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Omnichannel banking creates newer fraud avenues for accessing financial services


Today’s banking industry is faced with two intertwined important challenges—omnichannel banking and providing a secure, yet frictionless experience to customers. In a bid to stand on the top of the heap, banks and credit unions are offering as many channels to consumers as possible for accessing banking information and financial services at any time, from any location, via any device. However, as banks’ transaction processes evolve along with customers, malicious actors look for holes they can exploit.

Omnichannel banking for greater customer loyalty and retention

Omnichannel banking offers customers seamless access to financial services across channels and allows for more consistent interactions with the bank, whether at a branch or through a mobile device, desktop, or customer-service telephone line.

Financial institutions are adopting cross-channel banking for several reasons. It’s a new way to make more income by increasing profitability and growth. One report suggests that companies with strong omnichannel presence see a 9.5% increase in revenue year-on-year as compared to other companies.

Omnichannel banking empowers customers to do what they want, when they want. 

Omnichannel banking appeals to customers as well. They’re looking for a consistent experience that empowers them to do what they want, when they want. A report on The State of Consumer Banking Experiences suggests 75% of consumers say that easily switching between channels when banking is important or extremely important, as is aggregated account access. This is just an extrapolation of how Americans use their devices; nearly all—98% of Americans—switch between them on the same day. And smartphone adoption is widespread. A report from PEW Research highlights that nearly two-thirds of Americans own one; in this group, 57% have used their phones to do online banking and 46% manage finances between devices.

In an ideal omnichannel banking environment, a customer could, for example, inquire about a home mortgage through email or the call center, and then apply for targeted financing or home equity over a mobile phone app.

Omni channels 1 (1)However, in one approach that seems to have increased recently, fraudsters target victim’s bank contact centers, and, through various means, coerce customer service representatives to share basic account details. Further, this information is used to access funds in other channels.  

Fraudsters attempt to get past financial institutions’ various cross-channel authentication protocols that the financial institutions use across channels.

Meanwhile, newly introduced protection techniques (such as two-factor authentication, transaction authorization numbers (TANs), or timer-based passwords) are already becoming ineffective in reducing fraud activity. On the contrary, cybercriminals are exploiting visible gaps in these authentication techniques and channels through strategies such as man-in-the-middle, phishing, key logging, or password guessing attacks. In this omnichannel world, financial organizations can thus face more attacks with less time to assess risk as faster payments shrink the available fraud detection window.

Tackling fraud: An important omnichannel issue

Although educating customers and bank employees about fraud dangers is important, omnichannel banking crucially needs a modern fraud solution to address these new dynamics. Simility’s advanced solution looks across payment types and channels to evaluate behavior—while reducing the total cost of investigation and potential fraud loss.

Simility provides banks with a multilayered solution to create a single view of a customer’s interaction across multiple channels, providing a frictionless yet secure customer experience. The solution involves a combination of data collected from the customer; this includes name, email address, and user-specific IP address, and may also gather useful information about the customer’s device that can easily be captured by the bank and associated with the customer account. omni channels 2 (2)Through the power of combined transaction monitoring, Simility can easily diagnose if, for example, the customer has been lured through social engineering into giving out their password to unauthorized users. This monitoring uses advanced analytics to capture transaction data, such as date and time the transaction is made, the payee name and account, and the method used to initiate the transaction. This information allows the bank to detect and prevent potential fraud. Also, Simility’s advanced device-fingerprinting technology assigns a distinctive identification code to each device that accesses an online banking platform. With this information, banks can identify and block devices linked to previous instances of fraud, thus preventing a reoccurrence.

Balancing customer experience in the secure omnichannel world may require large investments both in terms of expenses and efforts, but with Simility as a trusted partner, banks can save a lot of money and time while ensuring business continuity and protection. With Simility’s advanced fraud detection capabilities, banks can detect and stop fraud in-transaction in milliseconds, instead of just fixing it after the fact.

To learn more about how Simility can help detect fraud in omnichannel environment, schedule a demo or download our Banking Solution Guide.

Payal Baid

Payal Baid

Payal Baid is a social media evangelist and marketing professional. She writes blogs, apart from driving other marketing efforts.
Payal Baid

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