With the accelerated digitization of financial transactions, establishing digital trust is critical to solidifying and maintaining a financial institution’s integrity. Digital trust can help your organization fight and prevent fraud, as well as earn customer acceptance and loyalty.
This piece discusses digital trust within the context of digital financial activities. It also explores how digital trust affects an institution’s fraud detection and prevention efforts.
What is Digital Trust?
Tech Target defines digital trust as “the confidence users have in the ability of people, technology, and processes to create a secure digital world.” Companies receive digital trust when they have “shown their users they can provide safety, privacy, security, reliability, and data ethics with their online programs or devices.”
In today’s digital world, earning customers’ trust requires building and sustaining their confidence in a company’s integrity. Customers expect companies to provide reliable, safe, and secure services via their online channels.
When companies establish digital trust, customer acceptance follows. Customer acceptance platforms like Instnt Accept™ help businesses secure digital trust by decreasing both fraud and rejection rates while exceeding KYC and AML compliance requirements.
What Digital Trust Means for Safe and Secure Banking
Digital trust works both ways between the company and the customer. A customer must be able to trust their financial institution’s (FI) digital integrity, just as much as the FI must be able to trust their customer’s identity and online behaviors. Unfortunately, financial fraud often victimizes the FI and its customers. As a result, the accelerated digitization of financial transactions has provided fraudsters with increased opportunities to take advantage of digital vulnerabilities.
Despite these risks, customers increasingly prefer the convenience of completing financial transactions online. The recent global pandemic highlighted the immense benefits of digital banking and online transactions as much as it underscored the significant role that digital trust plays in fraud prevention.
Two key elements have placed digital trust at the forefront of fraud prevention strategy development and customer identity management:
Increased Preference For and Rapid Shift to Digital Banking
The global pandemic left multitudes of people without recourse when engaging in online banking and other financial transactions. Consequently, most financial institutions needed to quickly adapt to provide safe and secure digital banking platforms and updated online banking features to existing and new customers.
As the world eased into a new normal, the dependence on digital banking only continued to increase and normalize. From new account applications to processing payments and transfers, the task of managing customer identities, data, and activities within the digital space has played an even more significant role in fighting financial fraud.
The New Era of Instant Transactions
Now, users can complete money transfers and online payments with just a few taps on their screens. Different devices used for online banking may offer varying options for accessing online accounts and completing online transactions securely. In response to the equally rapid evolution of fraudulent behaviors in the world wide web, digital payment platforms have also developed more advanced security measures. The swiftness with which users can complete online transactions requires that the detection and prevention of fraudulent activities be the highest priority. Once funds are lost to fraudsters, the odds of recovering them are minimal.
Identity verification and customer data management via cybersecurity technologies must minimize or prevent risks to the FI and its customers. It is imperative to integrate digital trust into any fraud detection and prevention solution from the beginning, whether through customer onboarding or developing a new device or service for the digital space. Digital trust plays an integral part in overall security measures.
Solutions for Building Digital Trust
Building digital trust and developing fraud prevention strategies are not mutually inclusive. When building digital trust and preventing fraud, a company must integrate the following solutions.
Malware can come in the form of viruses, adware, spyware and browser-hijacking software. It can even surface as fake security software. These technologies penetrate a device’s privacy and security. Anti-malware technology designed to detect account takeover attempts and online session hijacking can solidify digital trust and prevent fraud.
Device Verification and Monitoring
Software tools can verify and monitor specific devices that customers commonly use to log into their accounts. When a customer uses a new device (e.g., a public computer or a “new” smartphone), the software can check if it has logged a history of suspicious activity. Most FIs now implement additional identity verification processes when a client switches to a new device.
Network Review and Monitoring
Digital solutions can track and monitor a customer’s known login access points, such as their typical networks and WiFi IP addresses. Any deviation from the norm can prompt additional authentication protocols.
Behavioral Biometrics Analysis
Behavioral biometrics analysis analyzes typical user behavior when interacting with a device, such as how a user types on the keyboard, holds their phone or touches the screen. The analysis may mark any behavioral anomaly as suspicious and subsequently prevent a user from reaching a transaction page.
Benefits of Building Digital Trust For Fraud Prevention
An effective fraud prevention strategy helps build digital trust. A reliable digital trust solution, in turn, helps improve fraud prevention efforts. Businesses should develop and implement fraud prevention strategies with digital trust in mind. Combined, these solutions deliver a more comprehensive security solution for the company and its customers.
Below are additional reasons why digital trust is key to customer acceptance:
- A successful digital trust solution produces more accurate risk alerts and fewer false positives.
- Reduced risk to customers means minimal customer friction.
- Higher confidence in the integrity of a company’s data security plays a prominent role in the company’s success.
- A complete and airtight digital trust solution helps minimize risks even as the network of connections among various establishments (including private and government) grows within the digital space.
- Prioritizing digital trust leads to improved processes when developing new services or devices that are more secure and reliable, such as improved digital technologies.
- Establishing digital trust requires an appropriate degree of transparency from a company, which will help customers make more informed decisions when choosing services.
How to Start Establishing Digital Trust and Customer Acceptance
Building digital trust leads to an enhanced online experience for customers and greater customer acceptance. A financial institution can follow these steps when implementing its digital trust solution.
- Establishing digital trust must begin at customer onboarding. The first and most crucial step is preventing risks, which means establishing adequate and effective measures to assess potential new customers and identify high-risk individuals during the onboarding stage.
- Implement personalized alerts and notifications. In addition to generic alerts and notifications, personalized warnings help build customer confidence since they serve as constant reminders that the financial institution is always on the alert for customer transactions.
- Understanding customers across multiple channels and on multiple levels is integral to establishing digital trust. A customer’s digital footprint eventually follows a pattern of online behaviors across digital channels, even when they use different devices. This pattern can help FIs create a unique and accurate customer profile. FIs can then use this profile to verify the customer’s identity whenever they engage in any digital transaction.
Dealing with customers in person remains the most effective way of verifying customer identity and facilitating legitimate transactions. Yet, the preference for more convenient digital options is here to stay. Companies must leverage available solutions to adapt to changing customer needs while ensuring they do not compromise the integrity of their services or the security and safety of their customers.
Establishing digital trust must stay front and center at every level of the transaction. A solid digital trust solution guarantees customer acceptance. Instnt Accept™ improves and simplifies your management of customer acceptance via its fully-integrated and automated AI technology. As customer acceptance solidifies, customer confidence will naturally follow.
Interested in efficiently onboarding customers without fraud loss or compliance issues? Instnt Accept™ helps businesses provide a frictionless customer experience, enabling them to quickly and securely verify, accept, and onboard more new online customers.
Request a free demo to learn how Instnt can help your organization!