Interview with The Leadership Review: It’s the responsibility of financial institutions to address their customers’ lack of safety online

We’ve all been living in a digital world for quite some time now — and that transference to the online realm has brought with it a dangerous complacency. One in three Australians fall victim to financial scams, according to RateCity, and many of these scams could be avoided by upping personal responsibility. Not sharing or reusing passwords, or leaving phones locked when not in use, are just some examples of simple steps customers can take to protect themselves online, but often don’t.

There’s a society-wide lack of vigilance and personal accountability that has accompanied the increasing shift to online living. Consider historical banking practices of banking, where going to the local branch to deal with a branch manager was the key way of conducting personal finance. A person wouldn’t have dreamt of shouting their personal details in the branch with strangers around.

And yet, through a level of ignorance about how to keep safe online, some 69% of Australians surveyed recycle their passwords across multiple online services. In digital identity theft language, this is the exact equivalent of shouting personal details in a bank branch.

The intersection of personal education and business protection

With the COVID-19 pandemic driving ever-more consumers online to conduct sensitive personal transactions like banking, insurance, or superannuation, consumers appear to be increasingly desensitised to the very real risks and costs of digital identity fraud.

Yet, in spite of this lack of personal accountability, it’s the responsibility of financial institutions (FIs) to do as much as they can to help protect their customers, even those who do nothing to help themselves. With the skyrocketing threats of cybercrime, financial statement fraud, and asset misappropriation (named by PWC as amongst the four most common frauds committed against Australian businesses), now is the time for financial institutions to engage businesses like GBG to help them protect their business interests and their customers.

In an opinion piece featured in The Leadership Review, Regional General Manager of Australia and New Zealand for GBG, Carol Chris, unpacked the dilemma faced by financial institutions in regards to taking responsibility for protecting customers against fraud.

“As the nature of scams becomes more complex and the sophistication of crime syndicates and criminals committing these scams continues to grow, traditional methods and mindsets used to combat financial crime are insufficient. Particularly since consumer behaviour is not shifting anywhere as quickly to enable their defences,” she wrote.

Chris elaborated by noting a piecemeal approach will only lead to further ineffectiveness amongst financial institutions trying to marry customer education about cyber responsibility and their own compliance requirements.

“Many FIs recognise that financial crime solutions need to be accompanied by proactive and robust approaches to compliance, KYC, AML, fraud and more...More significant spending on financial crime compliance can lead to fewer challenges during the customer acquisition process.”

Putting an end to fragmentation

Investments in one area of the varied financial crime outlets can positively impact another part of the business. GBG’s Future-proofing Fraud Prevention in Digital Channels research shows 58% of Australian FIs are treating cybersecurity, fraud control, and compliance functions in siloes — well above the 43% of Asia-Pacific FIs with the same problem.

Defragmenting these functions and implementing a genuine end-to-end approach to solutions, processes, and technology, that addresses each aspect of the financial crime journey in an integrated way, is of utmost importance. It’s this customer-centric and end-to-end capability that is at the core of the technology provided by GBG. It ensures financial crimes are not slipping through the cracks, because it holistically covers all bases and lets each business area have visibility into the other.

On the front end, a holistic, end-to-end approach to tackling identity fraud will enable a safer and more seamless customer journey for the end-user too — so FIs can rest a little easier knowing their systems and customers are both better protected.

To read the full article and browse The Leadership Review, visit https://theleadershipreview.co/magazines/ignorant-by-choice/  

To read the full article, click here

To read the full GBG report, “Future-proofing fraud prevention in digital channels: APAC Banking & Finance Study,” visit https://www.gbgplc.com/apac/future-proofing-fraud-prevention-in-digital-channels/

To find out more about GBG’s end-to-end digital identity verification solution, visit

www.gbg-greenid.com

To find out more about GBG’s end-to-end suite of fraud and compliance management products, visit https://www.gbgplc.com/apac/solutions/fraud-compliance-management/