How to balance customer convenience and security in financial services

Co-Authored by Jeff Clapper - VP Sales North America

“Customers don't benchmark us against banks, they benchmark us against Uber and Amazon.”  - Hari Gopalkrishnan, client-facing technology CIO, Bank of America

Customer journeys in financial services have come a long way since the biggest “option” was visiting an ATM. Consider a task that starts with the question, “Alexa, ask Capital One what’s my payoff quote?” The customer might then open her laptop to transfer that amount from savings to checking – but perhaps not before calling the contact center to confirm that the transactions won’t cause her accounts to fall below their minimum balances.

Speed, ease and omnichannel convenience have become non-negotiable customer expectations. Thanks to a proliferation of apps, APIs, artificial intelligence (AI) and other technologies to enhance the customer experience (CX) once-rigid financial institutions have been transformed into more-open and -accessible platforms. However, as channels, endpoints, ecosystems and partners have multiplied, keeping customer data secure has become more challenging. Here’s a look at the problem in hard numbers:

  • A study by Bitglass noted that between January and August of 2018, financial services firms experienced nearly three times as many data breaches than they did during the same time frame in 2016.
  • According to Verizon, , the financial services industry accounts for 35% of all breaches.
  • Lexis-Nexis reports that for every dollar of fraud committed, financial services companies incur $2.92 in costs - up from $2.67in 2017, representing a 9.3% year-over-year increase.

You’re probably familiar with at least some of the damages that fraud wreaks on your business. On top of the lost value of any fraudulent transactions, there are investigation costs, fees and fines - and of course, the potential for lost customer trust.

Call center vulnerabilities

Another area where customer data can be vulnerable – albeit, more incrementally – is in the contact center. While there isn’t a large body of recent data specific to call center fraud in financial services, we know that year-over-year incidents were up by 113% in 2016. Paradoxically, the rise of security features such as EMV (chip) technology, which stores and protects cardholder data, has diverted some criminals to this channel.

Even trustworthy contact center agents are sometimes tricked into sharing sensitive customer data with fraudsters – from addresses and account numbers to the answers to security questions. And then there is also the less-common, but still real threat of rogue or dissatisfied agents appropriating customer information.

Mitigating Risk

Regardless of whether your role is focused on operations, service delivery or strategy, your organization’s ultimate goal is to provide an excellent customer experience. This requires a balance between customer convenience and security. In addition to increasing network data controls,here are some ways organizations are working toward both objectives:

Advanced analytics: This might involve drawing on alternate data sources such as social media accounts, phone usage data, and purchasing history, or using information about a customer’s location and device type to help validate whether a transaction is legitimate.

Tokenizing data: Systems that substitute personally identifying information with “tokens” that don’t have any exploitable meaning or data thwarts the hijacking and misuse of customer data.

Focusing on the human element: From strong background checks for new hires to providing thorough training in policies and procedures and following up with regular audits to ensure compliance and identify any gaps that might need to be addressed.

Strategies for balancing customer convenience and data security in today’s dynamic and connected

environment will continue to evolve. This will require more holistic thinking and innovative approaches. VXI is a partner that’s committed to helping your organization achieve these objectives.

 

 

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