Security IQ: Banks Can Build Trust By Understanding Consumer Knowledge Gaps

Call it financial IQ.

Not every customer has the same level of knowledge when it comes to telling an individual retirement account (IRA) from an initial public offering (IPO) or an annual percentage rate (APR) from an application programming interface (API). The same is true with payments and payments security. While every bank customer wants their data and deposits secured, not all of them share the same level of sophistication.

It is a reality that is not lost on Rachel Scheuerman, director of Product Solutions for digital card services platform Ondot Systems. As she told PYMNTS, not every bank customer has the same level of understanding of the various tools at their disposal when it actually comes to protecting their security. It’s a key consideration, she said, when financial institutions (FIs) consider marketing and messaging on security features.

“Every FI has a wide range of customer segments, different generations and different comfort levels about how to use technology or understand how features work,” Scheuerman noted.

Younger consumers — millennials and Generation Zers — are at the top of the knowledge heap, she said. They already know what to look for and where to look for it. The challenge with that demographic segment isn’t in education; it’s in actually executing on the features and making them reliable. That’s because these consumers “expect a certain level of technological advancements to be in place with anyone that they’re doing business with regardless of the industry,” Scheuerman said.

But for consumer segments that aren’t as familiar with — or as trusting of — the online experience, the challenge is in making them aware of the options and overcoming consumer resistance. The good news, she said, is that digital security tools, when properly understood, don’t just make a consumer feel safer — they elevate the entire eCommerce journey.

A Secure Customer Is A Happy Customer

Security is a massive selling point for consumers, Scheuerman observed, even when they aren’t fully aware of the need for it. Take tokenized payments credentials as an example. If one were to ask the average consumer what they are or how exactly they work, they probably wouldn’t know.

But more broadly, consumers are aware that they want secure eCommerce transactions, particularly over the last year or so as their lives have been so drastically digitized. They should know, Scheuerman said, that tokens represent the safest way to conduct eCommerce transactions. The simple explanation: By replacing the sensitive cardholder details with essentially random data tokens, their personal data is never displayed or stored.

“This method is really becoming the foundational component for merchant cards on file as well,” she explained. “The merchant is only storing payment tokens in their database rather than the actual card number. In the event of a breach or anything like that, truly sensitive information that somebody could do damage with is not there and doesn’t even exist for the fraudster to take action with.”

That makes the consumer safer. It also makes their shopping life easier because if their card is stolen or expired, they don’t need to go back through every digital wallet or merchant with their card on file. The data token provides for the automatic update that contributes “that ease of use and ability to quickly upgrade the experience.”

That upgrade in experience exists across the board with digital controls, such as the ability to open an app and instantly close a stolen card as opposed to spending time on the phone with customer service. What the consumer wants is a more seamless experience. What the bank needs to deliver is an experience that is also increasingly secure.

Meeting the Customer Where They Are

There are many touchpoints in a consumer’s relationship with their FI, but the card relationship deserves special focus, Scheuerman said, given the frequency with which consumers interact with it.

“We see that the card is the most common interaction point consumers have with their financial institution,” she noted. “They are using that card for swiping, tapping and inserting more than they’re calling into customer service, more than they’re going through their branch drive-thru, more than they’re getting money out of an ATM or going into a branch. Providing them with compelling experiences to get them more engaged with their card product leads to a more satisfied customer.”

The exact process of building those connections can vary and is largely dependent on the wants and needs of a particular customer base. Real-time push messaging is an effective communication strategy and a great way to send timely and secure information via a secure application, she said. And because customers have enabled these notifications, they are more likely to take action (if needed) when a message is received.

The future, she said, will increasingly lean on things like location controls to affirm that the cardholder making a transaction and a cardholder’s phone are in the same place. That data can help the bank and consumer easily recognize where a transaction happened and can lower the occurrence of fraud. The goal is to put the right tools into consumers’ hands so they can be their own best security advocates, and to present them with channels to easily access those tools.

“One of the important pieces is to understand your customer’s preferences and know how they want to be communicated with — and to be able to do that in real time with a secure connection, so they know it’s you and they can immediately take action,” Scheuerman said.