Snippet: Years of large-scale, and much-publicized, data theft has us all feeling there’s a target on our back. With the number of online services increasing rapidly, we’re sharing and using our personal details more than ever before. A side effect of this rapid growth in personal information sharing is that we know our personal details are out there in the digital wild, probably being shared among hackers, and sold by crime syndicates.

Years of large-scale, and much-publicized, data theft has us all feeling there’s a target on our back. With the number of online services increasing rapidly, we’re sharing and using our personal details more than ever before. A side effect of this rapid growth in personal information sharing is that we know our personal details are out there in the digital wild, probably being shared among hackers, and sold by crime syndicates.

Breaches are becoming more frequent and more serious, proving that the way we currently protect personal data in the financial industry does not work. The only way to put an end to these breaches and resulting spikes in crime is to start doing things differently.

A wise man once said that doing the same thing over and over again, and expecting a different result, is the very definition of insanity. Let’s take this wisdom to heart and change the way we do things in the financial services, identity, and payments spheres.

One essential change is to make identity protection an active part of consumers’ financial lives. This seems like a big ask, but it isn’t, and the alternative is unthinkable.

Consumers want power

Until now, we have all grudgingly accepted that the most a service provider can do is notify consumers that their personally identifiable information has possibly been stolen, that they are at risk of fraud and need to be extra vigilant, or that a fraudulent transaction has already taken place.

It turns out, however, that this passive approach to identity management is no identity management at all.

The financial services maxim has traditionally been to avoid involving the customer when it comes to security, but we at Entersekt have always believed that customers do want to be involved. They want to feel in control of their identity and other digital assets. They want to be empowered with the choice to say “Yes” or No” to a transaction before that transaction takes place.

And the idea is catching on. As an industry professional explained to American Banker magazine, “today’s identity checks [and] updates happen in the background. We need to reverse that. Every time some provider wants to add to your identity data [or] change it, you need to be notified and can agree or not agree with the change.”

We fully agree – and more importantly, research shows that your customers agree. Even in the US market, where consumer convenience typically trumps explicit security measures, industry thinking is moving in this direction. Research by RSA found that 93% of American digital users want to be involved in choosing how their personal information and accounts are protected online.

In Europe, Africa, and, yes, the United States, we have seen the impact of involving consumers in the authentication process: when customers feel empowered by simple, no-fuss active authentication measures, they feel safer, transact more, and opt into a greater number of digital services. That adds up to higher revenue – despite naysayers predicting the opposite.

Read more about how giving consumers more authentication control can boost banking app usage. 

Going beyond damage control

Entersekt’s technology creates a trusted channel between institutions and their customers. Instead of a customer receiving notifications after an account has been fraudulently opened in their name, and their money has already been stolen, they hold the power to reject a fraudulent attempt of a transfer or withdrawal before it happens via their mobile phone.

Active identity management through user mandates is no longer optional. Globally, regulators are prescribing it, such as GDPR’s mandate that requires users to explicitly approve access to their data. Its benefits are clear. The time is now to change popular approaches to information security and user authentication.

Read more about how our customer authentication solution could benefit you.

Our recommendation is simple and absolute: empower your customers by putting them in control.

This post has been updated from its original version, first published on 14 September 2017.

Let Entersekt help you move beyond passive identity management. This email address is being protected from spambots. You need JavaScript enabled to view it. to learn how you can empower your customers without encumbering them.

 

 

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Dewald Nolte

Dewald Nolte

CCO

Dewald co-founded Entersekt in 2008. He’s responsible for defining our commercial strategy and ensuring that everyone works together to achieve our goals. Having been involved in several projects further afield than Entersekt, including the A-Darter missile program for Denel Dynamics, his technical ability is as impressive as his solid business acumen.

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Entersekt is an innovator of customer-centric fintech solutions. Financial services providers and other enterprises rely on our patented mobile identity system to provide both security and the best in convenient new digital experiences to their customers, irrespective of the service channel. With us, they can concentrate on their innovation roadmap, while delivering intuitive, low-friction digital experiences to their customers.