“Don’t bother the customer.”
That was the mantra banks used to adhere to, at least when it came to engaging with customers as they transacted and conducted their daily financial lives online, Entersekt Senior Vice President of Product Christian Ali told PYMNTS.
But increasingly, with fraud soaring and account takeovers (ATOs) on the rise, it’s no longer possible for banks to do all the anti-fraud heavy lifting on their own. They’ve got to get the customer involved to the benefit of all.
But there’s a fine line between interaction and intrusion.
With any mobile app, Ali explained, consumers are “hypersensitive” when it comes to the user experience.
“Whether it’s mobile banking or something else, if a customer logs in and tries to use your application and they encounter any type of challenge, they’re going to [give up] and never come back to your app,” he said. “Or if they do [come back], it’s going to be quite a while because let’s face it, there are tons of competitors’ apps out there.”
Consumer banking needs to provide relevant services, but those services can only be useful if there’s strong authentication and security built into the app, he said. After all, when there’s fraud or even the slightest hint that data may be at risk, trust erodes quickly.
Securing apps has become a critical endeavor as banks are increasingly (due to the pandemic) interacting with their customers online, Ali said. And there’s value-add in including consumers in the authentication process.
The Evolution Toward Hands-On Authentication
There’s been an evolution over the last few years in terms of how much hands-on interaction consumers have wanted when it comes to security, said Ali.
“Historically, consumers wanted a very hands-off approach,” said Ali. “They just expected that their financial institution was going to protect their information and their funds. If they were engaged — bothered — they were pretty upset.”
But now, with massive data breaches and ATOs becoming commonplace occurrences, banking customers know that they cannot just sign over the proverbial “keys to the castle” to the financial institutions (FIs).
“They recognize that ‘if I need to authenticate a transaction in real time, I’m probably the best person to know.’”
But in the bid to authenticate themselves, consumers want simplification. In the past, each banking channel — the branch, the app, etc. — demanded different authentication protocols, which can lead to poor user experience.
The banks also need a simplification of their authentication processes, and mobile devices are where those ambitions typically intersect.
With the move toward conversational banking, Ali said banks can leverage data and advanced technologies, including machine learning (ML) and biometrics, to create a holistic view of the customer. They can then engage with the customer through strong customer authentication (SCA) and other lines of defense to not only improve security, but enhance the customer experience, too.
He said mandates like PSD2 in Europe, where SCA is part of the directive, is helping spur customer awareness and interest in being part of the authentication process. The mandate requires customers to approve payments above certain thresholds, creating new levels of comfort with authentication on the customer side.
Research shows that more than half of customers believe their fraud risk will drop if they authenticate transactions personally — and more than 60 percent of customers want to do this through their mobile banking app, he said.
“The ROI is fantastic. The customers are transacting more frequently and are doing larger transactions,” Ali said, adding, “The customer experience is not just the interaction that a customer has with their institution [at a branch or via a call center]. It’s the overall beginning-to-end interaction that they have … [across various channels].”