By Simon Wood, CEO, Ubisecure

When it comes to digitalisation, the financial services (FS) industry is constantly facing disruption. From large institutions to challenger banks, those working within the sector have had to move quickly to continue to attract and retain customers in a crowded market. This has meant innovating to deliver new digital offerings with optimal customer experiences (CX).

As digital services have evolved, user demands have also risen rapidly. Customers now expect user-friendly experiences and streamlined efficiency when they interact with online banking services. If this isn’t on offer, as with online shopping, it’s easy for them to switch to a competitor.

Simultaneously, financial data is among the most sensitive, so gaining customer trust is business-critical for FS organisations. In uncertain times such as these, and as more services are digitised, trust has been elevated to new heights in banking. Put simply, the risk of breach is not an option. A critical component of every digital service, then, is successfully verifying the identity of users when they log into a banking application, as well as ensuring they are accessing the correct areas of that application.

As the perimeter of online services, digital identity plays a fundamental role in online banking. Customer-friendly identity and access management (IAM) is vital for not only providing effortless experiences, but also for safeguarding important customer data. For this reason, many banks are implementing customer identity and access management (CIAM). A relatively new subset of IAM focused around managing the identities of external users (customers and partners), CIAM can deliver many benefits including increased security, higher efficiency and cost savings.

Optimising CIAM

The first touchpoint of the customer journey, identity management can make or break a banking application. Ensuring a frictionless and safe interaction here is therefore key for boosting customer conversions and loyalty. Implementing CIAM can help banks navigate the challenge of effectively balancing security and user experience.

There are a number of CIAM tools on offer – and each come with their own unique benefits. With that in mind, here are a few examples of how banks can deploy and utilise these for ongoing success:

Multi-factor authentication (MFA)

Taking a CIAM approach to MFA or 2 factor authentication (2FA) allows banks to implement secure and customer-centric digital identity management.

MFA involves users verifying identities with two or more authentication methods. This can include something a customer has (a mobile device), something they are (a fingerprint), or something they know (a password). By creating two or more authentication hurdles, MFA reduces the risk of hackers infiltrating the system significantly – resulting in increased overall security.

MFA is also fundamental for adhering to complex financial regulations like Open Banking and PSD2.  In addition, taking a multi-layered approach to digital identity is key for ensuring compliance to newly introduced regulations such as Strong Customer Authentication (SCA).

While MFA has in the past been regarded as difficult to use and expensive to operate, in recent years it has evolved to ensure it provides streamlined, cost-efficient experiences. By offering MFA that suits the user – such as allowing the customer to use convenient verification options – banks can increase usability and reduce costs.

Self-service account management

Self-service account management is a tool that allows customers to manage their own identity details – password resets, and consent and communication preferences, for example. By implementing this functionality, banks can reduce costs and enhance user experience, while at the same time build trusting customer relationships.

Single sign-on (SSO) 

As a main capability of CIAM, SSO  essentially gives users one digital identity for authentication across all connected online services. This way, they are able to access all applications linked to their bank with a single set of identity credentials, as opposed to logging into services with separate credentials. Not only does this lead to higher levels of customer satisfaction, but it also frees up internal time for more value driven tasks by cutting the time spent managing user identities and passwords.

Reducing password fatigue is, in fact, a core advantage of SSO. Users are more likely to create stronger passwords and choose to use MFA, given that they only have one set of identity credentials to maintain. In addition, as all services connect to a singular view of permission settings for each user, access rights can be withdrawn easier, strengthening security significantly.

Federation

Federation enables FS organisations to link their own services to external third party services. In doing so, they can boost awareness around their business, which can lead to a competitive advantage. For instance, since many FS businesses already invest in strong KYC assurance policies, other services can pay to use the system, generating new revenue streams as a result.

What’s more, federation can remove the predicament around having numerous different credentials for each service by allowing SSO to other federated systems. This can, in turn, dramatically improve CX.

Delegated authority

Lastly, to increase efficiency across banking organisations, along with improving security and cutting costs, banks should consider digitising delegation processes via CIAM. Through automating admin heavy tasks around account access management, delegating authority enables users to log in to online services through a secure and streamlined process.

With delegated authority, customers can also delegate functions within the service easily. Should they need to, for example, they can securely delegate access to financial accounts to a trusted individual or legal service.

Staying a step ahead of competitors

There has never been a more important time for banks to deliver innovative, effective and secure user experiences. As more companies transition to become ‘digital to the core’, putting in place strong identity practices is vital for meeting business goals. Implementing CIAM capabilities can help banking organisations ensure customer trust and loyalty, as well as obtain a competitive edge in a market where disruption is now the status quo.