IIn an increasingly competitive industry,
consumer banks need to be able to
engage with their customers across
various digital channels while minimising
and mitigating against fraud. While the
optimisation of customer engagement and
fraud prevention might seem like mutually
exclusive challenges, the demand upon
resources to meet both simultaneously
and effectively can present a real
dilemma for banks. According to a recent
research report, as many as a third of all
businesses are unable to develop digital
capabilities because of the time invested
in fraud prevention.
FEATURE
a new set of risks to banks and their
users as adversaries learn to infiltrate
new touchpoints and features. These
additional costs can pose an even
greater strain to a financial institution’s
(FIs) dwindling resources. With this in
mind, it’s no surprise that more than
a third of enterprises perceive fraud
as a ‘significant impediment to digital
innovation efforts, forcing them to slow
the expansion of their features and
functionality as they seek ways to mitigate
the new risks these innovations attract’.
Fraud prevention on the spot
Mzukisi Rusi, Head of Technology
Delivery, Entersekt
With the number of data records
breached in 2019 exceeding the four
billion mark, it’s unsurprising that fraud
prevention and regulatory compliance
are highest on the agenda for financial
institutions (FIs). According to a report
by Javelin, 52% of consumer banks plan
on implementing additional security
solutions to keep customers’ accounts
secure, and 46% want to invest in better
identity verification measures.
As many as a third
of all businesses are
unable to develop
digital capabilities
because of the time
invested in fraud
prevention.
While these steps might be necessary
for banks, the trade off in allowing
customer engagement, digital innovation
and user experience to fall by the
wayside can prove detrimental to a
bank’s capacity to modernise and
compete. The same report showed
that less than a third (28%) of banks
demonstrated an interest in increasing
support for new channels.
Not simply a competing demand, the
development of customer engagement
methods and channels can also pose
Companies don’t need to perceive the
improvement of fraud prevention and
customer engagement as a dilemma.
In fact, research has shown that, when
done right, the former can actually
work alongside – and even catalyse –
the latter.
From the consumer’s perspective,
they want to receive more information
about their transactional activity,
in real time, and greater autonomy
to authenticate it. Through digital
channels, FIs are able meet these
demands for more frequent and
analytical insight and increased control
while upholding the necessary levels of
compliance and security. With this in
mind, banks and their customers don’t
have to suffer from any sort of trade-off.
This can be – and is – encapsulated
in the shape of innovative in-app
messaging solutions which incorporate
instant communication with high levels
of security and a frictionless user
experience. A customer can be
alerted when suspicious activity
occurs on their account and with the
option of responding immediately by
approving or rejecting the transaction
before it’s processed. This eliminates
frustration and other effects caused
by false declines, while putting the
customer in control of transactions
and fraud prevention.
Optimising user data to
personalise their experience
Many banks are beginning to recognise
the value of the historical data they
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