Page 37 - Cyber Warnings

Mobility and Big Data

The Next Revolution

By Robert Capps, vice president of business development, NuData Security

Banks have understandably been cautious about implementing new security measures. Unlike
the intermittent, and sometimes temporary nature of ecommerce-customer relationships, the
relationship between a bank and its customer is a real commitment and requires inviolate trust
between both parties. The growth of mobile account access has exploded in the past few years,
with customers demanding fast and innovative mobile experiences that are still secure. To
preserve the security of a consumer interaction, and meet customer demand for responsive
mobile experiences, financial institutions are looking to passive biometrics and behavioral
analytics to satisfy both needs.

What’s pushing the need for change? Consumer preference. Mobile logins are outpacing
desktop logins at financial websites all across the globe. Mobile banking customers are more
engaged, logging on an average of 14-15 times per month versus 4-5 times for traditional online
banking customers using a desktop computer. Focusing on customer engagement in the mobile
space can further cement brand loyalty, making your mobile app an indispensable resource
your customers rely on and use every day. Failing to deliver experiences consumers demand
means loosing customers to more agile competitors, as well as making new customer
acquisition extremely difficult.

Now, providing easy and convenient online access comes with a price. As we deploy easier to
use and more friendly online services, they become more attractive to online criminals, resulting
in higher risk transactions, and less data to adjudicate between good users and bad.
Compounding this risk is the fact that banking customers have a very low tolerance for incidents
of fraud but how they found out about it also has a huge impact.

In a recent study on consumer behavior, if banks alerted customers to fraud, only 2.5 percent of
customers would leave that bank; but if customers discovered fraud on their own, there was a
four-fold increase in customer churn observed, with 1 in 5 customers defecting to another
institution. Unlike a retailer that has a breach, if a customer’s accounts at a bank are
compromised they will not likely be won back over time. Banks spend years developing that
deep well of trust, so why risk it? Breaking that trust comes at too high a price.

Consumers aren’t the only group with a low threshold for risk, financial institutions are extremely
risk adverse and for good reason. Since 2010, incidents of card-related data breaches have
increased over 340 percent. Theft of login and password data has increased over 300 percent in
the same period. Consumers that have had their account information stolen are 10 times more
likely to be the victim of financial fraud, with a subset of those consumers experiencing true
identity theft – a crime with lifetime ramifications. Another real concern is malware, once
confined to desktop computers and now exploding in the mobile space.
37 Cyber Warnings E-Magazine – April 2016 Edition
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