Bank Omni-Channel Security and Customer Experience Challenges

 Author(s): , Posted on November 4th, 2014

The era of omni-channel banking is here: Today’s digitally-empowered customers initiate financial transactions via mobile devices while on the go, view details on their bank website at work, and complete transactions at video-enabled self-service kiosks at the nearest branch. Banks are working hard to offer a seamless, consistent shift from one channel to another – all in real-time, from anywhere, anytime, via any device.

If multi-channel banking introduced customers to different choices or touch points for everyday banking needs – mobile app, ATM, branch, social banking and website – Omni-channel banking is all about the convergence of traditional brick-and-mortar branches and digital channels to create a unified customer experience.

The benefits are profound: For a customer, it means instant and consistent services and access to information in real-time, seamlessly delivered across multiple channels. For the bank, it means moving away from a siloed channel environment to an integrated Omni-channel system to drive bottom-line growth.

Here’s an interesting statistic to consider: While the Internet remains America’s most popular banking method, mobile banking is steadily gaining momentum and is now preferred by more than 10 percent of consumers, according to a recent survey by American Bankers Association in ABA Survey: More Consumers Embracing Mobile Banking. The second most popular way to bank—visiting a branch—increased to 21 percent, while those preferring to use ATMs rose to 14 percent. While the number of channels has increased, so does the number of transactions. Clearly, the rapid convergence of disruptive technologies such as social media, mobility, and big data, along with a plethora of smart mobile devices is making banking through disparate and inadequately synchronized channels obsolete. Legacy platforms and complex IT systems make banking through multiple channels that are disconnected or “do not talk to each other” extremely complicated.

Add to this, we have intense competition from giants like Google and Amazon who have entered the playing field to serve a new-generation of mobile customers to increase pressure for banks to compete with more nimble competitors. As these organizations offer new and enhanced ways to interact with consumers, they will come to expect similar services from their financial services providers. In this wave of digital proliferation, how can banks capitalize on Omni-channel banking to deliver personalized services across banking touch points? How can banks ensure security and privacy of information across channels, amid significant concerns about identity theft, data fraud and targeted attacks?

In light of these trends, protecting sensitive customer data and networks has become a complex proposition today. The network perimeter model of yesterday falls flat in the face of advanced attacks, ensuring that data can no longer be contained within traditional environments. Banks need to look past and beyond entry points and embrace advanced identity and credentialing solutions, while at the same time enhancing user experience.   As banks rollout Apple Pay, even they are embracing this trend by leveraging contactless payment technology and security features built right into the devices that consumers utilize every day.

Biometric is the Key:  While customer experience is at the core of Omni-channel banking, security and meeting regulatory requirements are among the top concerns for banks. With Omni-channel comes the need of Omni-security: one that takes into account secure authentication across channels while leveraging biometric and enhanced cybersecurity capabilities. For instance, using technologies such as fingerprint or facial recognition, banks can instantly identify and authenticate customers to undertake transactions across channels – branch, mobile, or via their website. Similarly, using a mobile user authentication solution, banks can minimize the risk of identity theft, by adding a layered defense, providing high authentication fidelity and enhancing customer convenience through a biometric-based multi-factor authentication (MFA) solution on mobile devices. By leveraging active and passive MFA techniques, while implementing frameworks to allow for timely implementation of these tools, organizations have the capability to provide a common customer experience across their various distribution channels.

Advanced Encryption Techniques for Fool-Proof Security: Traditional security measures haven’t kept pace with today’s accelerating frequency, scale, and sophistication of cyber-attacks. Financial organizations need a more radical approach to protecting data and systems critical to their operations. For securing mobile transactions, protecting branches operating in remote regions, and safeguarding ATMs, banks need advanced encryption technology designed to make communication endpoints invisible to unauthorized users and secure data-in-motion across any network. Unisys recommends a new approach: creating a community of interest (COI) around important assets, then safeguarding them by applying encryption automatically on communications between all users.

Leveraging the Data to Know Your Customer: While security is fundamental, enhancing customer experience and engagement is key to maximizing revenue share and profitability. A majority of banks today struggle with both structured and unstructured data from various sources and systems – email, customer documents, website, blogs, and social media. On the other hand, digitally-empowered customers today are beginning to ask – “Is my bank familiar with what products and services I actually want?” “Can they deliver a unified, inter-connected experience across branches and devices?” To stay ahead of the curve, banks must look at ways of harnessing this data deluge to know what the customer wants, how they want it, and when they want it across various banking channels and transactions. Banks must implement advanced analytical capabilities to analyze and organize the information from various channels to understand the customer persona and potential buying patterns. This will enable them to offer targeted information and services to enhance the user experience for each channel, subsequently improving customer acquisition and retention.

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