Delivering the right balance: One in three consumers want more visible security for infrequent transactions

Entersekt recently completed a consumer survey in partnership with PYMNTS.com entitled Consumer Authentication Preferences for Online Banking and Transactions. The survey results revealed that today’s banking customers think differently about how they transact, and the safety of their transactions.

For one, they are three times more likely to use a smartphone for online purchases and services than computers. In addition, two out of three consumers are more concerned about the security of their private data than convenience.

Financial institutions (FIs) should be in tune with the diverse needs of their customer base to deliver a user experience that balances convenience and security, and ultimately improves resilience and attracts more customers.

Turning banking challenges into opportunities for resilience

Cybersecurity remains a major concern for financial services providers (FSPs). In the US alone, over 1,800 significant data breaches were reported in 2021. But fraud prevention is not the only challenge for today’s banks and credit unions. Modern consumers are more informed and tech-savvy than ever before. And they expect a high degree of personalization and convenience from their banking experiences.

"Modern consumers are more informed and tech-savvy than ever before. And they expect a high degree of personalization and convenience."

We know this is something that fintechs are known for, but many financial institutions are lagging behind. To maintain a competitive edge, traditional FIs should take a page from these agile FSPs that deliver a modern, simplified customer experience.

Lessons learned could potentially transform current challenges into opportunities to simplify, differentiate and build resilience. FIs adopting more seamless processes – such as invisible security – have the tools to push up customer satisfaction levels.

Banking security preferences: Visible vs invisible

Invisible banking security is similar to invisible banking, where less is more. With banks always keeping their customers’ needs top of mind, they don’t need to constantly intrude on their everyday lives. 

Invisible security also happens in the background and doesn’t require the customer to take any action. It's well-suited for frequent transactions, such as a regular beneficiary payment — when they don’t want to be interrupted by visible authentication steps.

However, when consumers are not satisfied with their bank’s level of security, they are twice as likely to want more visible security measures to verify their identity, the report revealed. In addition, one in three consumers want their FI to use more visible security for infrequent transactions than for routine transactions.

"When consumers are not satisfied with their bank’s level of security, they are twice as likely to want more visible security measures to verify their identity."

From a broader view, preferences for invisible versus visible security measures are likely use-case dependent. For instance, one in three millennials want their financial institutions to use more invisible security measures, while the same ratio indicated they want more visible security measures.

In essence, the findings suggest that when customer trust is high and they know their data is secure, they feel more comfortable prioritizing invisible security measures — and greater convenience.

“When consumers trust that their financial institution is keeping their personal data safe, they become less interested in visible security measures for frequent online transactions. And again, it’s not surprising to see that 62% of consumers don’t want to verify their identity every time they pay for goods and services. One trend that particularly excites us — and ensures banks can meet their customers’ changing needs well into the future — is that 66% of consumers champion modern authentication methods, like biometrics. With this trend, banks can focus not only on reducing the risk of fraud losses, but deepening customer relationships.” says Frank Moreno, Entersekt CMO.

Navigating the trust–convenience relationship in online banking

Trust and convenience are closely linked for consumers. The more trust, the more likely they are to only want verification the first time they perform a transaction or access their accounts.

The report also indicates that 83% of consumers believe their financial institutions provide the highest level of security. And though approximately three in five consumers prefer to verify their identity when buying goods and services, they don’t wish to go through the same verification procedure for every subsequent transaction. What’s more, 62% of consumers do not want to verify their identity every time they pay for goods and services.

When it comes to accessing their accounts, the sentiment is similar with 22% of consumers wanting to verify their identity only the first time they access their bank account.
Essentially, the data reaffirms that banks should be leveraging invisible security for frequent transactions — to deliver a convenient, uninterrupted service to their customers.

And remember that, together with convenience, consumers want autonomy over their banking experiences that translates across all their devices, anywhere, and at any time.

Managing digital banking device and security preferences

Advancements in digital banking have transformed the entire industry and how its customers operate. On the one end of the scale, respondents shared that they are three times more likely to use a smartphone to purchase goods and services than computers. On the other end, 38% of baby boomers and seniors stated that they still prefer conducting all their digital transactions on their computers.

The results also suggest that consumers are five times more likely to use a smartphone to send and receive money from family and friends. Yet, consumers were 46% more likely to use a computer for paying their monthly bills and loans compared to paying for goods and services.
Looking at the security aspect of devices, 57% of consumers believe that computers and smartphones are equally secure when making transactions.

"57% of consumers believe that computers and smartphones are equally secure when making transactions."

These divergent preferences and expectations present FIs with a unique challenge. One approach that rings true across the spectrum, is ensuring simplicity and convenience for everyone’s banking experience.

But to accomplish that, FIs need to shift from passwords to strong authentication solutions that simplify the user experience.

Closing the customer gap with innovation and world-class authentication

The report suggests that consumers prefer more dynamic, secure methods of authentication. In fact, 66% of consumers prefer to use biometrics to verify their identity, and view biometrics and multi-factor authentication as the most secure ways to verify their identity. Plus, one in three consumers who have used MFA prefer this method, while only 25% of consumers who use a password actually prefer password authentication.

For many FSPs, their customer authentication journey remains a challenge, which unfortunately widens the customer gap.

With Entersekt, financial institutions can leverage world-class authentication solutions and get the balance right — providing their customers with visible and invisible security plus the resultant convenience.

For more in-depth insights on current consumer thinking around banking security, download our Consumer Authentication Preferences for Online Banking and Transactions report, created in partnership with PYMNTS.com. Access report.