Why it is time to end the “one-size-fits-all” approach to digital banking

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Xavier Larduinat, Head of Banking and Payment Innovation, Gemalto

Over the last decade, the rise of the smartphone and other mobile devices have transformed the banking experience. Customers now expect to log in, check their balance and make payments instantly on multiple platforms, wherever they are. While banks have responded well for the most part, offering new digital services such as mobile apps and online portals – in some cases even experimenting with new authentication methods like iris scanning – there is still much work to be done to move away from the “one-size-fits-all” approach to digital banking.

One size to fit them all?

What exactly do we mean by “one-size-fits-all”? There is a tendency to apply new security policies and innovations in the customer journey across the board, without considering the unique requirements of each individual consumer. With the rise of fintech start-ups and the imminent PSD2 (Revised Payment Service Directive) regulations set to increase competition in the sector, the customer experience is becoming an increasingly important differential, so a more nuanced approach is necessary. Banks need to ensure they are one step ahead of competitors in developing an engaging and easily navigable customer experience, and personalisation offers a way of achieving this.

Today’s end users demand a personalised experience, as well as a more secure and convenient banking journey. We recently commissioned a survey into consumer expectations, which highlighted the need for robust security policies placing the individual consumer at their core. 67% stated they would be unlikely to shop or do business again with an organisation that experienced a security breach, while over three quarters (77%) believe that companies should have better protection online. Furthermore, the appetite for biometric authentication, identified by 55% of consumers as something they would be willing to use for mobile banking, demonstrates the desire for a customer journey based around individual characteristics and preferences.

A smarter, tailored approach

Technological advances mean that it’s possible to construct a comprehensive security policy that adapts to individual needs in real-time. One such approach combines machine learning, artificial intelligence, and adaptive biometric authentication to offer convenient and robust protection. Using these techniques it’s possible to intelligently and automatically analyse a user’s banking profile and identify any unusual behaviour, requesting an additional layer of authentication if necessary. For example, if a user made a purchase every lunchtime at the same sandwich shop, but then suddenly completed a transaction in another country, the system would recognise the unusual purchasing pattern and require the user to provide additional verification, perhaps through a fingerprint scan.

A solution like this offers benefits for consumers and banks alike. For financial institutions, it allows them to cut operational and administrative costs, as it instantly picks up unusual purchasing patterns without the need for human involvement and provides bank managers with detailed information on the nature of the potentially fraudulent activity. Furthermore, it enhances risk management processes by establishing multiple layers of assessment, such as device, location, and user behaviour. The customer, meanwhile, benefits from an effective security solution that doesn’t jeopardise the seamless banking experience they have come to expect from digital services. It also provides them with a personalised authentication journey, altering the number of verification steps required based on the transaction being completed and the user’s profile.

Striking the balance between security and customer experience

This balance between security and convenience is becoming increasingly important for banks as they roll out digital services. It’s all very well investing in multi-layered security policies, but if they make the customer experience clunky or prevent personalisation, then it may drive people away towards rival mobile apps, something traditional banks can ill afford in the post-PSD2 landscape. The same survey we referred to earlier found that nearly four in ten (38%) of customers would leave their bank if another provider was offering a better service, which shows why the emphasis on security cannot involve compromising on the customer journey. That’s why the best solutions maintain the frictionless digital experience, but come equipped with sophisticated security mechanisms built around each individual customer.

In our increasingly mobile, personalized world, the “one-size-fits-all” approach to digital banking solutions is no longer sufficient to meet customer demands for increased security and a convenient customer experience. As our research shows, users want to feel as though banks are actively shaping the customer experience around their individual preferences, and they want to feel safe. When developing new digital experiences, banks need to invest in security solutions that can adapt in real-time, provide the necessary multi-layered protection while at the same time maintain a frictionless customer journey. It’s time to bid farewell to the old world and embrace a new era of truly personalised banking.

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