For Better Banking, Is Consumer Control Actually Key?

Consumers want control — everybody seems to know that.

But what you probably don’t know is that consumers want the type of financial services control that could potentially reduce their risk for fraud and leave them responsible for more authentication tasks, according to fresh PYMNTS research.

That research, which is called “The Consumer-Centric Authentication Study: Transforming The Consumer’s Digital Banking Experience,” served as the foundation for a recent PYMNTS podcast discussion between Karen Webster and Sherif Samy, SVP North America at Entersekt, which helped craft the report.


Among the main findings? More than half of consumers — 54.1 percent — believe chances for fraud would decrease if they had more control over their transaction through their digital banking channels. (The report is based on a nationwide survey of 2,835 U.S. consumers, so the findings are solid enough to take to the bank, if you will.)

Consumer Desires

That desire among consumers did not grow and become a meaningful force in a vacuum, as Samy explained to Webster.

“Consumers are getting more and more concerned about the data [that] is out in dark web and can be used for harm,” he said.

Indeed, that finding would seem to argue against the common and reasonably supported notion that consumers have become numb to data breaches and hacking, and perhaps even resigned to the fact that they will fall victim to identity theft, stolen funds and other types of fraud that are anchored to online and mobile devices.

Financial institutions can use that consumer desire to their advantage.

“The more information I have as a consumer, the more involved choices I can make, and the more trust I have in the organization that gives me that information,” Samy said.

Other findings from the study show that consumers want to take tighter control of the steering wheel when it comes to mobile banking and financial services. For instance, the PYMNTS-Entersekt research found that more than half of consumers say they would make more mobile banking transactions if they had more control over their authentication processes.

That matters because, in general, mobile banking services cost less to operate than do transactions that take place inside bank branches.

More Authentication

The research also produced this fact: 86.5 percent of consumers would like to add transaction-specific authentication methods to their digital banking experiences. In fact, the research found that 76.7 percent of consumers — three quarters of them — believe gaining more authentication control would give them more fraud liability, but they would still opt for more control.

As Samy told Webster, such a finding reflects the risk-analysis decisions going on in consumers’ minds. In short, do they take on more control of their digital and mobile banking, even if that might open up the door to more fraud, or do they leave all that to financial institutions?

No matter what, he said, banks and credit unions have another advantage when it comes to such risk analysis: Few businesses or institutions are as trusted by consumers as are their banks and credit unions.

“They have a golden opportunity to engage customers,” he said.

The research also detailed the generational differences found in digital and mobile banking. For instance, just 44.1 percent of Generation Z and 55.2 percent of seniors pay bills via mobile app. Part of the reason for that, at least from the senior point of view, is the inertia involved with writing checks or using other methods of paying bills.

As for members of Generation Z, they are at the forefront of P2P payments. Also, Samy said, those younger but rising consumers are not so much interested in absolute privacy as they are security and efficiency and — this is the big one — a satisfying consumer experience.

“They are fine with you knowing how much money they have, but you cannot go and interfere with their experiences,” he told Webster.

Need more proof? Go talk to a younger consumer about displaying for semi-public consumption all the transactions they make on certain P2P tools.

The big challenge with all this — providing those secure mobile and digital banking experiences — is how much friction to introduce, and how much friction consumers will accept. But one thing is becoming much more clear as the new decade approaches: Consumers seem to understand the stakes involved, and they want more control over their financial services and all the data and other things that come with them.