Is the Digital Transformation in Banks Moving Too Slowly?

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As a consumer I have increasingly high expectations from my bank. Digital is changing the way we use banking services. But are banks taking full advantage of opportunities? Are they even keeping up? It’s easy to see how technology could enhance personal banking: Charlotte uses mobile banking.  She is in a store and she needs […]

As a consumer I have increasingly high expectations from my bank. Digital is changing the way we use banking services. But are banks taking full advantage of opportunities? Are they even keeping up?

It’s easy to see how technology could enhance personal banking:

Charlotte uses mobile banking.  She is in a store and she needs a higher credit limit on her credit card in order to make the purchase she wants. She logs into her mobile banking application through biometric facial recognition. She then requests a temporary increase of the credit limit on her card. This request is immediately screened by the anti-fraud system and the request is quickly verified through real time validation of business rules and predictive analytics on Charlotte’s customer data. Once validated, she receives an immediate approval of increased limit in her mobile banking account. She uses mobile payment to make the purchase she wanted. This all happens in a moment. There’s no waiting, no calls to her bank, no hassle.

Should banks be doing more?

How close is your bank to providing you with an experience like this? Are banks embracing digital fast enough to enable this type of experience for their customers in the near future? And, perhaps more importantly, are they increasing security measures in parallel with this flexibility and convenience? I would argue, no, at least not in many cases. And according to the findings from the 2015 US Online Banking Functionality Benchmark report, Forrester Research agrees. In their corresponding report on the channels representing what are currently the biggest growth areas – mobile and tablet banking apps, they go further to point out shortfalls such as:

·         The lack of an option to add an unregistered payee and a lack of an app-wide search

·         Limited ability to set up, receive and manage alerts

·         Limited ability to view, store and upload important documents

·         The lack of self-service features from within apps, such as fraud reporting and new card ordering.

Are Convenience and security mutually exclusive qualities?

In the digital age, the implications of financial crime against banks and capital markets institutions are accelerating rapidly. While the complexity of fraud is increasing, banks continuously face the challenge of balancing customer experience with added security. Customers, naturally, seek faster and easier processing of transactions. But they no longer believe that there should be a trade-off between security and convenience when it comes to accessing personal information. They now expect and demand both.

A hybrid approach to stay ahead of fraud

The answer to achieving both objectives, security and convenience, uses an integrated fraud management solution, based on a hybrid approach to analytics that utilizes business rules, anomaly detection, predictive analytics, text mining, and social network analysis.

This hybrid approach is more effective in revealing hidden relationships and suspicious associations among customers, accounts or other entities.

The solution:

·         Offers on-demand scoring with real-time detection for transaction fraud including cards, mobile, and online banking

·         Integrates disparate data sources both external and internal to enhance information credibility and implement omni-channel fraud rules providing visibility to a bank’s overall exposure across all channels

·         Enables next generation authentication methods like device identification, biometrics, and automated transaction scoring to make sure transactions are both simple and secure

·         Incorporates a hybrid approach to analytics and machine learning in order to continuously update profiles with upcoming data

·         Enables workflow trigger based on business rules and sends suspicious transaction to a case manager

·         Empowers customers to set limits as per usages or country-based or regional-based limits

Meeting expectations

Digital innovation enables every customer interaction and transaction with banks to be highly secure, without any trade-off with customer experience. Embracing digital will enable banks to achieve highly efficient fraud detection while greatly reducing overall alerts, false positives, and the time required for overall validation and approval process.

Today’s consumers expect:

·         To manage every aspect of their banking experience from anywhere, at anytime, and on any device

·         To have intuitive tools that provide service through the right channel for them

·         Fraud to be detected through intelligent use of big data, and dealt with before they notice it themselves

·         Information and documents to be available at their fingertips and to be easily searchable and filterable

·         Tools to help predict future transactions and to help with budgeting

·         Linked, personalized offers and services, such an insurance and savings products, which are pre-tailored to the individual and are ready-to-go.

Banks can only offer such flexibility and convenience and the accompanying increased intelligence and security by fulfilling the potential of what digital can offer.

Within today’s revolution of consumer demand, can banks lead their own revolution in their approach to doing business, while at the same time harnessing the potential of digital?

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