Latin America. Digital banking has become a fundamental tool in times of pandemic and quarantine; users do not need to go to physical branches to make their transactions or inquiries, and online services are available almost 24/7.
Such convenience was represented in a clear growth of digital users globally, which represents new challenges for banks. In the United States, for example, a study by J.D. Power revealed that 52% of retail bank customers were classified as 'dependent on physical branches' before the pandemic, so in the coming months a transaction to digital technology without compromising the user experience will be key.
Consequently, banking institutions are increasingly creating services in digital channels. However, as people accept these benefits, so do the threats of fraud.
In Latin America, cyberattacks were already frequent before the pandemic. Last year Kaspersky published a fearful figure: the company recorded between July 2018 and July 2019 an average of 45 attempted cyberattacks per second in the region.
Taking advantage of COVID-19 as a catalyst, several banking Trojans have used the pandemic as 'bait' to steal people's data through emails inviting them to learn about the coronavirus and how to prevent it.
This phishing method is categorized as 'social engineering' and is quite common in the region. One example is the Casbaneiro banking Trojan, which is affecting countries such as Mexico and Brazil.
With this panorama, it is clear that the challenge for banking institutions is not only to produce applications for mobile banking, but to guarantee security at all levels in these platforms.
Digital authentication as a shield against cyberattacks
The pandemic brought new challenges for digital banking; among them, improving the digital culture, both for employees and end users, and, above all, employing more robust technologies in terms of cybersecurity.
Overcoming them requires solutions that protect data and transactions, while providing a good consumer experience and maximum flexibility for banks.
This is where the importance of digital IDs is highlighted. In this increasingly connected world, these are the new currencies today. To protect them, the financial market needs to consider new security models that allow them to:
• Accurately assess risks in real time.
• Combat cybercrime through progressive technologies and data-driven authentication.
• Improve operational efficiency and detect attacks in a timely manner.
• Meet increasing regulatory requirements related to data privacy and identity protection.
The premise is clear: to avoid fraud it is necessary to know with certainty who is making the transaction. That's why one of the biggest barriers to preventing cybercrime is advanced multi-factor authentication.
Cloud-based authentication platforms are on the market that help financial institutions secure access to critical infrastructure and data. In addition, considering the rise of mobile devices, they can provide multidimensional authentication (networks, systems, applications, digital resources) with major mobile phones and tablets.
To add layers of security to systems, these platforms support banking software to perform secure multi-factor authentications or transaction signing for online banking customers. These types of packaged integrations reduce response times as well as research and development costs. In this way, the implementation of a security solution for digital banking becomes more agile and less complex.
Similarly, an authentication platform can be combined with advanced feature applications, enabling the verification of out-of-band and mobile transactions, while taking advantage of the push notification capabilities of mobile devices.
Finally, there are also risk management tools: risk profiling technologies that protect institutions against cyber criminals, also based on data analysis.
These types of solutions can, from data analysis, protect online banking from both traditional threats and modern attacks.
A world-proven technology
Digital authentication is helping to address the issues that mobile banking is facing today.
A retail bank in Egypt reduced fraud, operating costs and improved regulatory compliance with its customers thanks to a secure transaction solution integrated with its banking software and online products.
Similarly, a Swiss wealth management group uses an authentication platform to optimize flexibility, secure mobile transactions and secure corporate data, applications and systems.
There are also examples of many other banks, such as in the United Kingdom and Eastern Europe, where they are using this type of digital solutions to comply quickly, easily and securely with PSD2 (European regulation of electronic payments).
In conclusion, with fewer customers visiting branches, it will be important for banks and financial institutions in general to replace face-to-face service with personalized services through digital channels, as long as priority is given to data protection and security in general to ensure business continuity.
Author: Cris Melloni, Director of Banking Business Development at HID Global for the Americas.
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