems. Being in-person, the banker is able to verify the identity of the customer firsthand and manually view the identification documents.
When digitalising the onboarding process, risk management solutions become a crucial factor. Unfortunately, these solutions often come at the expense of the customer experience, due to additional pop-ups and extra steps. Banks must make sure their onboarding platforms are streamlined without causing friction to the user experience, while still maintaining necessary fraud protection. For example, by implementing face-based biometrics for digital identity verification, or VPN trackers, banks can add another layer of protection and identification measures to a digital onboarding process without much extra hassle to their customers. Another way to reduce friction is by using digital systems that allow the user to upload photos of documents, such as their form of identification, instead of forcing manual data entry. By integrating these solutions, the onboarding process can be securely done in minutes, without requiring the user to reinput the same information or go through multiple security checks.
Integrating secure database solutions
As digital security becomes more advanced, cybercriminals’ methods are becoming more sophisticated. Banks must secure both the customer-facing end of banking processes as well as the internal processes. For users to embrace going digital, banks must be able to guarantee that they are effectively verifying users’ account transactions, no matter the payment channel used. Whether it is ACH, wire transfer, real-time, mobile or another payment channel, banks can offer real-time account validation services to clients by using upfront validation tools.
Using third-party services such as application programming interfaces (APIs) and applying smart-routing logic, banks can provide confirmation of both the status and ownership of an account. Additionally, banks should apply data loss prevention (DLP) solutions to mitigate insider threats and protect sensitive data such as customers’ names and credit card numbers. These are just a few examples of secure database solutions banks can integrate into their digital systems to provide customers with increased risk and fraud prevention capabilities.
Smart use of data
One of the harder aspects of shifting to digital banking is the issues around data. But, when used intelligently, it can open a world of possibilities for security controls when moved from the authentication process to the authorization process. This new security approach based on data analytics allows the bank to offer the right services for each person and process real-time indicators of users’ ‘financial health’. Banks should also be utilizing relevant data collected on user banking behaviours to assess security. Information on user activity as it corresponds to specific banking services (i.e. typical times of the day when the user logs into the banking application, regular days of the month when they deposit or take money, as well as average amounts for these activities ) will help determine if activity in the account is fraudulent or not.
The closure of bank branches due to COVID-19 may have jumpstarted it, but digitalized banking services will continue to prove beneficial as customers move more towards cashless transactions and seek to accomplish tasks that used to be in-person from the comfort of their smartphone or computer. Industry players must get on the digital bandwagon if they hope to retain their users, and while there are still some challenges to overcome, with the right steps, they can ‘secure’ their role in the fintech and banking market of the future.