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 customer interactions.

This article originally appeared in the September 2020 issue of Security Today.