When the coronavirus pandemic hit the world, banks and finance companies rushed to make their transactions digital. All the countries started imposing lockdowns to protect their citizens. Due to this, businesses shifted to work from home mode. They have shifted their daily transactions to mobile apps and online portals. Banks and financial institutions also postponed their previous business plans and started focusing on providing a secure payment experience to their customers.

Although, financial institutions have successfully made seamless digital payment and agency banking solutions, it also invited some unwanted security concerns and loopholes. Fraudsters are taking the benefit of these loopholes to cheat the customers. IT frauds and phishing attacks have increased dramatically during the COVID-19 pandemic.

Now here comes a question: How banks can tackle the issues of payment security to provide a frictionless banking experience to their customers? We have tried to answer this question here by showing you six ways to secure digital banking modes.

What are the steps to secure digital banking channels?

The role of technology has become vital in the new normal. Now the customers can conduct their transactions online by using a secure digital banking platform. Due to this, banks can increase their customer engagement by providing secure banking channels to their customers. Here are the steps that the banks need to implement immediately to secure your digital banking channels:

Customer-facing processes can be improved by using digital signatures. Digital signatures will strengthen the authorization procedure. Banks can also use the video-KYC or e-KYC method to provide more secure authentication.

1. Digitalise the whole process: 

Many banks have implemented digital banking methods successfully. However, some banks are still working on digitising their system. They have started using innovative banking systems in their administration. Employee related processes such as compliances, contracts, dispute redressal, legal contract, etc. have become digital. They can use cloud technology for storing their customer’s data. Due to this, there will be no issue of data theft.

Customer-facing processes can be improved by using digital signatures. Digital signatures will strengthen the authorization procedure. Banks can also use the video-KYC or e-KYC method to provide more secure authentication.

2. Recreate the customer experience

A better customer experience is essential for every business and banking is not an exception. That is why banks need to streamline their onboarding processes. Because if the account opening process is complex, chances are there that your customers may turn to your competitors.

Nowadays, banks have standardised their user databases. They have created a clear workflow for their managers by providing them with the necessary customer information. By analyzing these databases carefully, banks can get a clear idea of their customer journey, which product or services they need more and what issues they are facing in using these services.

3. Take benefit of the latest technology

Artificial intelligence tools are helpful for banks in preventing frauds. AI can easily detect the fraudulent patterns which the humans can't identify. Fraudsters have started using digital bots for malware and virus attacks. AI can easily detect and resolve those attacks. Also, the banks can get real-time information that can be available on both online and web platforms.

Loan application fraud is the new technique of exploiting customers which were increased in the times of the COVID-19 pandemic. In this type of fraud, a fraudster applies for a loan by creating a fake identity and misusing sensitive information of the customers. 

ID verification with facial recognition is one of the best ways to prevent digital frauds. In this method, a customer has to upload its government ID and then he needs to take a selfie. Facial recognition technology will verify the authenticity of the customer’s ID and also confirms that the person logged into the system is the one who has its photo on the ID.

4. Ensure that your apps are secure

Security becomes the top priority when it comes to mobile banking apps. Mobile banking apps face more security issues than websites. Because web developers know that web browsers are not secure. However, the developers blindly believe that the Operating System (OS) of smartphones is sufficient to protect the app.

The app developers should never assume that apps are secure. It may happen that the users are already having some virus or malware issues in their apps. These issues can bring major security threats to the banks. That is why banks should opt for the technologies that can protect their apps from malicious attacks.

5. Rebuild the risk strategy

When you are a tech-savvy organization, you get multiple benefits of it in the form of higher business and a strong customers base. But with these, the new types of banking frauds have also come into existence. That is why you need to reevaluate your current strategies and also you have to decide on what extent you can bear the risk. 

Once you have determined the level of risks, then you need to implement multi-layered security measurement to secure payments. Biometrics can also help the banks to prevent the rapidly growing frauds and risks.

Final Words

Traditional banks are facing tough competition from the new generation banks and fastly growing FinTech businesses. They also have to face new challenges and financial frauds in the times of the pandemic. Those banks who don't accept the digital payments channels will quickly lose their market shares and customers. They have to face issues with payment security.

Traditional banks need to focus on improving their customer experience, re-evaluating their business strategies, and leveraging the latest technologies to detect frauds. 

I hope this blog has provided you with relevant information. Do contact us if you still have any queries. Thank you. 

Author Bio: 

Nikunj Gundaniya, Product manager Digipay.guru, one of the leading digital wallet app development company USA, which provides mobile finance application development services. He is a visionary leader whose flamboyant management style has given profitable results for the company. He believes in the mantra of giving 100% to his work.