Is your mobile banking on par with Instagram and the CIA?
Air-tight security is the backbone of any financial institution, especially banks and credit unions. Due to recent high-profile data breaches at Equifax, HSBC and many other organizations, consumer trust in all types of online services has dramatically eroded. Security is now a primary customer concern when choosing a service provider.
Hackers’ technological capabilities continue to advance at an alarming rate and a single breach can severely harm an institutions credibility. As credit unions develop their digital roadmaps, iron-clad security features must be a top priority to stay competitive in the market.
For financial institutions, apps are the fastest-growing frontier for customer engagement. This can especially come into play with younger generations of consumers, since mobile applications could be their first and primary touchpoint with the credit union. As such, the mobile interface disproportionately shapes the way people experience banking, and this trend is likely to keep growing.
Given the heightened concerns around hackers, consumers tend to choose banks or credit unions with leading-edge security features that make them feel safe. People often think larger banks offer better resources and IT security expertise, giving bigger institutions the upper hand in public perceptions of trustworthiness. Thus, boutique organizations like credit unions need to work even harder to prove security parity with the competition.
Thankfully, cybersecurity technology has evolved by leaps and bounds in recent years, making high-quality options available to credit unions at a reasonable cost. By incorporating these features, credit unions are not only able to rival the security of larger banks, but also stand out from the competition.
Typically, there is tension between security and usability. Banks often try to improve security by requiring users to create lengthy, complex passwords and then change them every few months, among other annoying measures. The usage of second-factor authentication via SMS and phone calls is also widespread. While these steps do enhance safety, they take a heavy toll on usability.
The top three barriers customers encounter with online banking are forgetting their username or password, getting locked out after too many incorrect password attempts, or incorrectly answering security questions that they set-up long ago.
In the crowded world of consumer-facing apps, users have many choices. We’ve all come to expect convenience and frictionless user experience (UX) — the kind of interface we’re used to with social media apps, for example. Even the smallest UX friction creates consumer dropoff rates by several percentage points. As such, it’s vital to design experiences with both user convenience and top security as primary goals.
Although passwords are the most common authentication method, businesses constantly struggle to prevent fraud while maintaining a great UX. More advanced technology like biometrics address this issue, leading to a rise in popularity.
Biometrics to the rescue?
As more and more consumers purchase smartphones equipped with biometric matching capabilities, such as fingerprint and FaceID, the technology has reached a tipping point. It’s clear that biometrics will go mainstream within the next two years.
Biometrics-based authentication allows for the real convergence of convenience and security. Users can log into their accounts quickly without needing to remember a long, complicated password. Using biometrics like fingerprints and faces as the key, all users need is their mobile device.
Because biometrics meet the stringent FIDO (Fast ID Online) standards, mobile apps have widely adopted this feature, including FinTech platforms. This technological breakthrough is revolutionizing the way people interact with banks, but the changes are just beginning.
Smartphones will likely become the single point for authentication across mobile apps, web portals, ATMs, and call-in customer support centers. This omnichannel approach makes customers feel secure while greatly streamlining the banking process.
These advances are already in motion. Biometrics will play a critical role in the future of banks and credit unions, especially when it comes to the mobile experience.
Cybersecurity stakes will continue to rise, and we haven’t seen the last massive breaches. Security is no longer a “feature,” it’s the linchpin for digital financial transactions to avoid devastating hacks.
Having a UX that is safe and easy has become a must-have business advantage and if credit unions want their customers to have peace of mind, it is absolutely necessary to offer frictionless yet highly effective security.