Keeping Cybercrooks Out Of Digital-First Banking

PYMNTS recently reported Federal Trade Commission (FTC) figures finding, “More than 200,000 Americans were scammed out of $145 million relating to the pandemic since the beginning of 2020.” It’s one of many such warning to come from FinCEN and other financial watchdogs as the digital-first era dawns, awash in promise but hounded by cybercrooks.

With 6 in 10 financial institutions (FIs) turning to digital channels for customer acquisition and the mobile experiences those customers now expect, digital-first banking is much on the minds of consumers, regulators and, most assuredly, bad actors. It’s a situation demanding action.

The latest Digital-First Banking Tracker® done in collaboration with NCR, notes that “FIs are devoting more money than ever to fraud prevention as more consumers go digital. Banks are expected to boost their cybersecurity budgets by 15 percent in 2021 compared to previous years, some spending more than $3,000 per employee on these upgrades. This development comes as 68 percent of fraud experts report increases in cybercrime over the past year.”

Quick And Seamless Security

This new vigilance is the result of rampant cybertheft throughout the pandemic, from brazenly diverting government Paycheck Protection Program loans to the bad businesses of credential theft and account takeovers. Much of this is caused by criminals sensing opportunity. It’s on banks to deter them.

“For FIs that want to acquire new customers digitally, first and foremost they need to have an account opening/onboarding process that is quick and seamless. Any friction during this process, regardless of channel, spells doom for the FI and will likely result in an unopened or incomplete account,” Douglas Brown senior vice president and general manager NCR Corporation, told PYMNTS.

Commenting on the preponderance of fraud attempts using stolen identities and synthetic identities at present, Brown added, “FIs can leverage a combination of various know-your-customer authentication methods along with biometrics such as facial recognition compared to a photo ID. Utilizing these types of tools can help reduce friction while keeping customers safe.”

Brown also pointed out the growing use cases for biometrics, calling facial and fingerprint recognition a good start. “[Other] biometrics such as typing cadence or screen pressure are additional security features that can be put into place to protect customers,” he said.

Consumers Getting Wise To Scams

While it’s the FI’s job to protect peoples’ deposits and transactions, consumers have their part to play as well. Fortunately, the general population is getting savvier about cyber scams.

“Bank customers are paying more attention to security best practices, but banks can also solve many of these issues by adopting biometric protocols that are almost impossible for fraudsters to fake. Customers are largely receptive to these security methods, as surveys find that 71 percent of bank customers are willing to provide this data to their FIs,” per the Tracker.

Of those willing consumers, 40 percent like fingerprint-based biometrics on banking apps, “while one-quarter preferred facial recognition technology.”

And knowing what customers like is half the game. More digital-first FIs are catching on.

“Protecting banks’ digital-first innovations is crucial to helping them establish trust with customers, especially as more and more consumers come to expect and even appreciate these solutions,” per the Digital-First Banking Tracker® “A recent survey found that 27 percent of bank customers reported improvements in customer service over the past year, thanks to new digital services. This trend is expected to result in a long-term shift toward digital banking, with 53 percent of new users planning to continue using banking apps even after the pandemic ends.”