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Security matters, but so does innovation and user experience

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Today, there is increasing attention devoted to regulation and security. While these measures work to put consumers’ fears about their personal security at ease, there is a concern that other parts of the business – like innovation and user experience – are neglected.

According to a recent report from Javelin, card issuers and banks only looked to invest 32% of their planned digital investment into new features and experience – a lower percentage compared to other industries surveyed. Additionally, plans for new products were 7% less than the average of all businesses surveyed – something to take note of as the industry focuses on privacy and digital fraud mitigation.

During digital transformation, the implementation of improved security and privacy is imperative, but firms still need to put an emphasis on user experience to ensure their customers have a seamless process for both security and their banking needs on whatever channel they prefer.

As the adoption of different modes of communication continues to rise, the number of digital channels that become available are impacting user engagement. Financial institutions are aware of the importance of security for their customers – it’s a main reason they have them in the first place – but they also must keep it in mind when thinking about the significant role it plays in the user experience when conducting digital transactions.

For instance, banks have introduced another touchpoint to engage with their customers and increase loyalty with peer-to-peer payments. While introducing faster payments services puts banks at an advantage because they are catering to a need that consumers’ desire, it’s imperative that security standards are upheld, even if the increased pressure for speed has an impact on the time available to ensure safety.

But by implementing real-time features like smart messaging, banks can combine the interests of all parties – the ability to successfully engage with the customer while also being able to block fraudulent transactions from settling.

Customer insights are a gold mine when it comes to building trust. With more consumers demanding relevant, personal experiences, financial institutions can put themselves at an advantage by using data – with customer consent and understanding of how that data is being used for their benefit. In an effort to differentiate while becoming a consumer go-to, BCG reported that one bank saw a 20% increase in revenues over three years because it had reinvented its personalization strategy – a testament that putting in effort to understand consumers has its benefits.

Firms need to understand the importance of meeting and exceeding modern customer expectations. As technology continues to enhance and transform the banking industry, the ability for financial institutions to create more touchpoints and build trust through insights and engagements will only put them at an advantage, all while making sure that they aren’t sacrificing the security that put them on the map.

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Payment fraud Digital payments Faster payments Financial institutions Cards Merchant ISO and agent
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