Multi-factor authentication: key to a secure banking experience

The way we bank is changing. Consumers are increasingly using alternative banking methods such as mobile, telephone or online, and we are seeing a decline in in-branch transactions.[1] This shift in banking habits poses new challenges for banks in regards to the identification and verification of consumers. When transactions are carried out in branch, this process has traditionally been much easier.

However, the authentication of remote banking customers is much more problematic and is an area which is seeing increasing amounts of fraud, with remote banking fraud increasing by 72% and telephone banking fraud by 92%.[2]

To help combat fraud and improve the customer experience, banks are continually introducing innovative ways to verify their customers. Citibank for example, have recently launched a new solution utilises voice biometrics to analyse a consumer’s voice; verifying their identity in just 15 seconds. This represents a 66% reduction from the usual 45 seconds it takes to verify a caller’s identity.[3] A key feature of this is the increased convenience it would bring for consumers, as they would be undergoing verification without having to inconvenience themselves.

Traditional authentication processes are inconvenient and time consuming. No one likes to be on the phone for five minutes going through various questions, ranging from the name of their first pet, to their mother’s maiden name. They are also not very secure as they risk exposing your account to other people who may have access to your personal details.

In order to thrive while remaining secure, organisations will face the challenge of combining consumer convenience with effective strong authentication.

Those who are able to overcome this challenge, and make a smoother and more convenient authentication process for their customers, can potentially attract many new consumers who are disgruntled with their current providers and their cumbersome authentication processes.

Authentication solutions act like defences against fraud, and like all defensive measures, they work best when used in combination with each other. It is important that authentication solutions such as biometrics are combined with other authentication methods, to offer the greatest levels of protection, while maintaining a smooth customer experience.

MYPINPAD’s technology, which utilises familiar Cardholder PIN to identify consumers across sectors, devices and channels, is an example of such a solution.

The key to ensuring security and avoiding fraud is multi-factor authentication, which combines a number of effective solutions to verify the identity of users. Multi-factor authentication typically utilises at least two of the following categories: knowledge (something they know); possession (something they have), and inherence (something they are).

[1] The Way We Bank, 2015

[2] Financial Fraud Action, 2015

[3] http://www.chinapost.com.tw/taiwan/business/2016/05/18/466489/Citibank-launches.htm§

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