In the past year, the alarming rise in identity theft has become a global concern, catching the attention of the public. A recent report revealed that consumers are increasingly seeking greater security from their banks, with 56% desiring more safety measures for non-routine transactions and 47% for even routine transactions.
This surge in identity theft calls for constant evaluation and updates to security systems, particularly for financial institutions. Here are three crucial components of digital financial security, collectively referred to as the three A’s:
1. Authentication: Verifying the identity of the person logging in.
2. Authorisation: Determining whether they are permitted to perform actions on the account or platform.
3. Accounting: Creating a record of their activities for potential future queries.
While authorization and accounting usually happen in the background, authentication requires user interaction with security features. However, organizations need to strike a delicate balance between security and user-friendliness.
Authentication typically involves a combination of three puzzle pieces: something the user knows (e.g., a password), something they possess (the device used), and something they are (biometric elements like fingerprints). This multi-layered approach is highly secure but can become burdensome for users, potentially deterring their engagement. Striking the right balance is crucial, and organizations should consider their typical customer risk profile to tailor their authentication methods accordingly.
Continuous evaluation and updates in security measures are vital, as fraudsters continuously adapt and devise new tactics. Proactive companies like Ukheshe offer tools to prevent scammers from accessing and misusing consumer credentials, staying ahead of evolving fraud trends.
The fast-paced evolution of security measures is evident, with older technologies like fingerprint authentication being exploited by fraudsters. To counter this, advanced biometric devices now employ measures like fingerprint temperature checks or using light to verify blood flow. Similarly, facial and voice recognition methods face challenges from AI advancements, such as generating voices with minimal samples or creating realistic videos using facial photos. To maintain robust security, continuous updates, and advancements are imperative to outsmart potential threats.
For larger financial institutions, integrating newer authentication tools into their legacy systems can pose challenges. However, fintechs like Ukheshe simplify this process by providing APIs for automatic integration, thereby ensuring that financial institutions remain at the forefront of security.
Whether handled in-house or outsourced, there is no room for complacency. Trust is earned through vigilance and staying ahead of the latest technology. One significant breach can shatter that trust, even if it’s not the organization’s fault. Staying ahead ensures data safety and trust in a digital world, a constant responsibility amid competition.
By Paul Carter-Brown, Co-founder and CTO of fintech enablement partner Ukheshe,