In an age where the majority of processes are becoming digital, the need to have good user experience is becoming ever more vital. Nowhere is such a process more key that in the world of finance.
A recent post by RegTech firm Electronic IDentification discussed in depth the necessity of a good user experience at one of the most sensitive steps of the payment process – bank authentication.
A good user experience with a bank can go a long way. As eID noted, ‘a good experience influences how the bank is valued and, for those institutions, it increases the chances not only of keeping customers, but also of them recommending their services to others’. This chiefly means that the process needs to be developed with the customer in mind – with a firm balance between accessibility and security.
The bank authentication process is the procedure for the user to access the services offered by the bank. As a process, this is more important in the digital world due to the risks associated around financial crime and the ability for fraudulent activities to be more common. It also takes place in face-to-face interaction.
Authentication comprises of two steps. At identification, the user tells the system who they are. Then at verification, the user proves who they claim to be.
According to eID, the growth of online transactions – driven by the need to reduce physical contact during the pandemic – has led to a ‘reinforcement of authentication systems in banks’ and the diversification of these to cover all kinds of needs, from customer onboarding to everyday transactions.
The simplest form of authentication is the username and password combination. However, the EU’s PSD2 will require banks to use more secure authentication mechanisms to protect the privacy of customer data – known as strong customer authentication, a system that was recently introduced in the UK.
For the PSD2, strong authentication is based on using two or more verification elements among a list of three factors. These are something known only by the user (a password), something owned by the user (such as a credit card or mobile phone) and something that is the user (such as a biometric pattern like a fingerprint).
eID said, “A great customer experience depends on many factors. On one hand, institutions must provide simple, fast, and seamless processes that do not create discomfort for the customer. The development of bank authentication and identity verification systems must consider speed and convenience for the user. However, customer experience has other added factors: users demand that their security is guaranteed, and their data protected. Banks must therefore build trust in their technological choices and in their good practices in accessing services.”
eID underlined three key benefits of bank authentication for the customer are privacy of highly sensitive banking information is guaranteed, risk reduction of fraud and identity theft crimes and trust in the banking institution.
Read the full post here.
