Snippet: I sometimes think that here, in the IT security sector, we’re having the wrong conversation about authentication. As we debate the respective merits of the various solutions, we’re in danger of forgetting the most important member of the value chain: the customer.

I sometimes think that here, in the IT security sector, we’re having the wrong conversation about authentication. As we debate the respective merits of the various solutions, we’re in danger of forgetting the most important member of the value chain: the customer.

Before joining Entersekt, I spent five years at PayPal – a company known for its great customer experience. When debating new partnerships or features, our discussions would typically start with the question: Why would the customer do this? I believe that this is a worthwhile point of departure for any business decision.

Selecting an authentication solution is no different. The questions to ask should revolve around the customer, such as “What is the customer’s need, and how can we best meet that?” and “What does a customer-focused, secure authentication solution look like?” The answers to the following three questions will go a long way in helping you get it right.

1. Will it be used?

For an authentication mechanism to be used, it needs to be understood – will the customers you want to attract be comfortable using this security feature? Banking apps have continued to rise in popularity and are now one of the most popular self-service channels in banking. So for this type of customer, you will need an effortless way to for them to bank securely using their mobile.

2. Is it relevant?

If you’re serving digital natives, don’t ask them to do anything burdensome like enter an OTP. Customers should be able to simply tap “accept” or “reject” on their mobile device to confirm or deny a transaction. And, if they are comfortable using biometrics, that could also be a part of your offering. 

For more on what banks can do to position mobile-based biometrics for ease of use and security, download our white paper Biometrics and strong authentication. 

You need to stay relevant, enabling your customers to transact when and where they want. It’s not acceptable for your authentication system to decline a legitimate transaction just because the customer uses their card in an unexpected way, raising a risk trigger. After such an experience, it may be the last time that consumer uses your card or service. According to behavioral marketing agency SaleCycle, almost 75% of all online shopping carts are abandoned globally. It’s one of the biggest concerns for e-commerce merchants today. 

To reduce false declines, banks need more information to enable better risk decision-making. Read: What’s behind the brisk growth of risk-based authentication?

With the introduction of PSD2, it’s now even easier for consumers to change financial institutions, so how you handle these false positives (declines) will significantly effect customer loyalty and hence customer retention. By creating a smoother, more predictable process, financial institutions can lower their transaction abandonment rates.

3. Does it build trust?

The most effective mobile banking solutions are found at the intersection of customer convenience and security. Preventing malware and man-in-the-middle attacks is a must, but so is ensuring that the customer has some control over their transactions.

The best way to achieve visible security – when it matters – is to actively involve your customers in authentication, which requires a real-time response by the user to a step-up push notification sent to their mobile phone. This type of authentication means that users are engaged and feel in control during transactions, which gives them a sense of empowerment. And this empowerment builds trust, leading to more transactions.

This post has been updated from its original version published on 28 March 2018.

PYMNTS.com, in collaboration with Entersekt, conducted a study to understand American consumers’ preferences for authentication controls when it comes to mobile banking. Download the Consumer-Centric Authentication Study: Transforming the consumer’s digital banking experience for more insights. 

 

 

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Jonathan Knoll

COUNTRY MANAGER CENTRAL EUROPE

Jonathan brings us over 25 years’ experience in business development, strategy, marketing, and sales in the United States and Europe. Most recently, he served as director of financial services strategic partnerships at PayPal, building on his already extensive knowledge of the digital payments and financial services industries.

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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.