Only a few years ago — as a consumer — I was skeptical of purchasing anything through my mobile device. And for good reason. It didn’t feel safe, and the experience was a bit clunky with no easy way to purchase on a tiny screen.
Fast-forward to 2018 with an iPhone X in-hand, I now expect to make a fast, easy and seamless transactions by opening an app on my device, clicking the right button to confirm my purchase and then looking into my screen to verify my identity. And, if I can’t do the process above, I usually forget to purchase it on my computer that’s in my home-office, what seems like miles away from where I am (even though I am just down the hallway).
The digital revolution has made its way to banking and it’s here to stay. It’s convenient, it’s frictionless and it’s instant, which inevitably drives more sales. And with PSD2 in the European Union (EU) – ensuring better security for consumer payments with strong customer authentication – it is going to be even safer.
There is a misconception that with increased regulation, comes increased costs, complexity and user friction. These are valid points, but they are not necessarily true. If banks leverage PSD2 as a catalyst to enable a secure digital banking experience, it will be an advantage as new competition emerges.
Banks should leverage a digital identity to not only meet compliance, but to also prioritize a customer-centric approach. By embedding a smart credential on a mobile device — as well as using next generation authentication methods such as biometrics, device reputation and adaptive authentication — banks can exceed customer expectations with a transparent user experience via a platform that delivers innovative new products and services, while mitigating risk.
And how can banks outside of the EU capitalize on this regulation? Observe, learn and have a proactive, strategic plan in place to ensure trusted identities are at the foundation of your business decisions. This will ensure that banks have the necessary tools in place to not only create a secure environment and comply with upcoming regulations, but also be at the forefront of the digital revolution.