Barclays security concerns have emerged alongside changes within the bank’s information security leadership and reports of fraud involving customer accounts. The developments raise questions about how effectively financial institutions can maintain strong security operations while managing organizational changes and expanding their consumer financial services.
For credit card customers, security policies can also directly affect the customer experience. Fraud controls that generate excessive transaction declines can make cards difficult to use, illustrating the challenge issuers face in balancing fraud prevention with reliable payment authorization and responsive customer service.
JetBlue card holders were well aware that Barclays security team was in disarray when Barclays took over the JetBlue portfolio from American Express. This analyst experienced a level of turn downs that made the card useless and customer service was non-existent. Reading this Bloomberg article it is likely the problem began at the top:
“Barclays Plc head of group information security Troels Oerting will probably not return to the British lender after his leave of absence ends, according to two people with knowledge of the decision.
Oerting’s leave and eventual departure are unconnected with his role in the Jes Staley whistle-blower scandal, said the people, who asked not to be identified speaking about confidential personnel matters. Oerting was interviewed by the U.K.’s Financial Conduct Authority several times over the past few months as part of an investigation into Chief Executive Officer Staley’s attempts to unmask an informant.
A spokesman for Barclays declined to comment, while Oerting didn’t respond to phone calls seeking comment.”
Barclays Faces Broader Security Challenges
Perhaps it was this distraction that enabled Nilesh Sheth to open up 400 fake accounts to pilfer £16million. It will now be up to Paul Gillen to try and right the ship, although how he will accomplish this when his assignment is only on an interim basis is difficult to reconcile:
“Paul Gillen, the head of Barclays’s joint security operation centre, will take over Oerting’s job on an interim basis, said one of the people. Gillen is also a director of the Cyber Defence Alliance, a group of law enforcement agencies and banks with British operations that share information to help prevent hacking. Oerting, the former head of Europol’s European Cybercrime Center, joined Barclays in February 2015.”
Security Problems Can Affect the Cardholder Experience
That Barclays security is in disarray is clear and JetBlue will need to deal with the fallout. While this analyst loves JetBlue the problems associated with the JetBlue card were too much and so it’s good-bye JetBlue, hello Delta.
Financial institutions must protect customer accounts while ensuring that legitimate transactions can be completed without unnecessary friction. Leadership changes, internal fraud incidents, and overly aggressive transaction controls can all complicate that balance and potentially undermine customer confidence.
For Barclays, addressing these security concerns will require more than preventing unauthorized activity. The bank must also ensure its fraud controls and customer service processes support cardholders effectively. Barclays security practices could ultimately influence how customers perceive not only the bank but also the co-branded partners whose names appear on its credit cards.
Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group
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