Over the past few years, there has been a significant growth and shift in innovations within the digital banking sphere. New fintech startups, established fintech companies and banks are addressing the need and importance of offering a more comprehensive and sound digital banking experience, while, traditional banks are transforming their service offering to achieve efficiencies that can enhance the user experience when it comes to their digital banking functionalities. Another key reason for traditional mainstream banks to shift course is to keep up with the competition.
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This move and renewed focus on enhancing digital banking experiences has exposed both users and providers to a new set of frauds and online threats and risks though.
Customer Protection Should Come First
Some of the more common ones that have seen a spike in recent years include identity fraud, data breaches, account takeovers, duplication of card information.
While some would say that these risks are an ongoing threat to any form of digital business, what one can never ignore is that banking providers are obliged to ensure a seamless fraud detection and enhanced protection given that their account users and customer data (which includes sensitive personal information), if leaked, can leave users vulnerable to attacks of various kinds, to the level that their funds can be wiped clean.
Fraudsters Are Innovating, Too
With the growing innovations and offerings in finance, fintech and tech in general, hackers and fraudsters are also developing newer methodologies that can deeply impact legitimate end users.
From deepfake technology to cybersecurity issues like the ones above, online fraudsters can even use AI to impersonate people and trick others known to those who’ve been impersonated into wiring money to them, for instance.
This means that now is as crucial a time as any for financial institutions and banks to understand how cybersecurity threats are evolving while demonstrating sophisticated ways to assure end to end protection of their customers and end users.
Common advances here that should be considered are:
- More robust biometric-based verification system in addition to traditional password and SMS-based two-factor authentication solutions
- Enhanced protection for eKYC systems and processes, to defend against potential attacks
eKYC solutions allow financial institutions to tap into more markets and a bigger user base, to offer a wide variety of services online itself and reduce the need for manual paperwork or physical branch visits.
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While the existing types of biometrics, AI and machine learning backed innovations bring a semblance of security to these processes, on the whole, as the industry grows and the range of solutions provided online increase, more reliable safety measures and processes will have to be put in place on a global scale. As both innovations and threats evolve, and as the digital banking arena grows, multi-factor identity verification and threat response measures will have to keep up to ensure users are always protected from attacks no matter where they access their funds and accounts from, keeping in mind that there is a larger shift towards use of multiple portable devices today.
These parameters on the whole will serve the needs of individual users and large enterprise companies better.
As banks offer more solutions through their mobile banking apps and digital banking process, they will have to redefine their customer on-boarding process and customer identity verification methods to allow users a safer experience across multiple channels over time, but protection from fraud will always be priority.
