Hilary Stephenson, managing director of digital user experience (UX) agency, Sigma.
Recent changes in the financial sector, such as the upsurge in digital-only banks and the implementation of open banking, have greatly increased competition between financial services providers. In the wake of this sea-change, forward-thinking organisations have begun to realise that, for many customers, user experience (UX) is as much a differentiator as price or brand loyalty.
Until now, digital UX has largely been somewhat overlooked in the banking market, with established brands dominating solely through the power of their name. However, the prevalence of ‘disruptive’ service providers like Uber and AirBnB, has led to an increased demand for consumers to manage their finances digitally, highlighting to banks the importance of optimising their online and mobile offering. As a result of this we’ve seen a sharp rise in digitally-focused challenger brands, such as Monzo and Tide, disrupting the financial services sector.
The influx of these new players, which deliver products and experiences with the customer at front of mind, has cast new light on the benefits of the banking sector adopting sleek, user-centred, design principles.
The rise of user-centric banking
At its heart, UX design is about the improvement of products and services to enhance user satisfaction and deliver a better experience. Applying this to the banking sector, positive user experiences can be achieved by matching customer’s distinct financial and customer service needs with systems that are intuitive, effective, and easy to use.
Advances in technology, such as the smartphone, have driven a wave of digital transformation in the banking sector. But until now, UX hasn’t really been prioritised, meaning banks generally have been offering the same services – and the same frustrations.
Because of this inactivity, smaller, innovative banking providers have been able to steal a march on their more established competitors by designing their products and services with customer needs front of mind from the outset. Specifically, digitally-focused fintech brands, such as Atom and Monzo, have analysed the day-to-day banking issues customers face, and designed their services from the ground up to mitigate these issues.
Recent research from EY suggests that positive strides are being made in this area, with 85% of executives at traditional banks citing digital transformation as a key growth area this year. Despite this, more needs to be done if the high street brands are to keep pace with the more agile fintech start-ups.
How UX is transforming financial management
In terms of how user-centric banking translates into the services we use, the most interesting use-cases seen thus far focus on creating greater transparency between banks and customers in order to alleviate consumer anxiety and build trust.
Here is a selection of notable examples we’ve seen:
Enabling greater control over our finances – Excess expenditure is a perennial issue for banking customers who are looking to save, or even just maintain control over their financial lives. This is why mobile banking platforms, which go beyond the traditional monthly statement, are gaining popularity among customers who struggle with the age-old question of “how can I avoid spending too much?”.
Many forward-thinking fintech providers now offer money management functions with detailed spending breakdowns, which allow their customers to effectively budget and manage exactly where their money is going. In the future, we could see this go even further with more widespread adoption of financial safety nets such as automatic savings transfers, warnings against upcoming payments, and safe-to-spend limits.
Positive friction – This may initially seem an odd inclusion; after all, user friction is exactly what we as designers generally aim to avoid.
In certain cases, however, friction can be used as an invaluable design tool to improve the user experience. For example, late-night impulse spending can often be a source of regret and anxiety for customers, with many waking up the next morning wishing they could revoke their purchase. This is backed by research from the Money & Mental Health Policy Institute, which found that this impulse spending is particularly prevalent in sufferers of mental health impairments such as Bipolar Disorder.
An example of a forward-thinking provider designing against this is Monzo’s implementation of a late-night spending “safety net”, wherein users are provided with a summary of any purchases made after a certain time the previous day (say, 11pm), along with an option to review and cancel certain purchases before the funds leave the customer’s account.
Not only does this go a long way towards increasing trust between customers and their banks, but there is also the important ethical consideration of safeguarding vulnerable customers against unwanted spending and potentially falling into debt.
What direction might banking UX take in the future?
Greater flexibility for customers – open banking makes customer’s financial data far more freely available to banks, and other service providers, which transforms the traditional onboarding process. Because customers will need to provide far less of their data when switching banks, much of the onboarding process for these customers will be negated. Not only does this make it as simple as possible for customers to pick the best provider for their needs, it also makes the entire switching experience far quicker, easier, and less of a burden for the customer.
The increased flexibility offered by these user-centred banking providers does not stop here, and could also transform our experiences in other sectors. A great example of this is the utilities sector, where uncertain energy prices, increased competition and the recent cold snap has led to more of us than ever before switching suppliers in search of a better deal. Considering this, many have speculated that in future we could feasibly see customers able to switch providers from any sector – all from one app.
Greater accessibility – For the first time ever, more than half of the world’s population are online, and nearly two in three (63%) UK residents do their banking online (a 33% rise since 2007). This move to online means that it has never been more important for banks to embrace inclusive design, thus ensuring that nobody is discriminated against or unable to access vital money management services.
