The Modular Future

February 8, 2016

Digital platforms are radically altering the industry’s value chain

The Growing Pains of Business Ownership

February 4, 2016
/   Insights

This article by Stefanie O’Connell first appeared on stefanieoconnell.com in November 2015. Confession – I’ve made a major mistake in growing my business. Though my earnings have climbed exponentially over the past two years, I found...

The benefits and challenges of the Internet of Things

February 3, 2016
/   Insights

The convergence of operations technology and information technology presents new and expanding market opportunities. The “Internet of Things” is a center point of this convergence. IoT can bring remarkable benefits to today’s ever-changing business...

Mobile Banking Surprises Yet to Come

It had to happen, and apparently it has: In the year just passed, according to the new report “2015 Mobile Banking, Smartphone, and Tablet Forecast” from Javelin Strategy & Research, 30% of customers used...

Cause and Effect: If you build it, will they come?

July 23, 2014
/   Spotlight

Many financial institutions assume that digital banking is lucrative because the most valuable customers happen to bank online. While there is certainly a correlation between online bankers and higher profitability, quantitative evidence suggests that...

Intuit 2020 Report: The Future of Financial Services

April 11, 2011
/   Insights

Today, Intuit released the latest edition of the Intuit 2020 report, Intuit 2020 Report: The Future of Financial Services, which identifies and examines four key trend areas that will  transform the financial services industry...

Fast Facts: Student Loans

January 22, 2013
/   Insights

The Financial Services Roundtable recently released another iteration of its Fast Facts, reliable, bullet-point research about issues facing the financial services industry. Topics span TARP, Dodd-Frank, insurance, lending, retirement savings and more.  Below are some updated Fast...

The Top 10 Trends in the Digital Banking Industry

December 18, 2013
/   Spotlight

2014 is rapidly approaching and as the year wraps, the Digital Insight team has pulled together the top 10 trends in the digital banking industry based on data and trends from studying financial institutions....

Making Banking Fun: Gamification in Financial Services

August 5, 2013
/   Insights

Recently, the Banking.com team sat in on American Banker’s webinar, “Gamification in Financial Services: Five Proven Ways to Get an Edge,” which shared how leading brands in financial services have applied gamification to reach...

Technology M&As: The Beats Go On

May 29, 2014
/   Insights

The ongoing fascination with Apple’s $3 billion purchase of Beats Electronics is entirely understandable, because it’s a cool story. However, it also says a lot about what’s going on between finance and tech.

What We’re Reading

May 5, 2011
/   Spotlight

Below are interesting stories the Banking.com staff has been reading over the past week. What have you been reading? Let us know in the comments section below. Virtual Banking Worlds Provide Tangible Lessons American...

Small Business: Perception vs. Reality

November 21, 2012
/   Insights

In the most recent election cycle, like most others before it, the one sector of the economy that got the most attention was small business.  This is the future, we were told by every...

What We’re Reading: Thanksgiving Edition

November 22, 2012
/   Spotlight

Below are interesting stories the Banking.com staff has been reading over the past week. What have you been reading? Let us know in the comments section below or Tweet @bankingdotcom. Mobile Thursday? Plans for Thanksgiving...

The rise of alternative payment platforms is posing a sizeable risk to traditional financial institutions. But before banks bemoan the fact that they’re losing revenue to new market entrants, they ought to consider why consumers are going elsewhere. While banks haven’t exactly carved a great name for themselves post-crisis, it seems consumers still resolutely trust them to handle their payments.

The latest survey from the American Bankers Association shows three-quarters of US consumers trust banks most to keep their payments safe. On the other hand, just one per cent of consumers trust major retailers or telecom companies to protect their payments.

Given the high profile data breaches at some of the largest US stores in 2014, it’s hardly surprising. But is it any more remarkable that banks are seen as such trusted institutions?

“It’s no surprise that consumers trust banks the most with their payments,” says Doug Johnson, ABA’s senior vice president of payments and cybersecurity policy. “Banks have a long history of protecting their customers’ money whether in the vault or online. Banks are the gold standard in security and customers know their money is safe when it’s with the bank.”

In terms of the payments industry, it’s interesting that the proportion that trusts a non-bank payment provider such as PayPal or Venmo has fallen from eight per cent in 2014 to four per cent this year.

UK data

Figures from the UK indicate that there is big progress being made and banks are rightly trusted. According to Financial Fraud Action (FFA) UK, banks prevented £7 in every £10 of attempted fraud. It said: “Banks’ and card companies’ security systems detected and prevented a total of £910.9 million worth of attempted card, online and telephone banking and cheque fraud.”

It’s a good job they do, too. A study from TSYS found that while consumers are more likely to blame a retailer if their card details are compromised, they expect the bank to fix the problem. With added trust comes added responsibility.

Mixed picture for security

What the survey masks are the occasionally wide differences between the performance of individual banks. While lots are undoubtedly making great strides, others are struggling to improve security. Card fraud management systems are often older than core banking systems. For example, CEB TowerGroup found 40 per cent of the banks it surveyed said solutions were installed prior to 2006.

“Best-in-class players, however, constantly evolve their offerings to adapt to change; some provide comprehensive turnkey solutions, while others might require the purchase of additional modules,” the firm said in its report.

“Although machine learning is certainly a strong aspect, an effective operation will also have trained staff to make command decisions, test parameters, and design expert rules.”

Security and fraud prevention is a battle never won. Consumers may trust banks but it’s a constant fight and banks are on the frontline.

“Banks use sophisticated security systems to protect their customers, stopping over two-thirds of fraud from occurring. However, the industry is never complacent and banks are continuously improving the tools they use to beat the evolving threat of fraud,” commented FFA UK director Katy Worobec.

For now, consumers trust banks the most, but with the rise of new market entrants banks cannot afford to stop investing in fraud prevention systems.

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Compelling voices and contributed content from around the web

James W. Gabberty

Gabberty is a professor of information systems at Pace University in New York City. An alumnus of the Massachusetts Institute of Technology and New York University Polytechnic Institute, he has served as an expert witness in telecommunication and information security at the federal and state levels and holds numerous certifications from SANS & ISACA.

Zachary Ehrlich

25-year-old writer, and as a native San Franciscan, I am unreasonably loyal to Bank of America, if only for their superhero-like origin story, involving the 1906 earthquake and Italian fruit vendors.

Marisa Mann

Marisa Mann brings over 15 years of experience in consulting and financial services industries to the Solstice team, working on large scale enterprise initiatives across many technologies, including specializing in the digital space – Internet and mobile. Mann is passionate about mobile and the endless possibilities for the enterprise, delivering business value through strong brand recognition and driving to excellence in the consumer experience. Prior to Solstice, Mann worked at JP Morgan Chase, Diamond Management and Technology Consultants, Washington Mutual, Inc, and Accenture.

Brad Strothkamp

http://www.forrester.com/rb/analyst/brad_strothkamp