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The end of the ‘one-size-fits-all’ approach to digital banking

Banks need to ensure they are one step ahead of competitors in developing an engaging and easily navigable customer experience

Gulf News

Over the last decade, the rise of smartphones and mobile devices has transformed the banking experience. This phenomenon is particularly true of the Gulf region where millions of consumers embrace an integrated mobile banking experience, using their smartphones, tablets and wearables to do everything from buying products and services online to opening new accounts and making payments. According to a recent report by McKinsey, the UAE currently has 92 per cent internet penetration and 80 per cent of these users prefer to do their banking on their laptops, smartphones and tablets, leaving in-person bank visits for more specific and complex banking needs.

Today’s customers expect to be able to log in, check their balance and make payments instantly on multiple platforms, wherever they are and whenever they like. While banks have responded well for the most part by offering new digital services and authentication methods such as iris scanning — there is still much more work to be done to move away from the “one-size-fits-all” approach to digital banking.

One size fits all approach?

What exactly does “one-size-fits-all” mean? Banks have the tendency to apply security policies and innovations in the customer journey across the board, without considering the unique requirements of each individual consumer. With the rise of fintech start-ups in the UAE and new banking regulations which are expected to increase competition in the sector, the customer experience is becoming an increasingly important differential and a more nuanced approach is becoming increasingly necessary. Banks need to ensure they are one step ahead of competitors in developing an engaging and easily navigable customer experience, and personalisation offers a way of achieving this.

Today’s banking customers demand a personalised experience, as well as a more secure and convenient digital banking journey. At Gemalto, we recently commissioned a survey into consumer expectations, which highlighted the need for robust security policies placing the individual consumer at their core. Almost half (49 per cent) of UAE consumers cited that they would change banking providers if their current bank had been breached, while over half (52 per cent) would switch if they knew another bank was offering better security measures. Furthermore, the appetite for biometric authentication (security process that relies on unique biological characteristics such as fingerprints and retina and iris patterns), identified by 59% of UAE consumers as something they would be willing to use for mobile banking, demonstrates the desire for a customer journey based around individual characteristics and preferences.

A smarter, tailored approach

Technological advances mean that it’s possible to construct a comprehensive security policy that adapts to individual needs in real-time. One such approach combines machine learning, artificial intelligence, and adaptive biometric authentication to offer convenient and robust protection. Using these techniques, it’s possible to intelligently and automatically analyse a user’s banking profile and identify any unusual behaviour, requesting an additional layer of verification if necessary. For example, if a user made a purchase every lunchtime at the same restaurant, but then suddenly completed a transaction in another country, the system would recognise the unusual purchasing pattern and request additional verification, perhaps through a fingerprint scan.

A solution like this offers benefits for consumers and banks alike. For financial institutions, it allows them to cut operational costs by instantly recognising unusual purchasing patterns without the need for human involvement and it provides bank managers with detailed information on the nature of the potentially fraudulent activity. Furthermore, it enhances risk management processes by establishing multiple layers of assessment, such as device, location, and user behaviour. The customer, meanwhile, benefits from an effective security solution that doesn’t jeopardise the seamless banking experience they have come to expect from digital services. It also provides them with a personalised authentication journey, altering the number of verification steps required based on the transaction being completed and the user’s profile.

Striking the balance between security and customer experience

The balance between security and convenience is becoming increasingly important for banks as they roll out digital services. It’s all very well investing in multi-layered security policies, but if the customer experience is not seamless or it prevents personalisation, then it may drive people away towards rival mobile apps, something traditional banks can ill afford. In fact, over half (52 per cent) of UAE customers surveyed by Gemalto would leave their bank if another provider was offering a better service. It is evident from these insights that the best solutions maintain the frictionless digital experience, but come equipped with sophisticated security mechanisms built around each individual customer.

In our increasingly mobile, personalised world, the “one-size-fits-all” approach to digital banking solutions is no longer sufficient to meet customer demands for increased security and a convenient customer experience. As our research shows, users want to feel as though banks are actively shaping the customer experience around their individual preferences, while maintaining safety and security. It’s time to bid farewell to the old world and embrace a new era of truly personalised banking.

Marwan Elnakat, Digital Banking Solutions Director for the CISMEA region at Gemalto