We’ve already touched upon the great work being done to cater for those living with mental impairments, but this is a field in which we think further strides could (and should) be made in the near future as more brands begin to design with the user at front of mind.
Another area in which banks could be more inclusive is in how they communicate with their customers. We live in a multichannel world, and customers will have their own unique preferences (whether this is driven by choice or by necessity) as to how they engage with businesses. Brands must therefore be equally accessible via multiple communication channels, whether this by more traditional methods such as phone, email, or even newer methods such as instant messaging apps or social media, if they are to effectively reach their customers in the digital age.
User-centred providers are set to thrive in the new banking landscape
The rise of user-centric design has already had a substantial effect on the banking sector. In the wake of open banking, switching providers will now be easier than ever before, creating a greater focus on engendering and retaining customer loyalty among banking providers.
While on the surface, this loyalty may now be more difficult to achieve, there is the opportunity for stronger customer relationships than ever for banking providers who are able to innovate and offer these user-centric solutions.
Regardless of current size, those who will thrive in the new banking landscape will be those who strive to innovate and create exceptional experiences for their customers.
Ultimately, this will forever reshape the relationship between banking provider and customer, moving away from a purely transactional relationship to one which is truly customer-centric. This means that the successful banking provider of the future must place the customer at the heart of the design process, working from the outset with the customer at front of mind.
Bank fraud prevention in a post-COVID-19 world
By Pierre-Antoine Dusoulier, Founder and CEO, iBanFirst
Fraud on the rise
According to recent research from a leading UK retail bank, there was a 66 per cent increase in reported scams in the first six months of 2020 compared with the last six months of 2019 – due to the COVID-19 pandemic.
Across the summer months, Action Fraud UK reported a total financial loss of £11,316,266 by 2,866 victims of coronavirus-related scams.
The rise in fraud rates is a warning that banks, building societies and other financial providers need to be as alert as ever in identifying fraud.
So, what do banks need to do to ensure their customers are protected from fraud in a post-COVID-19 world?
Educate your customers to safeguard against fraud
On the customer level, banks need to be informing their customers on the types of common fraud to ensure that they are protected for all eventualities.
Authorised push payment scams are one of the fastest growing types of fraud. According to the FT, £354 million pounds was stolen this way last year. It is where a company or individual is tricked into paying money into a criminal’s account. Emails come from a genuine email address but are then intercepted by a criminal, so it’s imperative that businesses have end-to-end email encryption, and the customer double-checks the account details with the supplier on the phone prior to making a payment.
At the same time, scammers can also exploit the company’s invoicing process, where criminals create a bogus invoice for a small amount and send it to a company’s accounting department. If the finance team does not identify this as fraudulent, it can result in the business losing a considerable amount of revenue over a long period of time.
Supplier fraud is also a widespread scam. This involves the fraudster taking on the appearance of a supplier that has changed their bank details. The fraudster will have collected information on the suppliers of the targeted company, in order to pose as an official supplier. This can be prevented by ensuring that the supplier is contacted to confirm the legitimacy of the communication. It’s important not to call or email the supplier using the details provided on the suspected fraudulent correspondence. Instead they must check the original details of the supplier and speak to them on their official telephone number or email on file.
Banking malware is the least commonly cited type of fraud but has a greater financial risk attached to it. Malware is sent by email redirecting the recipients of the message to a fake banking interface, as a way of transferring funds to offshore accounts.
Remodel processes post-COVID-19 to keep customer data safe
To fight cyber fraud and scams, banks must also play their part. In a world where entire workforces are working from home banks must remain vigilant with customer data. COVID-19 has created a change in working habits and banks need to carry out the right level of training for its employees to protect customer data. Virtual team meetings and remote data sharing poses a threat to exposing sensitive information to malicious actors, and banks need to put the necessary safeguards in place.
All virtual meetings should use the banks’ private company network, and file sharing should be carried out through secure, encrypted company drives. Meanwhile, banks need to provision for all employees to receive regular software updates that will keep customer data safe, and ensure that they are aligned with new and existing data processing regulations.
Monitoring suspicious payments
A vital element to fraud detection is through monitoring customer transactions in real time, and harnessing emerging technologies such as artificial intelligence and machine learning to spot the signs of a scam or fraud before it is too late.
One way that banks protect businesses from fraud is through keeping a log and examining regular transactional history. Any transactions which appear suspicious based on location, amount, the beneficiary, and the method will be alerted to the business customer, to mitigate the immediate and future financial risk to the business.
