Digital Banking’s Delicate Dance

According to recent surveys, consumers are more concerned with simplicity than security. But while many shoppers have been conditioned by modern technology to place convenience far ahead of safety, security breaches can still pose serious problems for banks and other financial institutions, including fleeing customers, lost profits and PR disasters.

Finding the right balance between simplicity and security in digital banking is so important, according to John Dancu, President and CEO of IDology, a digital security firm, that it could be the single biggest challenge digital and mobile bank offerings face as they look to implement tougher security features.

For this month’s Digital Banking Tracker cover story, PYMNTS spoke with Dancu about how banks can keep pace with increasingly innovative fraudsters while keeping things simple for customers.

Here’s a preview:

Dancu stressed that in the age of online fraudsters and other bad actors, companies need to be ever vigilant when verifying their customers, particularly during account setup. He said that many consumers would be surprised by just how easy it is for identity thieves to gain sensitive information on nearly anyone.

“You can’t sit still in this business, that’s for sure,” Dancu said. “Fraudsters today, they can go on the dark web and purchase your names, your address, your Social Security number. So, they have that exact information.”

To combat that wealth of information, he said, businesses need to rely on multiple layers of security, without disrupting the customer experience.

“This is all a matter of layers and being dynamic,” Dancu said. “I think the key to banking is to make it really simple and easy for people to get their information and to conduct transactions. The more you can do under the covers, relative to verification, the better. It just has less friction.”

Around the Digital Banking world

According to research conducted by Nielsen-subsidiary Informate, people are spending more time than ever before on their smartphones. It may come as no surprise that social media eats up a large chunk of the average consumer’s day, and companies around the digital banking industry have recently made moves increasingly designed to connect with their customers on social networks.

Last month, Absa became the first bank to offer banking services via Facebook’s Messenger feature when it launched ChatBanking for Facebook Messenger. Others also looked to jump into the chatbot banking game, like Kasisto, a Silicon Valley research lab. The company debuted MyKAI, a mobile banking chatbot that will be available for integration through Facebook Messenger, Slack and other SMS messaging platforms.

Meanwhile, Singapore’s financial institutions are turning to social media for security. The nation’s banks are testing the use of Facebook IDs and Twitter usernames as a means of account access and payment.

The August edition of the Digital Banking Tracker, powered by Urban FT, features the latest news and analysis across the FinTech and consumer banking space, along with the rankings of 78 players around the industry, including eight new profiles, for their readiness to seize this new banking reality.

To download the August edition of the Digital Banking Tracker, click the button below.

About the Tracker

The PYMNTS Digital Banking Tracker brings you the latest news, research and expert commentary from the FinTech and consumer banking space, along with the rankings of more than 70 companies serving or powering the digital banking sector.