Nothing has disrupted the trajectory of the financial industry in recent years as much as digital technology. In a 2013 survey, Accenture found that 80 percent of bank customers use online banking at least once a month with 37 percent expecting to use mobile banking more often. Physical branches are expensive to build and maintain but an important component of sales for financial institutions. There is a critical balance that banks and credit unions hope to achieve in the coming years between in-person and online customer services.

Fraud issues and regulatory pressures have made financial institutions cautious in offering full services across devices. At the same time digitally empowered customers are looking for comprehensive services at their fingertips using smartphones, tablets and desktops.

Ivan Schneider, a financial technology journalist reported that: Banks increasingly understand that they must meet the mobile customer’s need for a seamless experience while also implementing security measures that maintain competitive parity and meet or exceed regulatory requirements.

Each of these issues points to the importance of across-the-board fraud prevention for online and mobile banking services. Fraud mitigation has become a critical part of native app planning for the future especially as customers move from desktops to more mobile devices.

Some of the key fraud types that the financial industry fights are:

  • Account takeover
  • Synthetic identity
  • Identity theft

Fighting each of these types of fraud is critical whether transactions originate on a web server or mobile app. Since there is no one perfect way to fight fraud, financial institutions are looking at multi-layered approaches that include both device and identity-based intelligence. Fraud prevention managers understand that not only do they need an accurate system in place, but one that also cuts down on manual reviews for better efficiency.

The financial industry is highly competitive. A fraud mitigation service that can cut down on fraud with very little impact to customers—basically a frictionless experience—will be in high demand as digital banking continues to grow.

White Paper: How to Stop Online and Mobile Banking Fraud