Know your transaction
To understand financial flows better, every bank has a Know Your Customer (KYC) engine. This is a payment infrastructure that supports onboarding processes and risk-based transaction monitoring. This system is already well known and we don’t need to elaborate on this further, as it is the fundamental building block to ensure the highest level of traceability across all transactions – including remittances and receipts of funds and foreign exchange transactions internationally.
However, KYC is limited and doesn’t include real-time analysis. What can be overlooked is a KYT engine – Know your Transaction. The aim of KYT (Know Your Transactions) is to identify potentially risky transactions and their underlying unusual behaviour for detecting money laundering, fraud or corruption. An automated concentration of transactions with accurate and relevant information directly from the original data sources is essential.
Finally, banks and payment companies need to implement anti-fraud modules to defend against cyberattacks, based on the latest algorithms capable of analysing transactions issued in real time and detecting anomalies or suspicious behaviour upstream, strengthening the security and transparency of payments and building a network of trust between issuers and recipients of payments.
In a post-COVID-19 world it’s clear that scams will become more common place. Within this environment there is a shared responsibility when mitigating the risk of financial fraud. The bank must educate and inform customers to enable them to protect themselves, while ensuring a robust technological infrastructure and ways of working are in place that protects customer data; their finances, and fundamentally their business and livelihood.
How One Bank Successfully Responds to Sophisticated Threat Actors
By Robert Golladay, Strategic Accounts Director, Illusive Networks
Cybercriminals and hacktivists have a special fondness for financial institutions. Continuous business innovation, complex ecosystems, merger and acquisition activity, fintech, cloud adoption and a growing consumer-driven attack surface multiply the problem for financial organizations. Despite the vast resources financial institutions devote to cybersecurity, one challenge has been especially difficult to solve – that of detecting and stopping APTs before real damage is done.
Securing cloud-based banking
An active lender in the UK sought a new way to protect its customers and the valuable assets it holds. The bank needed to:
- Defend customer and employee information from compromise
- Detect and thwart sophisticated attacks
- Effectively defend cloud-based operations across accounts and instances
As a cloud-first company, the bank’s preference is to always invest in next-generation technology for operations and security infrastructure. In May 2016, with the help of Amazon Web Services (AWS), it became the first bank in the UK to be fully cloud hosted. The bank also uses AWS to deliver a financial technology service that helps lenders make informed decisions through data and automation.
Security is always a priority, which is one of the reasons the company chose AWS, conducts regular penetration testing, and performs advanced attack simulations. To maximize effectiveness of its layered security infrastructure, the company continually trains its employees and reinforces data security best practices.
In particular, the bank sought additional safeguards from sophisticated threats that evade other security measures, such as advanced persistent threats, as well as gain insight into attacker tactics and techniques. The new layer needed to be cloud-based for high scalability and flexibility, and it had to defend the company without time-wasting false positive alerts. The security team looked at deception technology and chose a solution that allowed them to gain real-time verification of anomalies and lateral movement in the network.
The deception solution enabled the bank to focus on attackers’ behaviour and perspective. The solution’s expertise in attacker methodology augmented the bank’s internal capability to detect novel attacks, while enabling rapid and adaptable coverage in its cloud-based environment.
The bank’s deception solution uses agentless, intelligence-driven technology that creates a dense web of deceptions and effortlessly scales across the infrastructure. Featherweight deceptions on every endpoint look exactly like the bank’s real data, access credentials and connections. When an attacker is confronted with deceptions, this deceptive view of reality makes it impossible to choose a real path forward. One wrong step triggers an alert to the bank’s security team.
The bank’s CISO found it invaluable to be able to deploy a solution that creates doubt and confusion in an intruder’s mind. When attackers can’t distinguish between real and deceptive assets, the security team can collect information and apply intelligence to patterns that it has observed during that time period of activity. The solution simultaneously sharpens the bank’s investigative process and constrain the attacker.
The lender easily deployed deception technology across its complex environment, scaling it across AWS instances and accounts. The IT security team now has continuous visibility and confidence that these defences enable them to thwart sophisticated threat actors.
The bank gained proactive threat response and the assurance that an alert represents a real issue. These alerts are only triggered when an attacker engages with a deceptive asset. At that point, the deception technology immediately begins capturing forensic data from the system where the attacker is operating, presenting real-time forensics and a quantifiable measure of potential business risk. It uncovered, for example, malicious processes trying to operate on an endpoint.
