10 customer authentication lessons we learned in 2013

Posted on: December 27th, 2013 by Art Barger

Each year, financial institutions are presented with new challenges for improving security and delivering a better banking experience. This year was no different.

New challenges around improving customer services and protecting consumers against emerging threats seemed to stem from how we authenticate customers on a day-to-day basis. Looking back at some of the top stories of 2013, I thought I’d run through some of the lessons we learned along the way.

1. Banks not meeting customer demand: Earlier this year, Cisco found that a lack of understanding customers has resulted in financial institutions not fulfilling consumers’ needs around customer service. This was validated when 69 percent of U.S. customers said they would give their bank more personal information if it resulted in better overall service.

2. Customers are still using the phone: An IMShopping study confirmed that before people purchase online, 77 percent of online shoppers still want to speak to a real person over the phone. An American Express survey also found that 76 percent of consumers pick up the telephone to resolve a serious issue.

3. Poor customer service equals lost revenue: Accenture reported that 51 percent of U.S. consumers take their business elsewhere after they’ve had a poor experience. Because the correlation between customer service and lost business has never been stronger, poor service costs U.S. companies an estimated $1.3 trillion in lost revenues each year.

4. Growing sales channels creating more authentication challenges: As financial institutions offer customers more tools to bank remotely, a growing challenge is to provide efficient authentication methods that identify customers and resolve their issues faster across all channels.

5. The customer’s needs should come first: We’re all doing what we can to authenticate customers and ensure a seamless experience. Unfortunately, the methods we use to achieve this are very time-consuming and often interrupt the process of simply addressing the customer’s needs first.

6. Banks looking to improve authentication processes: With the bad guys blowing past knowledge-based authentication (KBA) defenses, we’ve learned that financial institutions want to improve authentication inefficiencies to create a better customer experience and meet growing federal regulations.

7. Call Centers hit by Telephony Denial-of-Service attacks: A rash of TDoS attacks led to the FBI warning call centers about threats that interrupt or stop inbound or outbound calls. These attacks result in lost time, money and ultimately brand damage.

8. Customer service is a million dollar business asset: In a report released in 2013, Forrester Research found that the overall monetary impact of how a company treats its customers falls in the hundreds of millions of dollars range. This makes customer service one of the most valuable assets for any company.

9. Trust plays a key role in customer loyalty: Consumers want something they can count on. This is especially true when it comes to banking. Because consumers have the power to switch who they bank with at any time, earning and maintaining trust is a huge competitive advantage for any financial institution or business today.

10. Banks need to change with the times: To keep up with emerging technology and ever-changing fraud schemes, banks need to deploy new methods to identify good customers and detect threats. Relying on traditional KBA methods provides a false sense of security in today’s business climate.

Understanding the challenges the financial services industry is up against is one way we can develop and deploy solutions that help resolve issues is critical to a company’s growth and overall success. With authentication playing a key role in how we identify customers and fight fraud over the telephone channel, the TRUSTID® Physical Caller Authentication solution helps banks build a solid foundation for enhancing the overall customer experience moving forward.

As we move into 2014, we appreciate you visiting the TRUSTID blog. We look forward to discussing these and other important issues facing the authentication industry, and learn what we can do to better protect our customers and banking environments in the years to come.