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The customer always comes first
c o l u m n
The customer always comes first
Andy Churley
As the number of payment systems proliferates, financial institutions can save millions if they give customers a single identification and verification front end. ActivCard’s Andy Churley explains.
W
ith new payment channels such as mobile, digital TV and multimedia kiosks coming on stream, the need for a single identification and verification (ID&V) gateway is rising. In addition, up to a quarter of help desk calls, at between $10 and $31 per call, are to do with password problems. Given the potential to improve the customer’s experience through simplification and ease of use, and the potential saving in help desk administration costs, financial institutions need to pay more attention to ID&V technology. Imagine your local supermarket required you to pay for the goods each time you changed aisles, and that each aisle required a different payment medium: cash, cheque and credit card.This is what bank customers face. Customers don’t drive IT Remember, it is not the customer who is driving the choice of transaction channels, but the financial institutions; customers are simply taking their pick of the options,.
Infosecurity Today January/February 2005
Banks are victims of their history. They have introduced new transaction channels as the technology has advanced. In doing so, they have developed identification and verification (ID&V) procedures that take advantage of the new technology.Too often these emerge without considering other channels or the impact on customers. As usual, the technology history reveals advantages and disadvantages.The downside includes hacking, phishing and 419 scams. On the upside, segregated application development means that
access to one application does not often translate into access to another.This provides an extra but usually unplanned level of security. Having to jump through different hoops simply annoys customers.They also forget numbers and passwords. So, how can financial institutions reconcile improving the customer experience without reducing costs, without compromising security? The key considerations for an integrated multi channel ID&V solution fall into two areas: functional requirements and architecture requirements. Functional requirements An effective multi-channel ID&V system must be able to operate across all channels for all external and internal users. It must permit management of customer profiles, including identification, verification and authorisation rights. It must also maintain a full audit history and meet the operational risk management requirements entailed by legislation such as Basel II and Sarbanes Oxley. Once a customer presents him or herself to the system, he or she must then verify their identity.With a multi-channel environment, this must include all verification media from static passwords, PINs and memorable data, to one-time passwords generated by smart cards or tokens and even biometrics. These data need to match a unique customer authorisation profile that defines which transactions and data that customer has access to, including which channels.
Customer profiling Obviously, such an access schema will provide a secure auditable log of all customer actions and transactions. Properly designed, it will also give bank managers the ability to create sophisticated customer profiles that can aid account management, sales and marketing. In addition to handling identification and verification of existing customers and authorising actions and transactions, the ID&V solution must make the process of new customer registration fast, secure and seamless. Existing customers may already be registered for Internet banking or telephone banking, so they should be able to use their existing ID&V data to access other channels, products and services. Any ID&V system should robust and reliable for 24x7 operation. It should also allow for major growth in channels and services. Benefits A single ID&V procedure improves customers’ user experience. But it also offers banks the opportunity to cut and avoid costs.Add to this the rapid return on investment from reduced call centre resources required. It also promotes a seamless shift to lower cost, direct channels. It also allows banks to introduce new higher value services rapidly, cost-effectively and above all securely across all channels.
44
Andy Churley
The customer always comes first
Andy Churley
As the number of payment systems proliferates, financial institutions can save millions if they give customers a single identification and verification front end. ActivCard’s Andy Churley explains.
W
ith new payment channels such as mobile, digital TV and multimedia kiosks coming on stream, the need for a single identification and verification (ID&V) gateway is rising. In addition, up to a quarter of help desk calls, at between $10 and $31 per call, are to do with password problems. Given the potential to improve the customer’s experience through simplification and ease of use, and the potential saving in help desk administration costs, financial institutions need to pay more attention to ID&V technology. Imagine your local supermarket required you to pay for the goods each time you changed aisles, and that each aisle required a different payment medium: cash, cheque and credit card.This is what bank customers face. Customers don’t drive IT Remember, it is not the customer who is driving the choice of transaction channels, but the financial institutions; customers are simply taking their pick of the options,.
Infosecurity Today January/February 2005
Banks are victims of their history. They have introduced new transaction channels as the technology has advanced. In doing so, they have developed identification and verification (ID&V) procedures that take advantage of the new technology.Too often these emerge without considering other channels or the impact on customers. As usual, the technology history reveals advantages and disadvantages.The downside includes hacking, phishing and 419 scams. On the upside, segregated application development means that
access to one application does not often translate into access to another.This provides an extra but usually unplanned level of security. Having to jump through different hoops simply annoys customers.They also forget numbers and passwords. So, how can financial institutions reconcile improving the customer experience without reducing costs, without compromising security? The key considerations for an integrated multi channel ID&V solution fall into two areas: functional requirements and architecture requirements. Functional requirements An effective multi-channel ID&V system must be able to operate across all channels for all external and internal users. It must permit management of customer profiles, including identification, verification and authorisation rights. It must also maintain a full audit history and meet the operational risk management requirements entailed by legislation such as Basel II and Sarbanes Oxley. Once a customer presents him or herself to the system, he or she must then verify their identity.With a multi-channel environment, this must include all verification media from static passwords, PINs and memorable data, to one-time passwords generated by smart cards or tokens and even biometrics. These data need to match a unique customer authorisation profile that defines which transactions and data that customer has access to, including which channels.
Customer profiling Obviously, such an access schema will provide a secure auditable log of all customer actions and transactions. Properly designed, it will also give bank managers the ability to create sophisticated customer profiles that can aid account management, sales and marketing. In addition to handling identification and verification of existing customers and authorising actions and transactions, the ID&V solution must make the process of new customer registration fast, secure and seamless. Existing customers may already be registered for Internet banking or telephone banking, so they should be able to use their existing ID&V data to access other channels, products and services. Any ID&V system should robust and reliable for 24x7 operation. It should also allow for major growth in channels and services. Benefits A single ID&V procedure improves customers’ user experience. But it also offers banks the opportunity to cut and avoid costs.Add to this the rapid return on investment from reduced call centre resources required. It also promotes a seamless shift to lower cost, direct channels. It also allows banks to introduce new higher value services rapidly, cost-effectively and above all securely across all channels.
44
Andy Churley