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Empowering Experience-Driven Digital Banking

Banks must innovate to increase profitability, grow market share and drive the next phase of their transformation to digital, experience-driven banking services. Success is built on a mobile-first strategy and the ability to generate rich, analytics-driven insights from which banks can personalize their approach to engage with customers and for customer acquisition.

The mobile experience also demands a more seamless user authentication method whereby customers expect their bank to keep them safe - even if the customer actually behaves unsafely. To satisfy increasingly demanding customers and to prevent them from switching service providers, banks should consider three important business transformation strategies:  offering a superior user experience, introducing more innovative services, and providing frictionless authentication.

Studies show it is 43 times cheaper for a bank to transact through mobile rather than branch banking channels. Customers who move to mobile banking can yield an ROI of 16%. However, customer security concerns are frequently cited as the #1 or #2 barrier to adoption for mobile banking. 

To achieve desired revenue growth targets, meet risk and compliance challenges, and improve operational effectiveness banks must, in part, drive adoption of mobile channels and deliver a superior experience with increased convenience while improving security.  This can be addressed through a multi-layered strategy, where the user, device, channel, transaction and back-end banking application are all authenticated with end-to-end trust.

Managing money while on the move is particularly important for mobile banking users, but today’s methods of soliciting customer approval before executing transactions can be confusing.  Customers have difficulty distinguishing between legitimate and fraudulent websites, emails, and phone calls, making it tough to spot fraudulent transactions. 

Using passwords, hardware tokens and challenge-response has proven inadequate.  The alternative has been out-of-band (OOB) verification using a one-time password (OTP) token sent via SMS to a customer’s mobile device, but this has proven vulnerable to attacks aimed at account take-overs. 

New Approaches

A better approach is to send a real-time alert, known as a Push Notification, to the customer’s phone immediately prior to any suspicious transaction being applied to their account. The customer receives details about the pending transaction including time, location, amount, account payee and with a simple swipe of the finger they can immediately reject or approve the transaction – this process is known as Transaction Signing.

This approach of validating suspicious transactions just before they are authorized is best implemented within a layered authentication framework as part of a holistic, intelligence-based digital banking strategy that optimizes risk-based security. Friction is reduced by minimizing the scenarios and instances in which the customer is asked to present any login or authorization credentials.

Even just halving the number of times that a bank’s fraud department needs to call its customers to check on a suspicious transaction has resulted in millions of dollars of savings per year for one particular financial institution. Implementing Push Notification and Transaction Signing can help banks to solve the dual conundrum of providing an improved user experience whilst at the same time significantly reduced operating costs. Learn more in our webinar, “The New Era in Digital Banking: Innovative and Cost-effective Authentication Solutions” >> Register Now