The increasing use of mobile applications and digital payment services has not only paved the way for new banking models, but also highlighted the importance of user experience in digital banking. Banking applications are now developed completely on cloud, support multiple platforms, and use AI/ML extensively. Security, a critical aspect of digital banking, has transformed with innovative capabilities like self-service identity verification, passwordless access, risk-based multi-factor authentication (MFA), behavioral analytics, and encryption capabilities.

The underlying reason for developing the above-mentioned capabilities is to provide consumers with a secure banking experience, where they can access their financial data without fear and conduct transactions with ease. For the bank employee, it is all about working with the latest digital services and securely accessing them from anywhere. It is important to understand that user experience, be it consumer or workforce, is all about providing convenience and establishing trust. Only then can a financial institution remain ahead of the competition.

Consumers value security but hate friction

Consumers do want enhanced security controls, but if it hampers their authentication process with additional verification steps, they simply abandon the application and change their banking institution. Growing comfort with biometrics and increasing adoption of mobile devices for accessing financial information and conducting payments have changed consumer habits significantly. The modern consumer desires a trusted platform that facilitates digital transactions in the least frictional way.

Secure account opening from mobile

COVID-19 has impacted the world in an unprecedented manner. There has been a surge in online banking services, including consumers preferring to open their bank accounts without visiting a branch. Options like website/mobile account opening are now being readily offered by financial institutions to capture new customers.

Speed is everything 

Be it remote account opening or transacting funds, if it takes more time consumers leave the platform. Especially for account opening, if the process took more than 10 minutes for online/website or five minutes on mobile, the abandonment rate goes up by as much as 40%.

Fraud prevention is critical to establish and maintain trust  

With over 779 billion transactions worldwide in 2020, contactless and digital modes of payments are expected to grow at a 13% rate in the coming years. But as payments move online, fraudsters are following. Criminals are intercepting CNP transactions to steal customer information and empty their accounts. Thus, it becomes imperative that payer authentication protocols like 3DS get implemented for all credit and debit card transactions. Similarly, regulations like PSD2 in Europe that focus on strong customer authentication need to be replicated across the world.

Changing employee preferences

These changes don’t just apply to consumers. As most of the banking workforce was asked to work from home in the past year, frictionless authentication became a key driver for success. Employees trust a banking platform that verifies their identity, checks their device security, and performs contextual analysis for risk evaluation before granting access to consumer data. Employees do not like redundant authentication methods like multiple passwords or OTPs to access different business applications within the organization. As such, there is also a growing need for document signing capabilities on mobile for document verification and application processing.

Why are financial institutions interested in IAM?

  • Facilitating secure, seamless digital banking services is a key differentiator
  • Improved security posture means high customer confidence (positive impact on bottom line)
  • Prevent fraud by addressing issues like CNP, account takeover, and identity theft
  • Data security is the No. 1 priority across financial institutions
  • Ensure adherence to regional compliance to prevent heavy fines and reputation loss
  • Automation and self-service options improve employee productivity and reduce help desk burden

Curious to learn more? Join our upcoming webinar “Leveling the financial playing field – competing in the digital banking era” to gain more insights about how organizations in the financial sector can stay ahead of the competition by adopting the new security paradigm.