The deception solution enables the lender to be much more proactive. It detects and analyses attacks in real time to produce actionable alerts, directing the security team to relevant and valuable conclusions. The technology provides exceptional, innovative coverage for malicious pivoting and lateral movement. It uncovers the in-depth, sophisticated actors who evade other countermeasures and gives security analysts direct visibility into targeted attacks, which they find invaluable.
A laser-focused approach
The financial sector remains a perennial favourite of the cybercriminal crowd. As networks become more complex, their perimeters all but disappear, creating the need for stronger and more comprehensive security than ever previously imagined. Advanced persistent threats are a particular concern, as they are notoriously difficult to detect before significant damage is done. For financial institutions, the reputation damage alone may be insurmountable.
Banks and other financial services organizations pour resources into cybersecurity, but one option that needs further exploration is deception technology. This method of security monitors for lateral movements toward critical assets and thus provides a powerful alternative or enhancement to traditional monitoring approaches. Security teams can see attackers’ proximity to those crown jewels early in the attack cycle, buying time for careful response. As the lender above learned, deception technology cuts through the noise of alerts to deliver the intel financial institutions need to act quickly and safeguard their high-value data.
Why banking and finance need to move qualifications online
By Rory McCorkle, Senior Vice President, PSI Certification and Education Services
The global banking and finance sector often presents a strange contradiction when it comes to technology. On one hand, the sector is leading the way in blockchain technology, big data and Artificial Intelligence. On the other hand, many large financial institutions are falling behind in their digital transformation efforts, with internal processes as well as the moving the customer experience online. Particularly when compared to fintech and new challenger banks.
A report last year by Accenture found that just 12% of large traditional banks surveyed have fully committed to digital transformation and 50% of banks made little progress. The remaining 38% are in the midst of their transformations, but their digital strategies lack coherence.[i]
One area of digital transformation that has been particularly slow is access to qualifications and certifications. Many exams in the banking and finance sector continue to use Paper Based Testing (PBT). However, COVID-19 has accelerated the transition from PBT to Computer Based Testing (CBT), proving irrevocably that change is possible – regardless of the size of your organisation, number of candidates or security requirements.
In a heavily regulated environment that is undergoing increased scrutiny, a high level of certification and compliance is a necessity for many working in the industry. And credentials that hold such significance need to be securely and fairly assessed. This is where CBT offers numerous benefits. For organisations there is security, integrity, flexible capacity, increased reach and a streamlined exam administration process. And for candidates, CBT provides flexibility, convenience, accessibility and increased choice.
Despite these benefits, some organisations still have reservations and have been slower to make the move to CBT. In more traditional professions, such as finance, there can be a greater reticence. This is likely to be based on the historic prestige of PBT, as well as a desire to stick to more traditional methods. However, with more learning completed online, and educational resources shifting to digital from primary education to CPD, expectations around assessments are changing.
Up-and-coming candidates in all professions, particularly those who are digital natives, are starting to question outdated methods. Organizations will need to adapt to stay current and relevant with their market. What’s more, technological advances have now combined with the coronavirus pandemic to increase the demand for remote business services. Meaning that a growing number of organisations in the banking and finance sector are moving to CBT.
Technology offers burgeoning options to increase test security with CBT. Linear-on-the-fly testing (LOFT) for example allows you to easily change items for each candidate, while maintaining the fairness of the exam – rather than the fixed forms used in PBT.
With LOFT, every candidate is given a unique set of items, making cheating a lot more difficult. And with no need to ship test papers around the country, there’s significantly less risk of physical security breaches with CBT than with PBT.
With the movement away from paper and pencil testing, advances in online proctoring have also dramatically increased the ability to deliver secure online assessments. Using a webcam and microphone, online proctoring provides test security for exams, while offering candidates additional flexibility and convenient scheduling.
Even before COVID-19, online proctoring was becoming far more commonplace. In 2018, there was a 10% increase in organisations using online proctoring with video/sound recording and identity authentication as part of the exam process compared to 2017.[ii] And COVID-19 has reinforced the fact that it is possible to effectively move to CBT side by side with online proctoring – and move quickly.
Testing has changed a lot during its history but the reasons for adopting CBT have remained the same for decades – fair and reliable testing delivered at scale. Nearly all tests that are completed with a paper and pencil can be adapted for CBT.
For organisations in the banking and finance sector, recent technological advances have provided many more options to reach candidates. At the same time, technology has significantly increased the security for important online assessments that will not only affect a candidate’s future, but might also impact the future and reputation of their profession.
As with any change, the move from PBT to CBT must be managed carefully and communicated clearly. And with best practice in place, it is possible for any organization, regardless of size and number of candidates, to make the move to CBT.
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