Customer identity and access management for banks

By Simon Wood, CEO at digital ID services provider, Ubisecure

28 April 2020

The financial services sector is a pioneer of digitalisation. With online banking constantly evolving, the industry and its disruptors continue to spearhead customer experience (CX) innovation and shake up the status quo.

As digital offerings from FS organisations become increasingly sophisticated, however, user demands have risen rapidly. Customers now expect user-friendly services and streamlined efficiency from their online banking services – and if they don’t receive this, they can easily turn to a competitor to find what they are looking for. Providing an optimal user experience across banking applications is therefore business-critical for engaging with and attracting new customers.

At the same time, financial information is among the most sensitive data and, unsurprisingly, customers expect their FS providers to treat it as such: the risk of breach is not an option. A fundamental step for any digitalisation initiative, then, is to decide how users will verify who they are when accessing a banking application and which areas they have the right to access – a task that has very specific identity and access management (IAM) requirements.  

With identity as the new perimeter of online services, banks will know that customer-friendly IAM is crucial for not only protecting highly sensitive customer data, but also for ensuring seamless experiences. This is why many are benefiting from customer identity and access management (CIAM) – a relatively new subset of IAM focused around managing the identities of external users such as customers and partners.

So what steps should banks take to implement and optimise their CIAM tools? Here are some useful tips.

CIAM tools: the benefits

Identity management is the first touchpoint customers have with a banking application, and getting this interaction right is vital for setting banks up for increased customer conversions and ongoing loyalty. By deploying CIAM, they can easily strike a good balance between security and user experience, which can otherwise be a challenging process.

CIAM encompasses a number of tools, each with their own advantages. Here are some examples of how FS organisations can successfully implement and utilise these: 

  • Multi-factor authentication (MFA)

When taking a secure, layered approach to identity, implementing MFA or 2 factor authentication (2FA) is key. MFA involves users verifying their identities with two or more authentication methods – this can be something a customer has, such as a mobile device, something they are, using a fingerprint, for example, or something they know, like a password. With MFA, banks can improve the overall security of their online services – by creating two or more authentication hurdles, the chances of a hacker breaching the system is significantly decreased. 

What’s more, the arrival of new regulations around Strong Customer Authentication (SCA) for online banking earlier this year means that a multi-layered approach to digital identity is now crucial for both banks and businesses. MFA is a step in the right direction for banks looking to secure their services and adhere to complex financial regulations such as PSD2 and Open Banking.

However, MFA has, at times, been regarded as complex and costly, which has led to its slow uptake until now. To optimise usability and reduce costs, banks should offer MFA experiences that suit the user – for example by allowing customers to use convenient verification options, such as existing credentials linked to mobile devices. This avoids the need for customers to remember extra details, and therefore increases the usability of the service. 

  • Single sign-on (SSO) 

SSO is a core CIAM capability, providing users with one digital identity for authentication across all connected online services. Essentially, with SSO, users can access all the applications linked to their bank with one secure identity, rather than logging in to each service with a separate set of credentials. As well as boosting CX and satisfaction, this also frees up IT teams to focus on value driven tasks, rather than managing passwords and user identities.

SSO also reduces password fatigue amongst customers. With only one set of credentials to maintain, users are more likely to develop stronger passwords and increasingly opt to use MFA. Security is further strengthened as all services link to a singular view of permission settings for each user, leading to an easy revocation of access rights.

  • Self-service account management

    Self-service account management allows customers to manage their own identity details – such as password resets, and consent and communication preferences. Not only does this improve the customer relationship and gain trust, it also reduces costs for identity management teams and enhances user experiences.
  • Federation

With federation, FS organisations can connect their own services and external third party services, allowing them to increase awareness around their business. For example, as FS companies often already invest in strong KYC assurance practices, other services will pay for use of the system, generating new revenue streams.

In addition, federation can significantly boost CX by allowing SSO to other federated services, removing the frustrations around numerous different credentials for each service.

  • Delegated authority

Digitising delegation processes through CIAM can result in enhanced efficiency across banking organisations, as well as cutting costs and improving security. By automating the admin heavy tasks around account access management, users can log in to online services via a secure, streamlined process.

Through delegated authority, customers can also delegate functions within the service easily. For instance, they can securely delegate access to financial accounts to a trusted individual or legal service should they need to. 

Gaining a competitive edge with effective CIAM

To survive in an incredibly competitive environment, it’s vital that banks master two fundamental, interconnected components: CX and security. And deploying efficient identity management practices is a crucial first step.  

With CIAM capabilities, banks can digitise and streamline identity management processes to enable the smooth running of services as users interact with applications. Ultimately, by prioritising a streamlined and safe CX, banks will not only gain customer trust and loyalty, but also a competitive edge.

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