Mobile apps, online banking, P2P payments, and more are delivering the simple and fast online experiences today’s consumers desire from their financial institutions. However, many fraud detection solutions continue to undermine the customer experience, adding unnecessary friction in the quest to reduce account takeover, new account fraud, and social engineering attacks.

Forward-looking financial institutions are seeking out ways to resolve the balancing act between security and user experience. Those that do will be able to see significant growth in a competitive market. By 2023, digital businesses that have adaptive customer experiences linked to trust and risk assessments will earn 15% more revenue than those who don’t, according to Gartner.

How can financial institutions deliver the world-class experiences today’s consumers have come to expect? The answer is a solution that enables banks to treat genuine users not as criminals, but as the valued customers that they are.

Behavioral Insights Lead to Happier Consumers and Less Fraud

The appeal of behavioral biometrics is that the technology allows banks to accurately distinguish between genuine users and fraudsters based on behavioral insights, rather than traditional factors like location or device ID, which are known for high-false positives. Behavioral biometrics runs continuously in the background of sessions, using machine learning to build up user profiles. How a consumer interacts within a session differentiates them from any other potential user, including hackers and automated attacks.

All customers must do is be themselves. That’s a big improvement from current fraud detection solutions, which slow users down, cause friction, and ultimately fail at providing needed security.

Do good customers often find themselves in your high-risk lineup? Here are three ways behavioral biometrics can turn the tables.

1. Improve the onboarding experience

Current fraud controls are treating potential customers like criminals, causing a lot of friction in the account opening process, deferring applications for manual review and incurring high operational costs. Behavioral biometrics delivers better detection by understanding behavioral intent to detect illegitimate activity versus that of a legitimate applicant.

For example, patterns such as high familiarity with data is associated with genuine users, while high familiarity with the application process and online forms is associated with fraudulent behavior. Behavioral biometrics enhance onboarding by delivering fewer false rejections. This increases revenue as more new accounts and applications are accepted. Plus, when customers have a positive first experience, they are likely to continue to use a bank’s services - and even recommend them to others.

2. Stop causing frustration with false declines

There’s nothing more irritating than a false decline. Though they are meant to protect consumers, it’s still unpleasant when a bank incorrectly flags a transaction or account opening for fraud. Consumers then must go through additional steps to identify themselves via step-up authentication such as entering an out-of-band SMS passcode or making a call to customer service.  Behavioral biometrics reduces false declines by keeping an eye on user behavior, not their location or device, to assess the risk of a fraudulent session. Behavioral biometrics runs in the background and only require step-ups when the session is deemed high-risk.

3. End account takeover fraud

One of the biggest challenges of digital transformation is making users feel secure in the digital world. With nearly ten billion account credentials compromised in data breaches in just the last few years, fraud and identity theft have become all too common. Behavioral biometrics offers a new level of account takeover detection, picking up where most other fraud prevention tools leave off. The technology provides power behavioral insights gathered from real-time physical and cognitive behavior of users across digital channels. On the user level, behavioral biometrics profiles unique characteristics and compares current sessions to historical profiles to detect changes and anomalies. This behavioral analysis occurs in the background, so consumers can go about their banking activities while also being guaranteed maximum security.

For anyone tasked with managing digital channels, you know how important customer experience is. With the right tools in place, you can ensure that customer experience is prioritized, and the balance between trust and risk is properly calculated and aligned to business priorities.

Download the latest Gartner Market Guide for Online Fraud Detection to learn how behavioral biometrics, such as the solutions offered by BioCatch, are helping financial institutions and digital businesses strike that balance every day.

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