Customers want fast, efficient interactions when transacting with companies, but they also want to ensure their identities, payment card numbers and account information are guarded, protections that can sometimes delay and complicate CX.
Maintaining the balance between customer experience and cybersecurity is tricky proposition. “Fraud prevention is key to any financial institution, but it’s easy to go overboard and be too restrictive,” said Angela Faust, chief administrative officer for Credit Union of Texas (CUTX). “There is a delicate balancing act to adequately prevent fraud losses while reducing the impact to member (all customers are shareholders, so are referred to as members) experience.”
1. Offer Proactive Fraud Alerts
Faust shared that CUTX, increased alerts and controls via its card controls app, enabling members to turn their debit and credit cards on and off as needed, as well as turn off spending at certain locations. Near real-time alerts also provide almost immediate notification to members if their card is used.
Additionally to prevent fraud through online banking, CUTX moved to multifactor authentication and set daily and monthly limits to reduce any potential losses.
“It’s also important to note that there are software solutions and vendors who monitor potential fraud activity without having to implement additional member restrictions,” Faust said. “Institutions have to take a very hands-on approach to balancing fraud risk and member experience. If restrictions are too tight, they may overburden members and prevent them from being able to bank as they need to. However, if restrictions are too light, there is a risk of account takeovers.”
It’s up to institutions to determine their risk appetite and set their controls accordingly, Faust added. There is no way to please everyone and there is always a chance a financial institution may lose members because of their restrictions, but that is why continuous monitoring and adjusting is important.
2. Use Fraud Prevention Tech in the Background
“Perhaps the most frustrating thing about our advancing technological world is the pace at which bad actors continue to infiltrate it and perpetrate fraud,” said financial services industry analyst Trent Fleming. “Today’s end user, business and consumer, is mobile, and dependent on technology for many things, including financial services. Providers are challenged to make each interaction as seamless and quick as possible, but must constantly consider fraud.”
Customers want to do almost everything, from making a purchase to opening a new brokerage account, with as few taps on the screen as possible, Fleming added. To prevent fraud, organizations must partner with vendors that can bring fresh approaches to fraud detection and prevention. The key is to stop the fraud before its starts, so that means using fraud technology that will work in the background and that is tailored for the device the customer will be using, which will likely be a tablet, phone or wearable device. Leveraging touch, including drop down boxes, suggested auto-fills, and swiping or tapping, will provide a more frictionless experience.
“Fraud technology will increasingly be working in the background to identify ‘normal’ customer patterns in order to be able to identify ‘abnormal’ or fraudulent ones,” Fleming said. “We are learning that even the way a customer enters data or swipes on the screen may be uniquely identifiable in concert with other information we have about them.”
3. Use Updated Integrated Verification Strategy
Brian Dean, founder of Exploding Topics, was one of several marketers and company executives who recommended using an updated Integrated Verification Strategy (ISV).
“Most of the businesses today still rely on insecure and out-of-date IDV methods like knowledge-based authentication (KBA). Additional authentication layers on top of outdated systems, such as these, will result in false rejections. Users may, for example, be locked out of their accounts because the data held by businesses is no longer accurate.”
Rejecting a customer’s accurate credentials means calls, emails or texts to the contact center, sometimes more than one time or by more than one method, meaning poor CX, and potential lost sales. An integrated IDV approach, on the other hand, combines online, offline, and device-based technologies to create a complete image of any consumer, providing a better fraud protection strategy and less friction for the customer, according to Dean. “Passive authentication technologies such as behavioral biometrics and mobile network operator (MNO) data can be used as part of an integrated IDV approach. They can be leveraged across several channels to produce tailored data based on a person’s typing rhythm, screen swipes, or mouse movements. Biometrics can also improve your client experience and fraud protection procedure because they can authenticate in five seconds, which is faster than passwords and PINs.”
Device-based solutions, such as device-to-identification linkages and identity verification using MNO data, can help eliminate incorrect rejections and improve the user experience, Dean added. A fraudster, for example, cannot open two accounts from the same device without triggering an alarm.
4. Ease Accessibility to Customer Service
Improve customer service, advised Ella Hao, head of digital marketing for WellPCB. “We have a 24-hour phone line and live chat on our website for customer support. This can also be helpful if you’re trying to figure out what’s happening with a fraudulent activity that has been detected by the customers — the best way of preventing it is by being responsive to your customers.”
Hao added that while some businesses may be tempted to cut corners on customer service as a way of saving money, it’s more important than ever before because fraud prevention doesn’t help if customers leave due to poor CX.