It’s the one question that Matt Cole, CEO of Secure Enterprise Transactions at IDEMIA, told Karen Webster that his firm now increasingly hears from banks: How can financial institutions (FIs) cement trust with their customers in an automated fashion to enable digital-first experiences?
Advanced technologies can help, he said.
Digital-first, or digital-only, upstarts have been making competitive inroads against incumbents, noted Cole. And the great digital shift has ushered in what might be termed — for FIs, at least — the age of “great expectations.” The overarching theme: everything now.
When one channel of engagement fails to satisfy, consumers want to pivot to the next one, get what they need and move on. Digital efforts on the part of FIs, then, have to work that much harder as consumers eschew branch visits in favor of banking on their phones. The app, and the consumer experience, become paramount to cementing that coveted trust level, said Cole.
FIs need to mull how they can instantly recognize, and approve, legitimate “good” customers from, well, the others – and pave the way for a seamless interaction — always on (so to speak), and on-demand.
FIs can leverage strategies that embrace advances such as biometrics to leverage digital IDs and to fashion a holistic view of the consumer that meets the needs of the “always-on” relationship between the enterprise and the end user.
Digital IDs have gotten more scrutiny in the wake of the great digital shift, as customers engage with endpoints and stakeholders in a variety of new ways. That’s why Cole said that flexibility is a strategic necessity for banks, because they operate across physical and digital channels. Omnichannel ecosystems demand speed and security, whether a consumer is visiting an ATM to withdraw cash (but wants to have as contactless an experience as possible) or needs to turn off a card while traveling.
Pivoting Toward Modernity
In the age of always-on commerce, as banking goes ever-digital, trust is a two-way street. Financial institutions need to know that clients are who they say they are, right at the point of accounts being opened – while consumers need to know they’re being protected while encountering the least amount of friction.
Time is of the essence, of course. Consumers want what they want now – and FIs have to make risk management decisions on the fly, in near-real or real time. To meet those demands, banks have to grapple with legacy software and hardware accumulated over decades, where “rip-and-replace” mentalities must shift in favor of platforms and partnerships with third parties.
“There’s an underlying modernization program that the bank needs to put in place as part of its digital transformation journey, so that [they] can build the right platform for digital identity and to enable these digital experiences,” said Cole.
That trusted digital ID and consumer profile travels across the consumer lifecycle, starting with onboarding and account opening all the way to digital card issuance.
The Benefits Of Digital IDs
The best way to get there, said Cole, is through a multi-layered approach that leverages capabilities such as document and identity proofing and biometric verification, along with third-party data sources.
“Digital identity offers a great benefit, provided it’s seamless, and the banks and financial institutions can achieve the appropriate level of trust without adding any friction onto their onboarding process,” he explained.
According to Cole, profiles can be built for each individual customer that can match the individual (and the transaction or activity he or she is attempting) with the appropriate risk-control policy as determined by the FI – beyond simply checking the boxes of anti-money laundering (AML) and know your customer (KYC) policies.
Digital ID: The Foundation Of A Seamless Banking And Payment Experience
But the challenge that banks face is a bit more deeply ingrained than what might be seen with other service providers or verticals.
“There’s a tapestry of legacy and modern systems that sometimes make the architecture complex,” said Cole, noting that the sheer size of the banks – and the decades of legacy infrastructure systems in place – have made it harder for them to move ahead and to embrace the digital shift as fully as they might.
Open banking and data sharing can help bring banks further along in their modernization efforts, Cole noted. The FI that brings in the right data sources and ID solutions will allow users to intuitively activate their digital (and physical) cards, change PINs, check balances and make payments as they move through an omnichannel continuum of financial services, Cole explained.
Through the use of biometrics and digital IDs, and with a nod toward the fact that consumers may have a range of relationships with several FIs, Cole said that ubiquity is not all that far off, where the customer experience is uniform and friction-free, and where consistent IDs are embedded into different activity streams like payments and lending.
“We’ll get to a baseline of ubiquity relatively soon, because people are moving forward on their digital agendas faster than they have ever before,” he predicted. And as he told Webster, for FIs, “there will always be an opportunity for innovation, advantage and customer retention.”
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