At the Digital Strategy Summit this week, a strategy manager for a commercial bank said it best: they have almost no fraud because they have made it almost impossible for anyone to get through, yet they know they have to do something to improve the experience, if they want to be competitive going forward.

This was not an isolated conversation. Banks are undergoing rapid digital transformation, looking for ways to deliver more functionality online and on the mobile platform while maintaining brand equity, security and maximum convenience.  As Melissa Stevens, Digital Strategy Officer said during her presentation at the conference, banks today are selling experience. This is not an easy thing to deliver in the face of so many technology trends upending the way customers want to interact online and the need to balance the inherent security risks and compliance requirements. In fact, a recent banking study concluded that most banks fail to capitalize on their investments in digital marketing and digital channels, resulting in 70%-90% abandonment rates when potential customers try to open an online account.

Eliminating the trade-off between fraud and friction

Biometrics are often touted as providing security and convenience. And this is true – at the time of login, it may be easier and more secure to present a fingerprint or a selfie, but if asked to do this repeatedly during an online banking session, the average consumer would recoil.

Enter behavioral biometrics. Behavioral biometrics analyze the way people interact with online applications and devices. The technology is not reliant on what you have or what you know, like tokens and SMS codes. Nor is it reliant on static parameters like physical biometrics. Rather, the technology is reliant on ways in which a user does things online through innate behavioral attributes and cognitive choices. The technology runs in the background, allowing a user to do what they normally do in the context and in the order in which they normally do it, without prompting or interrupting for a certain action to be taken to authenticate them. Risk scores are fed into risk engines and case management systems in real time, thereby stopping fraud and allowing for escalations in defined cases.

By managing fraud and friction seamlessly, digital strategists and product managers for online banking products can deliver the experience that consumers are looking for and drive more functionality to the digital channel. Given that it costs $4 for a call center to handle an escalation, never mind the cost of actual fraud losses and the intangible trust factor with the customer, solving this riddle can translate into tremendous ROI, especially as consumers become increasingly comfortable with digital technologies. Technologies like behavioral biometrics make it easier for digital strategists and online banking product managers to design an experience that balances the trade-off.

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