The financial services industry is evolving at a rapid rate. From shifting customer expectations to disruptive technology, it has had to redefine itself and now leads by shining example as a sector that is an expert at digital.
A key part of this is down to the consumer. Today’s consumers are technically savvy, bold and know exactly what they want from financial services. There is a willingness to embrace innovation and engage with this industry more than ever before.
This has provided financial services organizations with a huge opportunity to embrace technology and create new ways to interact with customers, using their data to create a personalized experience in order to drive customer loyalty. As a result, consumers are more than generous with their data, trusting banks and other financial services to understand their spending habits and keep them on track with their payments.
Harnessing the huge business potential of customer data brings equally large risks. With cyber-attacks now making the headlines weekly, if not daily, and 90% of major organisations suffering a breach last year, consumers are now growing ever warier.
Data has become the 'new oil'
Customer trust has never been so valuable or so hard to come by, due to today’s high profile breaches. But, this consumer trust does come at a price. Data has been called the ‘new oil’ and, like any valuable commodity, there’s always someone ready to steal it.
While 97% of us are happy to share our data with banks if it is used to inform, make recommendations or add value to their financial services – according to research from Fujitsu- the downside is that almost two-thirds (59%) of consumers would switch bank or insurer if their provider suffered a security breach.
Customer trust therefore offers a huge opportunity for banks, with more than a third of consumers saying they are open to a diversification of their services, including broadband and home energy. But this also highlights a huge security threat.
Combating the threat
The real question for banks therefore is where they should focus their security concerns. With consumers more open to innovation than ever before and banks responding with new technology platforms, the digital alternatives for financial services will continue to grow. According to Fujitsu’s research, 67% of consumers don’t believe banks and insurers can protect their data, and only 12% of UK consumers trust banking on mobile apps.
As an industry, CIOs in banking and financial services have a huge challenge on their hands – securing multi-channel environments while mitigating security risks or reputation damage. It is paramount that the industry does not overlook, or get complacent about security or place it in the “too big to fix” category, and instead takes a proactive approach. As part of this approach, financial services need to be able to spot, react and defend against a breach quickly, by having a threat monitoring/detection system in place.
This provides the necessary context to deal with today’s advanced cyber-threats. Banks could also do more to help educate their customers to be more vigilant of the threats to banking, such as opening up unexpected emails.
The future
As the number of threats continue to increase exponentially, it has never been more important for organizations to protect data via means of encryption appropriately. This is particularly relevant within the financial services sector, due to the amount of personal data and highly confidential information that is at risk of falling into the wrong hands.
With digital continuing to pave the way in financial services, the industry can no longer afford for it not to be the number one priority.