We live in an age when private customer data is constantly under attack from hackers. Cyber-threats have taken a front seat in the line-up of primary risks facing banks and financial institutions.
The fact that cyber-attacks are becoming more prevalent isn't the only issue; they're also becoming more complex and therefore harder to address. And although the convenient interconnectivity of the Internet of Things (IoT) creates many advantages for financial institutions, there is also an increased risk to dangerous threats.
The impact of cyber heists
According to Cybersecurity Ventures, the amount of money taken in cyber heists, both in banking and elsewhere, was estimated at $3 trillion overall for 2015, and this substantial amount is expected to double by 2021.
In today’s environment, banks, credit unions, and financial organisations of all types are primary targets for hackers. But it’s not just the monetary loss that these businesses need to be concerned about — there is also a threat to the brand, customer trust, and employee safety.
Banking surveys
Banking choices are influenced by how secure consumers feel when conducting transactions, either in their local branch, at an ATM or online. In one survey, a vast majority of consumers (98%) felt most secure when conducting transactions at their local banking branch, compared with 92% when conducting transactions online and 85% using a mobile phone app.
Further, 90% of consumers said they feel safer when they can see video surveillance cameras in their bank or credit union and would choose a financial institution with surveillance over one without, all other things being equal.
Here are some other key findings from the survey:
- Half of consumers have walked away from an ATM without conducting their intended transaction because someone was loitering in the vestibule
- 60% of consumers noticed a fraudulent transaction before their financial institution, leaving plenty of opportunity for banks and credit unions to be more proactive when it comes to identifying and notifying customers about potential fraud
“Banks and credit unions recognise that today’s consumers want a mix of in-person and online banking service options and have very high expectations when it comes to security and customer service,” said Peter Strom, President and CEO, March Networks, which provides security systems for banks.
To increase security, biometric solutions are replacing PINs at physical ATMs
To increase security, biometric solutions are replacing PINs at physical ATMs and providing a more fool-proof form of identification for banking security.
Ways to increase banking security
Popular use cases include a) PIN replacement at physical ATMs; b) proof-of-presence (such as pension benefit distribution) that requires liveness detection; c) more easily authenticating multiple transactions during a single ATM session; d) incorporating biometric information directly into a smart device; and e) the ability to leverage investments in biometric enrolment databases across multiple applications.
An example of the latter is when fingerprint authentication on mobile devices used for payments and secure mobile banking is also used in conjunction with enrolled information for authentication at an ATM. The availability of interoperable authentication devices would permit cross-bank usage and pave the way for many new applications in the future.
By enrolling a citizen’s fingerprints and then creating an ecosystem in which these transactions are strongly tied to that individual’s biometrics, the potential for fraud and identity theft approaches zero, and the process is simple and convenient for users.