Online Financial Services and retailers have had an incredible 2020, but so has digital growth and cyber fraud. The reality of the global COVID-19 pandemic has forced consumers online, providing little time for banks, Fintechs and retailers to prepare for the sudden swelling in volumes.
This sudden switch from the physical to the digital has brought with it huge growth in digital financial service adoption, driven by online banking and retail, and with this rapid rise has come much higher stakes and potential consequences for cybersecurity and overall trust. Fraudsters know exactly where to look to find quick and illicit gains, including through account takeovers of existing, legitimate services.
It’s a truth that cybercrime always follows the money, and also that no technology or service is 100% secure. Digital growth and cyber fraud follow the same pattern. It’s important in this context that providers of digital services move quickly to ensure that they are protecting themselves against these threats in the best ways possible.
The challenges of rapid growth
A major element of online digital growth is in money transfers and payments, with recent surveys suggesting that 75% of consumers use at least one service in this category. The COVID-19 disruptions have forced this activity increasingly online as many of us turn to online banking and money transfer sites to receive income or make payments.
Rapid adoption of these services may lead to the cutting of corners when it comes to security, re-use of passwords, consumer willingness to experiment with new or untested Fintech brands, or reliance on now-outdated traditional “safe online banking” advice that is not adequate in modern mobile usage scenarios where speed is king and everything is oriented around quick “yes/accept” tapping and swiping.
Fraud risk versus compromised user experience
The challenge for service providers is that the mobility and convenience factors behind their digital proposition are compromised when security and anti-fraud measures add too much friction.
There is a place for existing technologies such as SMS to provide elements of the identity verification product suite, but we believe that this can be optimised through the layering of additional mobile verification technologies – such as a parallel SIM swap check – to improve security and results, without impacting user experience.
Mobile data innovation can drive solutions
The mobile arena, whilst presenting new challenges in online security, is also unique in offering new and ingenious methods to counter the threats. Mobile ‘static’ data – that which the operator holds on our core identity, mobile number, name and address for example – and ‘dynamic’ data that offers real time insights into our usage and patterns of life – can finally help turn the tables on the cybercrime threat without creating new data privacy issues.
The best way for digital financial service providers to maintain security and protect against the new cybercrime and online fraud threats created by rapid adoption of services is to acknowledge the new threats and adopt a new and open approach when it comes to data usage and security in a mobile-driven future.
Adopting the right lessons now will put commerce, trust and the digital economy on an even more resilient and trusted foundation.
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