Balancing security and customer experience is key as new financial services businesses accelerate the online land-grab.
This past Sunday, 60 Minutes shined its investigative spotlight on the fast-emerging fintech industry, which has seen meteoric growth in a relatively short amount of time.
As the unofficial poster child of disruptive technologies that are bucking the establishment, fintech is ushering in a host of opportunities for consumers to get what they need faster, for businesses to offer better services to their customers…
…and for fraudsters to commit crime.
As Stripe co-founder, Patrick Collison, points out in the 60 Minutes segment, “People have been trying to steal money for as long as money has existed and the best we can, as a society, hope to do is to design security in the most thoughtful and robust way possible.”
Given that the fintech revolution is being fueled by thousands of companies trying to make banking faster, cheaper and more mobile, security absolutely has to start with the device being used to access the account.
According to iovation data, roughly 25% of the transactions monitored for our subscribers in the financial services industry originated from a mobile device in July of 2013. Three years later, that mobile traffic now represents nearly 42% of all transactions.
Even as more and more consumers are accessing established financial services using a mobile device, that number will surely grow as fintech companies continue to change the face of financial services.
Device Intelligence and the Customer Journey
While there’s no doubt that security will continue to be a top concern as financial services offerings evolve and mature, fintech companies must not lose sight of the all-important customer experience. If heavier security comes at the expense of a smooth online experience, it’s a safe bet that consumers will look elsewhere.
This is where device intelligence can play a critically important role.
In a typical online journey for a financial services consumer (pictured below), there are multiple touch points that could pose a risk – from creating an account to withdrawing funds – where device intelligence can help to prevent fraud without adding friction to the customer experience.
Using Device Insight to Balance Fraud Prevention and Customer Experience
Recent iovation research reveals that card-not-present fraud will cost U.S. retailers and financial institutions $7.2 billion by the end of 2020. And there are certainly many other fraud types that are part of the equation for financial services businesses, such as new account fraud, bust out fraud, and synthetic identify fraud, just to name a few.
Which leads us to this key takeaway:
To protect your business and your bottom line, you need to implement authentication and online fraud prevention measures that strengthen security and address risks, without impeding the experience for your online customers.
Iovation’s Max Anhoury, VP of Global Partnerships, covered this topic in a recent webinar – Balancing Security and Customer Experience – which cuts right to the biggest security challenge that many fintech businesses are facing today.
It’s an eye-opening discussion that online businesses in all industries – not just fintech – should listen to. View the recorded webinar here.