Knowing the customer is a fundamental tenet of the banking industry. When we visit our local branch to perform our daily banking or receive other services, we must as a first step identify ourselves to our banking officer, often with multiple pieces of identification. We intuitively understand this and, frankly, expect our banking institution will challenge us to identify ourselves before we do any business.
Why then as online banking customers do we have less tolerance for such minor inconveniences? And is strengthening online authentication enough to thwart criminals who aim to steal our online banking credentials or otherwise compromise our online banking experience?
As criminals turned their sights to banking customers using various sophisticated techniques (phishing, malware, keyloggers, and Trojans, to name a few) designed to steal online banking credentials, the banking industry responded by implementing equally sophisticated, stronger, multifactor authentication technologies and techniques. While these solutions provide greatly improved security, many also added noticeable complexity to the customer's user experience, which from a marketing and customer relationship perspective is not desirable. Consequently, managing the tension between user experience and security became the key success factor for online banking.
It is clear with the ever-evolving nature of online threats, coupled with the desire by our customers to be able to do business with us online from anywhere in the world via the devices of their choice, banks must look beyond authentication to deliver a secure online banking experience, and that we must partner with our customers to ensure our collective online safety.
The term "customer protection" has emerged in the banking sector to refer to the focus banks must have on helping keep their customers safe while online -- not only while they're connected to their online banking sites -- but during all online activity. We have seen most, if not all, forms of strong authentication defeated by motivated criminals. So the answer appears to be multifaceted in terms of what must be in place to keep our customers safe from the predators who wish to steal their credentials. In other words, focusing on strengthening customer authentication, while a critical aspect of the overall defense strategy, appears not to be enough.
Here are a few areas of focus (in no particular order) for solving the customer protection puzzle:
1. Security 101
Plainly stated, our customers still have difficulty doing the basics, such as keeping their antivirus programs up-to-date, making sure they apply the latest security patches, and using a personal firewall. Even though many companies offer free anti-malware programs and despite our industry's best efforts to raise awareness, many customer PCs fall victim to the plethora of malware that aims to steal their credentials or inject malicious code into their browser sessions. International criminal organizations are also building software that is designed to defeat the most pervasive security authentication technologies deployed by banks worldwide. Technology that protects browser sessions have emerged and by all accounts certainly provide an important additional layer of protection. Many banks are looking to this type of technology to extend protection directly to their customers’ computers. Of course, the criminals also have their sights set on this defensive technology.
Education is easy to point to as an area of focus, but difficult to quantify in terms of effectiveness are consumer awareness campaigns. Nonetheless, all banks must have a constantly evolving, dynamic set of awareness materials, techniques, and campaigns to ensure customers are aware of the dangers that exist online and that they play the most important role in their own online safety. Remember that fraud loss results are the ultimate measurement here. More important from the banker's perspective is despite the fact banks (especially in North America) typically do not hold our customers liable for losses resulting from online frauds, we must educate our customers that the damage can extend beyond simple financial fraud. The criminals who compromise the customer's credentials could gain access to additional personal information (bill payees, employers, investment status, etc.), which can be used to commit additional and potentially more damaging offline identity theft related fraud.
The key message: Even with zero liability for online fraud related losses, customers do, in fact, have a key responsibility for staying safe online. Even the best and latest technology cannot protect customers once their end device has been compromised.
3. Risk-Based Authentication
This model implies different levels (strengths) of authentication based on risk factors, such as transaction type or size, customer profile, etc. Keep in mind that the customers who have the highest need for strong authentication and additional security often have the lowest tolerance for the imposition of additional security procedures, especially since they know if they are compromised their bank will not hold them liable. Refer to the previous item -- we must constantly educate our customers.
4. Browser Protection
This refers to technologies that protect, or "sandbox," browser sessions while customers are connected to specific websites. These technologies disable the often exploited browser helper objects that criminals use to inject malicious code into a user's session to perpetrate man-in-the-browser attacks, which have been known to defeat many forms of strong authentication. One way to improve browser security is to encourage users to upgrade their browsers. In many parts of the world, users are still using browsers that are several years old when upgrades are available at no charge.
5. Fraud Monitoring and Incident Response
A critical and often underemphasized element in the battle against online fraud, this area could save your bacon if all else fails. It's important to get this right. This is a complex, often expensive, proposition, but should not be overlooked because it's the last line of defense before the money walks out the door.
In future articles, I will dive deeper into each of the five areas above to explain the benefits and the challenges with each.
It is encouraging to finally see an increasing demand from our customer base for more visible security, and this appears to be finally emerging as a potential competitive advantage. Our marketing teams are now more engaged than ever to position improved customer protection as a feature of our online banking channels. This is exciting because we no longer have to sell the idea that security is important -- it is fundamental. Online security is now more understood than it has ever been, and I look forward to partnering with our customers to ensure they remain safe while online.
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