Every bank wants to earn its customers’ trust. Today, protecting customers’ identities is just as important to earning that trust as safeguarding their money.
Too many financial institutions, however, still treat identity protection as an afterthought. They fail to recognize that identity protection is not only a cybersecurity imperative but also a powerful driver of customer loyalty and engagement.
In a PaymentsJournal Podcast, Javelin Strategy & Research’s Tracy Goldberg, Director of Cybersecurity, and Dylan Lerner, Senior Analyst of Digital Banking, discussed the opportunity for banks and credit unions to offering identity protection services to customers and members. While these services deliver clear security benefits, financial institutions should also consider the risks of leaving customers vulnerable to identity-based attacks. As the saying goes, trust arrives on foot but leaves on horseback.
Seeking Security
Identity theft remains a widespread problem.
Consumers are increasingly looking to trusted partners to help them navigate identity theft risk, creating an opportunity for banks and credit unions to partner with identity theft protection services (IDPS) providers.
“There’s so many different ways to look at this, but at the end, it comes down to the fact that you should do anything you can to tell your customers, ‘Hey, security is important to us too,’” said Lerner. “Then all those ancillary benefits come into play.”
Banks and credit unions are uniquely positioned to help consumers recover from identity theft. Not only do they safeguard much of a customer’s or member’s financial assets, but banks and credit unions also carry a reputation for stability and trustworthiness.
“Cybersecurity generally is never thought of as a customer service or loyalty topic,” said Goldberg. “But consumers are telling us that when it comes to a cybersecurity incident—whether it’s a socially engineered attack like a scam or even malware that may have infected their device—they more often than not want to turn to a trusted partner like a financial institution.”
Not every institution has the resources to build a comprehensive cybersecurity program that includes identity theft resources in-house. As a result, many turning to white-label IDPS solutions that provide identity protection under the financial institution’s brand.
“I want the IDPS to be with my name and my branding, to not only build credibility but loyalty,” Lerner said. “There is something to be said about having a strong brand name associated with it.”
At the same time, there are advantages to partnering with a third-party provider that brings strong brand recognition and established expertise. The key is selecting a solution that best aligns with the financial institution’s overall strategy and customer experience goals.
Making It Accessible
An effective IDPS strategy should enhance, not complicate, the customer/member relationship. Prioritizing sophisticated technology at the expense of accessibility can ultimately undermine adoption and engagement.
“The most important thing in banking relationships is ease of use,” said Lerner. “Security is always second to being able to use something.”
There is risk in relying too heavily on generic educational messaging. When consumers are inundated with scam alerts and warnings, they often start to tune them out. Financial institutions should leverage their own data to personalize communications and tailor recommendations to individual needs. Just as importantly, every alert should include clear, actionable guidance on what customers can do next.
“So often when we look at the top 20 financial institutions, one of the missing key elements in education is making it actionable,” said Lerner. “That’s what a lot of these identity protection services provide. Rather than an identity theft kit that says, ‘Contact each of the three bureaus,’ provide a trusted provider that can help with the next step. That actionability is a big upgrade over education.”
Ultimately, identity protection works best as a partnership between the customer/member and the financial institution. That collaborative approach strengthens trust and builds longer-lasting relationships.
“If consumers find that identity theft protection adds value, you might find that your customers either add more products or stay with your financial institution longer,” said Goldberg. “That ancillary benefit is now available to them beyond just offering basic banking products and services that are pretty commoditized in today’s market.”
Customize the Offering
Financial institutions can bolster those relationships by ensuring that identity protection and other security offerings are customized. For instance, seniors may benefit from features designed for caregivers or family financial management. Other consumers with young children may have more interest in identity monitoring that includes the entire family. Different consumer segments face different risks, giving financial institutions an opportunity to deliver more relevant, personalized security solutions.
“This just goes to show me that the financial institution has the consumer’s best interest at heart,” Goldberg said. “They are helping me to shore up my cybersecurity, not only within my bank account, but also in my personal life.”
Financial institutions don’t have to be the experts in every aspect of identity protection. A well-chosen IDPS partner understands where consumers are most vulnerable and can identify when consumers need additional safeguards, enhanced monitoring, or offering hands-on support during identity recovery.
“The more secure your customers and members are, from a cybersecurity standpoint, in their personal lives, the more secure their accounts are going to be,” said Goldberg. “And the less risk you’re going to see as a financial institution.”
