The adoption of new technology in the financial services sector has escalated even further during the COVID-19 crisis and shown how transformation can reshape how we work and live. The rapid shift to digitisation among both traditional and emerging providers has changed the competitive landscape and how they meet consumers’ heightened expectations and increased demand for digital services. 

In addition to the promise of speed, convenience, and choice from an enhanced digital offering, financial services providers need to consider how they can provide customers with a seamless user experience while ensuring their personal information stays authenticated and secured within a rapidly changing regulatory environment. 

In Southeast Asia, a framework on Personal Data Protection was adopted in November 2016, establishing a set of principles to guide the implementation of measures at both national and regional levels to promote and strengthen personal data protection in the region. While ASEAN continues to build momentum to protect the data and privacy of its more than 600 million citizens, it is critical for financial services providers to address and comply with the various data privacy laws that apply in individual markets. 

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Beyond compliance however, providers also need to consider the growing customer touch points as consumers increasingly access bank accounts and financial products from different devices. It is no surprise that many are turning to cloud-based Customer Identity and Access Management (CIAM) to not only secure the identity data of their users, but also improve the user experience. 

Security best practices like Multi-Factor authentication (MFA) and Breached Password Detection should be standardised across all financial institutions. These increase security and provide users with seamless and frictionless authentication, while giving providers a single view of their customer base with significant marketing gains.

Moving beyond passwords

In the past, usernames and passwords were considered secure enough to give providers and customers peace of mind. This is no longer the case. 

Passwords are much less secure than we think.65% of people reuse passwords across multiple accounts, and most of us tend to be rather uncreative with our choice of login information.

Building modern authentication, however, goes beyond usernames and passwords. CIAM provides a framework for managing identity, and enabling the right individuals to access the right resources at the right times for the right reasons. As the number of devices per user increases, as does continual demand for information access from any/every device (including IoT), financial providers are using a more holistic CIAM strategy, that can scale to any number of users, devices, and APIs, and keep data secure. 

Multi-factor authentication is your double security door

Multi-Factor Authentication adds an additional security layer in the authentication process that is most effective when the requirement is the validation that comes from the user’s personal device. Whether it’s a fingerprint, or a special code sent directly to the phone (as opposed to a simple question that needs to be answered), this second layer of personalisation makes the hacked password practically ineffective. This is particularly important for banking institutions and financial firms for gaining customer trust, as it can help them provide their customers with further reassurance that there is a high level of security with their financial information.

It is imperative that as new technologies are adopted, financial services providers educate their customers around the benefits of Multifactor Authentication and Breached Password Detection. To achieve this, integrating these authentication methods into consumer financial apps needs to be easy and practical, not only empowering customers to opt-in, but also showcasing these institutions’ commitment to data security and protection. A successful tactic for wider adoption is to provide an institutional perk that will motivate users to sign on. They secure their information and get rewarded for it at the same time. 

Gain visibility into your customers

Financial services institutions have a wealth of customer data at their disposal, especially around spending patterns and consumption preferences, and a comprehensive CIAM strategy can provide crucial customer insights by leveraging user data to create a 360 degree view of each customer. 

This information can be integrated into CRM and e-commerce systems, enabling financial institutions to make informed decisions around what products can be recommended to a specific customer or tailoring content according to their specific needs and priorities. There is a great deal of information about personalisation’s impact on conversion rates – this Salesforce study found that personalised mobile recommendations resulted in 4.2x greater conversions. Relying on a comprehensive view of the customer enables any financial institution to deliver a much better and more impactful experience.

CIAM brings increased security and real business value

While the financial services industry is adjusting to a new playing field with widespread adoption of new technologies and digitisation, providers can assert their digital-first offering by providing consumers with a secure, seamless user experience. 

Cloud CIAM platforms have taken centre stage as an integral way to check off the boxes of user experience, data security, authentication, and much more. With the right identity platform in place, financial organisations can surge ahead by keeping customers loyal and offering the most innovative and secure user experience possible. 

Contributed by Richard Marr is Regional Director, APAC, Auth0

About the author

Richard Marr is Regional Director, APAC at Auth0, the identity platform for development teams. Richard has extensive experience with cloud-native, SaaS services and business leadership in the APJ region. He has a proven track record of building high performance teams to support large organisations in building, running and securing modern applications both on-premise and in the cloud.