How To Secure Customer Data During Customer Onboarding with Data Encryption

04.26.2022

How To Manage Customer Data Encryption

Customers want enhanced, personalized experiences from nearly every company they deal with — especially their primary financial institution. To offer that, your organization will need data — lots of data. And along with that comes the tacit expectation that your organization keeps customer data ultra-secure.

Personalization is the new standard for attracting and keeping customers. According to a survey of 1,000 U.S. adults by Epsilon and GBH Insights, the overwhelming majority of respondents (80%) want personalization from retailers. The appeal of personalization is high among consumers ages 18 to 64, with 80% indicating they are more likely to do business with a company if it offers personalized experiences and 90% indicating that they find personalization appealing. The converse is also worth mentioning: Getting the personalization wrong, or not doing it at all, may push a customer to depart for your competitor. 

Digital onboarding is becoming the preferred method of account opening for a world living in a pandemic. Creating this enhanced customer experience requires collecting and leveraging data to develop a one-on-one personalized feel. But equally important is keeping their data rock-solid safe.

Keeping Customer Data Secure

According to Steve Morgan at Cybercrime Magazine, the world will have created and stored 200 zettabytes of data by 2025 (a zettabyte is roughly 1 trillion gigabytes), which is the equivalent of every person on the planet carrying around 400 iPhones. Half of that will be stored in cloud environments. “With this exponential data growth the opportunities — for innovation, and for cybercrime — are incalculable because data is the building block of the digitized economy.”

Secure data governance is more crucial than ever. Data governance is the collection of processes that effectively manage your data, data assets, and metadata within your platform. Each data-governance policy will be customized to the organization, though many will have similar components:

  • Policy purpose. The statement of purpose describes why the policy exists and how it supports the organization’s mission or business objectives.
  • Policy scope. The scope explains who is affected by the data-governance policy.
  • Policy rules. This is the main section that outlines the rules guiding data usage and access.
  • Stakeholder roles and responsibilities. Stakeholders range from the data-governance body (such as a governance board or committee) and data owners to data stewards and data users.
  • Regular reevaluation. The security and industry ecosystem is ever-changing. It will be necessary to update these controls to account for your custom processes and needs.

You should always have processes in place to ensure that your data is accessible only by authorized users, secure from data leaks and bad actors —  but at the same time available when users need access.

Data Encryption Tools

According to Forbes, “encryption is an essential component of security, as well as for meeting compliance mandates. Legacy encryption solutions only handle data in two states — encrypted and therefore unavailable or in use and thus decrypted. This creates an opening for data to be compromised anytime it needs to be read or modified.”

Some organizations use homomorphic encryption, a method that can allow calculations on data in its encrypted state, versus having to decrypt the data beforehand. Next-level encryption, zero-knowledge proofs, and secure multiparty computing will drive a new frontier in customer data protection.

Additionally, using a trusted strategic partner to handle the connection request helps keep data protected throughout its lifecycle. This can prevent direct access to the data and can incorporate other security measures to complement your data-security processes.

Best Practices in Secure Customer Onboarding

Customers want a personalized and convenient onboarding process, at the same time that your company must vet, validate and continuously monitor customer identities and mitigate unnecessary customer friction. In their report Digital Transformation Through Data, Deloitte identified the following segments of customer data:

  • Account: Personal and transactional data, such as name and address
  • Location: Physical location, through mobile-phone location, and virtual location, through IP address
  • Browsing: Browsing habits, including what, when and where
  • Profile: Data from third parties, such as demographics and social media

Effectively, you need to know where each data type lives in order to properly secure it because often each type of customer data has a different business value and risk factor. Here are some additional security considerations:

  • Consider physical risks. Even though point-of-sale malware attacks are receding, they still represent a real risk, especially if bad actors are able to overcome chip and PIN safeguards.
  • Train team members. According to the Ponemon Institute’s 2022 Insider Threat Report, 65% of security incidents are a result of employee negligence, with insider threats growing by 38% in the retail industry over the past two years.
  • Strengthen encryption. Data in transit from one place to another (for example, from a customer’s mobile phone to your server) is open to security threats. Using strong data encryption will protect the data while it’s moving back and forth.
  • Use predictive analytics. Threat modeling, or prioritizing risks with robust, purpose-built artificial intelligence, can help mitigate fraud losses and false positives or false negatives in customer onboarding.

Tips for Implementation

Customers are increasingly impatient with seemingly shorter and shorter windows of accessibility. Your onboarding process needs to move at their speed or risk losing them to a competitor. When evaluating potential solutions, consider digital identity-verification systems like Instnt Accept™ that can verify your customers using geo location, biometrics and neural networks.

At Instnt, security and customer growth is our top priority. Try Instnt Accept™ today by requesting a free demo.

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About the Author

Instnt Inc. is a public benefit corporation on a mission to bring inclusion and instant account opening experiences for businesses and their customers through proprietary technology, artificial intelligence, open standards and a collaborative effort in the identity governance industry. With Instnt AcceptTM the first fully managed customer acceptance solution with up to $100M in annual fraud loss warranty, businesses can onboard more good customers, grow their top-line revenue, and cut their operational costs without friction or fraud losses in minutes.  Instnt AcceptTM powers various fast-growing financial institutions and credit unions.