How do you tell if a legitimate customer or a fraudster is signing into your online banking platform? How do you know if the authentication measures your organization is using are effective? How important is it to your organization to provide a seamless customer experience while maintaining adequate security controls?

The Problem With Customer Security

These are all important questions to consider when trying to create a balance between cybersecurity and a positive customer experience. In ISMG’s “Preserving the Customer Experience Survey,” half of the respondents didn’t know or were only somewhat confident in their company’s ability to authenticate legitimate customers online. Additionally, about half also believed that some of their security controls are perceived as inconvenient. However, 99 percent think that preserving the online customer experience is going to be a high priority in 2017.

The one thing that cybercrime experts do know is that cybercriminals and fraudsters are very adaptable. They will leverage, to their advantage, the services and offerings that financial institutions deploy to satisfy customer convenience and experience. They also use new technologies to further their schemes and circumvent security measures, such as using 3-D printers to create cutting-edge skimmers. When it comes to online banking the same is true: Cybercriminals will find ways to get around today’s security controls. In fact, they already have!

Today’s Security Controls

According to the survey, most organizations meet the baseline controls set by the FFIEC’s 2011 guidance. While those baseline controls are important to have in place, they are now 6 years old. For example, one-time passwords delivered via SMS are a popular security measure, often used today in two-factor authentication. While this is an effective control, it can be defeated by malware and fraudsters employing a man-in-the-middle (MitM) attack.

According to Shaked Vax of IBM Security, “I would not be surprised if in the next year or two, these SMS messages will no longer be considered secure — much like passwords are today.”

The Balancing Act

Almost all respondents to ISMG’s survey indicated that creating a positive online customer experience was very important. At the same time, approximately half said they felt that their security controls were somewhat inconvenient to customers. About one-third of the respondents said that customers have left their organizations because cybersecurity controls degraded their experience.

Fraud prevention and security controls are not unlike a seesaw, with security controls on one end and the customer experience on the other. As more security controls are put in place, weighing down the security end of the seesaw, customer experience is left stuck in the air.

More and more organizations are adopting behavioral biometric solutions that offer customers a transparent and seamless experience. These solutions allow your organization to adjust the fulcrum on the seesaw, giving way for both enhanced security and a good customer experience. These solutions analyze the customer’s patterns of behavior while interacting with your website, including mouse movements and clicks in context. The solutions operate in the background and are therefore transparent to the customer and much harder for fraudsters to compromise.

One Size Does Not Fit All

The key is identifying the right type of control to maximize fraud prevention for the individual customer. Not all customers are the same. Millennials have different expectations of their online banking experience than do their baby boomer parents. Similarly, not all online banking interactions carry the same risk. So why treat customers and the way they engage your organization online the same way?

The companies that can offer experiences tailored to the customer, and their individual needs and expectations, will lead the way in the coming years. Behavioral biometric solutions using cognitive technology to effectively assess identities throughout the online journey eliminates the need to perform overbearing authentication for certain transactions.

Conclusion

The ISMG survey provides good insight as to how banks view the importance of preserving the customer experience online. However, it clearly illustrated that many banks believe they are not hitting the mark, with about half indicating that they believe their security controls are inconvenient. But one thing is crystal clear: Almost all banks put a very high priority on improving the customer’s online experience.

Download the complete ISMG Report on Preserving the customer experience

More from Fraud Protection

PixPirate: The Brazilian financial malware you can’t see

10 min read - Malicious software always aims to stay hidden, making itself invisible so the victims can’t detect it. The constantly mutating PixPirate malware has taken that strategy to a new extreme. PixPirate is a sophisticated financial remote access trojan (RAT) malware that heavily utilizes anti-research techniques. This malware’s infection vector is based on two malicious apps: a downloader and a droppee. Operating together, these two apps communicate with each other to execute the fraud. So far, IBM Trusteer researchers have observed this…

New Fakext malware targets Latin American banks

6 min read - This article was made possible thanks to contributions from Itzhak Chimino, Michael Gal and Liran Tiebloom. Browser extensions have become integral to our online experience. From productivity tools to entertainment add-ons, these small software modules offer customized features to suit individual preferences. Unfortunately, extensions can prove useful to malicious actors as well. Capitalizing on the favorable characteristics of an add-on, an attacker can leverage attributes like persistence, seamless installation, elevated privileges and unencrypted data exposure to distribute and operate banking…

From federation to fabric: IAM’s evolution

15 min read - In the modern day, we’ve come to expect that our various applications can share our identity information with one another. Most of our core systems federate seamlessly and bi-directionally. This means that you can quite easily register and log in to a given service with the user account from another service or even invert that process (technically possible, not always advisable). But what is the next step in our evolution towards greater interoperability between our applications, services and systems?Identity and…

Topic updates

Get email updates and stay ahead of the latest threats to the security landscape, thought leadership and research.
Subscribe today