More Secure Banking
Turning to technology as safe and trustworthy passwords
- By Simon Marchand
- Sep 03, 2020
To be successful in financial services, banks, investment
firms and other institutions need to prove to their
customer base that they are safe and trustworthy. Yet
many still rely on passwords, PINs and other knowledge-
based authentication factors—which are not only unreliable,
but also insecure.
Using the Same Passwords
According to a 2019 Harris poll, 66 percent of Americans
reuse the same passwords for their online banking, email and
social media networks. The same survey shows that 75 percent
of respondents have trouble remembering their passwords. These
relics of authentication can be easily stolen, hacked or forgotten—
representing challenges to both customers and institutions.
To improve both the trust of clients and the security of institutions,
banks and other financial organizations must turn to
new technologies to help them protect against fraud. In its many
forms, AI has proven to be extremely useful when it comes to
fraud prevention by allowing organizations to use algorithms to
determine whether or not certain activities should be deemed suspicious.
Other forms of AI, such as biometrics, can use voice and
behavioral techniques to identify legitimate customers through
their biological makeup or through information that can be augmented
from external factors, such as the device print or location.
Here’s how technology-driven solutions give companies the level
of protection that their customers need and the service they expect.
Safer transactions In 2019. Banks around the world lost about
$2.8 billion to fraudsters and fake transactions. With these losses
amounting to billions of dollars annually, fraud can mean trouble
for both the customers using these financial institutions and for
the bottom lines of the banks themselves.
Fraud Solutions. Traditional transaction-based fraud solutions
aren’t enough anymore. Banks must have a more holistic
approach, focused on detecting the individuals committing the
fraud instead of focusing on suspicious transactions. It’s the only
way to disrupt the fraudsters’ business model and to effectively
reduce the financial losses from fraud.
Identify fraudulent activity. By turning to technology-based
solutions, banks and other organizations can quickly identify
and stop fraudulent activity before the fraudster can commit the
crime. New technologies can constantly monitor customers’ bank
accounts and freeze the accounts or send a push notification to
another device when suspicious activity is detected. This prompts
the account holder to call an agent or perform a task to unlock
the session, making it impossible for a fraudster to gain access —
even if they manage to steal the device.
For example, with AI and machine learning in place, institutions
can use models to detect irregular activity in real-time,
blocking suspicious transactions before they occur. Likewise,
with biometrics, it’s incredibly hard for a criminal to steal a person’s
biological makeup — such as a voiceprint — this makes it
less likely for a fraudster to get through the system. Additionally,
biometrics reduces the risk of social engineering of call center
agents. But biometrics also can be used to detect fraudulent interactions
in the very first seconds, giving the opportunity to stop
fraudsters in their tracks.
Better Customer Experiences
New technology cannot only protect against bad actors, but it
can also improve the customer experience overall. There’s no question
that customers have higher expectations now than they did
only a few years ago, largely because advances in technology and
savvy new business models make it possible to turn historically poor
experiences into seamless, satisfying and even “shareworthy” ones.
For the banking industry, authentication (such as those pesky
passwords) has been a historically poor experience. Everyone has
had that dreaded moment of not remembering their password
and being locked out of their account, which can be incredibly
frustrating and time-consuming for customers.
To remedy this fully, financial services providers need solutions
that fully empower customers to have a more effortless experience
in nearly every circumstance. This can begin with turning to digital
methods of authentication and identification. For example,
when something like your voice is your password, it eliminates
the need to recall old security questions or PINS, making for a
quicker, more personalized experience for the customer.
Turning to voice can also make it easy for someone like a customer
service agent or bank representative to know who is calling
and anticipate their needs ahead of time. For example, if a caller
dials in and AI can detect that they are a senior citizen from a
voiceprint, the system might be able to prioritize their call or connect
them directly to a live agent rather than a virtual assistant,
improving their experience and helping resolve their issue faster.
This level of service cannot be matched without the addition of
AI-enabled tools to current processes.
Financial institutions have been making strides to digitize operations.
Still there’s more that could be done—particularly by
safeguarding customers and their businesses against fraud, as
well as improving overall customer experiences. With potentially
billions of dollars at stake every year, banks can’t afford to let
fraud go undetected or customer needs go unmet. By turning
to technology solutions, financial organizations
can set themselves up for success, keeping
losses to a minimum and creating unique, safe
This article originally appeared in the September 2020 issue of Security Today.