Security and trust are the most important and valuable factors in banking. Customers expect top-notch security from their financial institution to guarantee their funds are well-protected against cyber threats.
However, it becomes a challenge to balance strong security measures with a frictionless digital banking journey. Financial institutions always strive to deliver the best and most secure customer experience possible, but if the protective barriers are too cumbersome, it can lead to frustrated customers and increased client churn.
Financial institutions should prioritize a well-designed interface that feels effortless to the user, but that is highly secure. Context-aware authentication and adaptive risk scoring to keep users safe without disrupting their journey. Zero-trust architectures, encryption, tokenization, and multi-factor authentication (MFA) are also good complementary technologies to keep a financial institution secure.
These technologies are resilient and provide continuous authentication as well as detection of unusual activity in real time to ensure protection for both customers and institutions.
Also read: Why security in digital banking is more than just a safe
Digital threats have been increasing every year, especially now with the help of AI. By exploiting weaknesses in transaction flows, mobile apps and even in identity verification, cybercriminals are becoming more sophisticated. This means that for banks, credit unions, and other organizations, cybersecurity is more than just a technical concern, it became the foundation for customer trust.
Financial institutions must know the essential basics of cybersecurity that safeguard users, mobile apps, transactions and identity.
For many account holders, mobile banking is now the primary channel for managing finances and carrying out transactions, which makes these apps a central target for cybercriminals.
Many fraud attempts are from attackers impersonating customers or gaining access to their accounts. These attempts include phishing schemes, leaked or even reused passwords, and identity spoofing with the use of stolen personal information.
It is easy for fraudsters because of the amount of data breaches and the weakness of traditional authentication methods. They also use technologies that enable to manipulate apps, use malware overlays and compromised devices to intercept information or alter payment details.
A zero-trust architecture and MFA authentication ensures this does not happen. Every connection is treated as not trustworthy and demands for an authentication every time one needs to access a financial service. The MFA demands for users to verify their identity through a second factor that could be biometric which is harder to steal and replicate for cyber criminals.
Financial institutions must significantly reinforce security across mobile environments and transactions to stay ahead of these threats. The use of AI can be useful in optimizing several areas such as fraud detection, Identity and access management, data security and so on.
Although new technologies and AI-driven agents help financial institutions safeguard and manage users’ finances, humans remain the last line of defense and must be continually strengthened.
Most successful attacks stem from human error, whether it is an accidental click on a phishing link or the unintentional sharing of sensitive information. Ongoing training and awareness programs are essential to reduce these risks by ensuring employees and clients can identify and respond appropriately to potential threats.
Context-aware authentication uses factors such as user location, device, time of access, network IP address and behavioral patterns to identify if the the user's login authentication is legitimate. It ensures only trusted users can access the banking app.
A Zero Trust Architecture (ZTA) assumes a "never trust, always verify" approach. It requires a continuous authentication verification for every time one wants access to data, regardless of the user, device or location. It is an adaptive, context-aware, risk-based model that eliminates implicit trust within networks and mitigate threats.
Multi-factor authentication requires more than one method of authentication to confirm one's identity when signing-in. It combines several factors: a password, PIN code, biometric data like fingerprint or facial recognition, and verification through a trusted device through a one-time password (OTP) for example.