Grasshopper on the Importance of Offering Secure, Frictionless Money Mobility

All financial institutions (FIs) may insist the customer is their priority, but few offer truly customer-centric services. Digital-only banks without branches that allow face-to-face interactions must make sure personalization is prioritized in services.

Christopher Mastrangelo, chief compliance officer at Grasshopper, a New York-based digital-only bank focused on client-first policies and innovative, cutting-edge technology, said his organization has invested in both the technology that provides security around money mobility and the team members who have customer-centric values matching those of the organization’s leadership.

“Certainly, [there is] an investment in technology, the protection of personally identifiable information, security and also industry-leading fraud services, both at account opening and transaction levels,” said Mastrangelo. “Those are solutions and investments that we make that are part of being a client-first organization. The second part of it is a strong customer service team and really being able to extend that same personal outreach and that personal touch that a bank with branches would provide. I think we have really built strong client relationships through those two means.”

Securing Friction-Free Money Mobility

Money mobility and removing friction from the customer experience are in no way mutually exclusive, or even things that the industry must balance, Mastrangelo said.

“I believe the industry as a whole can move toward a more instantaneous form of money movement that’s also frictionless and secure for the client — and that’s a big part of what we’re building here at Grasshopper,” he said. “The customer experience and high security are both critical components of our strategy, and that starts at the account opening process, but it also extends to the verification of transaction parties and counterparties, and also [ensuring] protection of [personally identifiable information]. We know that the customer wants that frictionless experience. They also want to know that their information — their bank accounts — are secure.”

Mastrangelo predicted that biometrics will likely become an increasingly popular tool in the frictionless security space.

“We have seen the industry moving toward reliance on or use of biometrics, both physical and behavioral, as a means for authentication,” he said. “I think that checks both of those boxes — frictionless and secure.”

Ensuring Business as Usual

In addition to providing customers with these conveniences, Grasshopper uses the same strategy to provide businesses with the same amenities it provides individual consumers, including money mobility.

“Business owners have now come to expect that same level of digital convenience and protection that consumers have come to know,” said Mastrangelo. “Our mission is to serve that small to mid-sized business sector by providing frictionless, secure banking services.”

FIs can avoid friction and vulnerabilities by prioritizing employee training and education, he said. While many organizations focus on information security teams when training employees for fraud awareness, other key teams to train include sales, customer service and product development. It is also important to train these employees to continuously monitor incoming data and information as the first line of defense.

Additionally, Mastrangelo said, it is vital that employees know who they are transacting with, since no one should assume entities are who they say they are without verification.

Building Better Partnerships

Ensuring banks create the right partnerships while working with vendors and FinTech partners that provide the technology the bank uses should also be a top priority to ensure high security. The key to this is ongoing collaboration, Mastrangelo said.

Early in the collaboration, Grasshopper communicates a monitoring plan with vendors and other organizations with which it partners. Based on this, the two organizations can better ensure alignment and understanding of each side’s responsibilities and how the organizations can provide oversight. Mastrangelo also believes that compliance is key to any successful partnership, reducing friction and providing a better customer experience.

“A critical part of our offering is extending our compliance program to our FinTech partners and ensuring that the FinTechs are operating the front ends that meet our regulatory compliance standards and parameters, and that’s critical because having a strong vendor management program is really the key element there to really ensure a successful bank and FinTech partnership,” he said.

The most important thing a bank can do is ensure customers know they are on their side, said Mastrangelo.

“Having a bank there to support is, I think, really the key component here and can go a long way to future success,” he said.