Even more than winning on mobile, banks would like to minimize security threats. Banks lost $16.8 billion to fraudsters last year, according to a Javelin report, and the number of U.S. customers victimized by such attacks increased to 16.7 million, up from 15.4 million in 2016.
Protecting customers is paramount for executives. A global study among 400 bank executives conducted in March by the Economist on behalf of Temenos, a banking software company, found that 71% of execs are focusing their digital investments on cybersecurity.
“Everybody is spending money trying to catch fraud after the fact when you could have prevented it on the front end,” said Bryan Lewis CEO of Intellicheck, a fintech provider that works with banks to prevent identity fraud. This can be achieved by means such as updating security to require the use of a government-issued ID as the first means of identifying users, to barcode authentication for big purchases.
Lewis notes that banks admitting that a breach or security threat could happen to them and that having a security strategy in place is a good starting point to prevent fraud.
“We have a lot of large clients in the space, everybody knows fraud is out there, but no one wants to say that it happens to them. We help banks cut loses from identity fraud and synthetic identity fraud,” said Lewis.
On regaining lost consumer trust, Lewis believes banks have to take the onus of preventing fraud.
“Come out and admit it [fraud] and talk about what you’re doing about it,” said Lewis. “I think people want to hear that they are taking proactive steps to take control.”
In addition to securing their operations, banks would like to deliver better experiences to customers. More than half of executives (54%) are focusing their digital investment on individual delivery capabilities for mobile and internet-enabled devices. This means computing at the speed consumers have come to expect and shifting technology budgets to reflect where their customers are before they lose them to competitors.
In the coming years, 53% of bank execs see their biggest competition as newcomers to the payments space including PayPal, Apple Pay, Alipay, and Square, among others.
Read more about the study here.