Here’s how technology can help make banking more secure

It seems as though customers are beginning to favor biometric security facilities offered by banks
23 October 2018

Biometric security will be key to banking in 2019. Source: Shutterstock

Customers have always been afraid of accessing their bank account and making transactions online, and they’re not to blame.

Over the past decade or so, there have been several instances where hackers have been able to “game the system”, “fool the bank”, and make off with hundreds of thousands of dollars.

Usually, these fraudulent transactions aren’t even reported to the media (or the police). Customers simply register a complaint with the bank who reviews and makes a decision.

The only news people read are about hackers targeting banks to steal funds and customer data.

However, banks now have an opportunity to protect customers by offering them better security features. In fact, with the advancement of mobile phones these days, it’s getting easier for banks to offer biometric authentication via their apps and websites to secure customer transactions.

In fact, according to Global Data, multi-faceted biometric applications will soon be the norm, putting an end to traditional, password-only solutions. This will allow banks to increase customer convenience and significantly improve their experience.

GlobalData’s 2018 Consumer Payments Insight Survey shows that 16 percent of consumers globally, have been victims of payment fraud over the past four years. Not counting the reputational damage providers suffer as a result, this is costing the industry billions every year.

“Of those consumers who have been subject to fraud, 9 percent closed their accounts and switched to another provider. Given the costs involved in acquiring and retaining customers, this is a significant proportion. Yet, the level of concern from financial services providers remains low,” said GlobalData Senior Wealth Management Analyst Heike van den Hoevel.

According to experts, customer attrition is highest in the wealth management and private banking space where highest-value transactions are common.

Only 34 percent of providers regard the effect of data breaches on their company’s brand as a threat, suggesting a blind spot in executive thinking, claim GlobalData’s analysts, suggesting that biometrics are set to replace or supplement pin codes and passwords.

A recent study shows that 67 percent of global consumers would be happy to use some form of biometric to secure their payment details — and highlights that adoption rates of biometric authentification are as high as 93 percent if the solution is rolled out properly.

“Banks often worry about the balancing act of extra security and maximizing convenience, but clearly there are solutions such as biometric security that can address both. It’s time to act, or be left behind,” van den Hoevel concluded.