IBS Journal March 2018


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to allow for optimum uptake by a diverse user base. “By making authentication possible by a range of security techniques, such as PINs, fingerprints, or selfies, customers can choose what works for them and what they are most comfortable with,” he says.


Step up to the plate


Even if secure entry is enabled for the customer, it’s also an institution’s responsibility to ensure that its apps are inherently safe from hackers, malware and other cyberattacks. A 2017 IBM study indicated that 58% of security experts at financial institutions ranked mobile concerns as a risk


features, but for the user experience to be simple and for the security to be water-tight.


“Banks and financial service providers have invested a lot of money and time in their digital transformation, as have all their rivals,” says Hendrickse. “The good news is that investment in digital transformation will help retain and attract new customers. The bad news is that customers will find it increasingly easy to switch banking providers as onboarding times decrease. So, while security has always been important, getting it wrong now will have consequences beyond bad press and potential fines.”


To retain customers, says Hendrickse, banks “need to be transparent” about how they keep data safe and protect their customers. “To complement this, they also need to provide their own education on phishing and malware in order to protect those customers that are not quite security-savvy,” he says. If they are to use mobile banking, customers not only need to be safe, they need to feel safe.


A bank’s customer base cannot be wholly pinned down. Users will always be of different ages, technological abilities and opinions on security. “It’s important to remember that the first ATM was installed in the UK more than 50 years ago, meaning that consumers have been engaging with banking technology for a long time,” says Hendrickse. Authentication should be made available via a variety of techniques,


service providers have invested a lot of money and time in their digital transformation, as have all their rivals


“ Banks and financial


indicator inhibiting their organisation’s full deployment of a mobile security strategy.


Similarly, research performed by the University of Birmingham in the UK discovered that although banks had been meticulous in building security into their apps, one particular technology used – so-called “certificate pinning” – meant that standard tests failed to notice a serious weakness that could let attackers take control of a victim’s online banking and mobile banking accounts. The problems mount when you consider that a user could be connected to unsecure WiFi hotspots or surfing suspect websites on the internet and downloading malware payloads – it’s something banks cannot legislate for, yet must be prepared to defend against.


Tests by Accenture and NowSecure, performed in April 2017, found that of 465 apps tested, 9% had small security issues, 10% had medium issues and 2% large issues. In total, three-quarters of the apps tested (on Android phones) passed without incident. The researchers concluded that banks have become sufficiently proactive in tackling well-known critical security issues such as Heartbleed, MITM and others.


Although you’d be hard-pressed to find a bank that doesn’t offer a mobile app in 2018, a vast majority of them still require a paper-based application system to gain a bank account. Hendrickse cites research from analyst firm PAID Strategies, which revealed that the majority of banks, especially traditional banks, still require consumers to go through manual processes such as visiting a branch rather than using digital identity technology to onboard applicants. According to the report, only two of nine banks surveyed allowed for 100% digital on-boarding, with identity verification remaining a manual process in most cases.


As Hendrickse says: “Until banks offer a fully-digital mobile banking experience, using digital identity services and biometrics, they can’t claim to be truly offering what the customer needs.”


www.ibsintelligence.com


martin-dm / iStock


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