Security Initiatives in Retail Banking (Strategy Focus)

Security is a fundamental requirement for banks as they fight a battle on all fronts against fraud, identity theft and account breaches.



Report Highlights
The password burden is becoming a very real issue for many customers, particularly those that tend to favour direct channels. Such customers tend to be online banking users who also typically be internet savvy and research and compare financial products online, and more likely to buy products from multiple providers thus compounding the problem. Whatever solution they opt for, banks must be aware that even strong authentication is not enough to prevent all fraud. Furthermore, banks will always need to have alternative authentication processes for the instances where customers are unable to use the standard method for whatever reason. Banks need to ensure their systems are fully protected against going offline without pre-warning, as customers now expect to be able to access their accounts 24 hours a day, 7 days a week.


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CATALYST 1
SUMMARY 1
METHODOLOGY 1
ANALYSIS 2
Banks must address the security challenges that culture and infrastructure create 2
Banks face unique authentication challenges in each country due to both cultural and infrastructure factors 2
Banks must be able to operate securely in accordance with the regulatory environment 2
Security issues facing banks are often dependent on the size of the institution 3
Banks must tackle the authentication challenge at the customer/channel interface 3
The password burden builds up quickly particularly for direct banking customers 3
Online payments can also add to the volume of passwords customers must contend with 4
The password burden is beginning to have an impact on the customer experience 5
A multi-channel authentication solution is becoming increasingly desirable 5
Additional security layers can be used as a differentiation strategy 6
Customer segmentation 6
Institutions must tighten control over identity management and internal security 7
Internal fraud risk 7
Staffing practices and access must be managed 7
Data and systems access must be tightly controlled and monitored 8
Banks need to move beyond authentication to proactive detection across all security types 9
It is not enough for banks to rely on strong authentication 9
Multiple security standards across bank operations must be leveled 9
The implications of data leaks are growing as customers take data confidentiality increasingly seriously 9
Unplanned channel downtime undermines the bank's offering 10
APPENDIX 11
Further reading 11
Ask the analyst 11

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Figure 1: Example of potential password burden on one customer 4
Figure 2: Banks must ensure they are able to interact with legitimate customers while blocking threats 7

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