Driven by a pressure-cooker competitive environment, shifting consumer perceptions and growing security concerns — a not-so-new opportunity in banking has re-emerged.
Identity protection has once again become an optimal opportunity in banking. As cybercrime costs the financial services sector more than any other industry, and consumers increasingly demand engaging financial wellness experiences, financial leaders are starting to take a proactive approach to both by providing targeted identity protection offerings.
While this offering has been floated within the industry for some time, the growing threats are now far too great to ignore. It’s forcing financial institutions to re-evaluate and re-invest.
I recently visited this idea in EZShield’s webinar, “The Rebirth of Identity Protection in Banking.” EZShield’s whitepaper, independently produced by Javelin Strategy & Research, took an in-depth look at the problem and the resulting opportunities for banks and credit unions. It sparked some insightful discussion and led me to further investigate the matter at hand.
(Missed the webinar? Find the key facts and figures in the “Rebirth of Identity Protection in Financial Services” whitepaper).
The State of Identity Crimes
Last year was a record-breaker in terms of identity crime. There were 79.1 million* identity crime victims in the U.S. alone — a staggering 24 percent of the population impacted by identity theft, fraud or a data breach.
These threats don’t just target consumers, but also the financial institutions themselves. Leaders are now tasked with building robust, comprehensive cybersecurity plans that include ways to isolate attacks, eliminate vulnerabilities and mitigate financial loss for both themselves and their account holders.
Why the Spike in Identity Crime?
Data has become digital, and criminals couldn’t be happier.
Today, consumers are more connected than ever. The average American spends five hours on mobile devices alone.
While their digital activities may seem harmless, individuals interact with online services (e.g. online banking profiles, shopping accounts and social media pages) – ultimately building their digital footprint. This footprint acts as a digital identity, one rich with personal information and ripe for identity thieves to pick apart.
And it’s not just consumers readily digitizing their sensitive personal details. It’s the organizations they entrust to keep their information safe. Major retailers, technology giants, government organizations and even mom-and-pop shops have come under fire for poor security that’s leading to a rise in data breaches.
Data breaches expose sensitive information like Social Security numbers and passwords. The number of data breaches tracked in 2017 topped 1,579 — exposing more than 178 million sensitive records.
Hackers are now incredibly skilled at evading an organization’s security (or lack thereof) protocols to capture the data needed to commit identity theft and fraud. It’s now safe to assume that three out of every five Americans have been a victim of a data breach. And one out of every five of these victims is ultimately the target of identity theft or fraud.
In a world where we increasingly rely on digital technologies, we are more susceptible to these types of attacks. It’s causing consumers to shift their perceptions and seek a trusted source of protection against these growing concerns.
Financial Institutions Have the Opportunity to Protect
The financial services industry sits in a unique position in this debacle. Unlike other organizations that have been unwillingly weaved into this narrative following a breach, banks and credit unions have been cast in a new light — potential protectors.
Consumers are often inundated with numerous options in a DIY approach to identity security. While they can take proactive measures to safeguard their own activities, the fate of their information is largely out of their control once it’s in the hands of an outside entity.
Consumers already look to their financial institution for financial guidance and security. It’s a natural progression to search for a more comprehensive form of protection from an already established, trusted relationship. In fact, three in five* account holders report that they trust their financial institution to keep them safe, regardless of where the threat originated from.
Analyzing the Competition: Gifted Protection
Data breach victims are often gifted complimentary services following a breach to avoid legal ramifications and rebuild goodwill with the offending organization. On the surface, it sounds impossible to compete with a free service — but that’s just a surface-level look at the story.
Only one-third of data breach victims accept these services, and only 8 percent renew this protection. These gifted options generally offer limited protection and are normally only available for one to two years, yet the data exposed is out there forever.
This lack of acceptance is a strong indication of a lack of trust. And as shown in the abysmal renewal rates, this watered-down protection leaves account holders with dangerous blind spots.
Building Better Identity Protection
Answer this call-to-action by differentiating your identity protection product from its complementary counterparts. This starts with finding the right partner who can help align trusted protection with strategic business goals and develop a program that’s right for you.
Light identity protection offerings that focus on credit monitoring and resolution leave unwanted gaps in protection. As consumers increasingly see the security of their identity tied to the security of their data, providing tools to help secure users’ everyday activities is key to building a valuable user experience.
Your program should take a full-circle approach to identity protection. This means focusing on elements of their complete identity — not just their credit score. When you deliver products that secure, monitor and restore their identities, you’ll help them streamline their personal security and further build your relationship.
This amplifies the established sense of trust and provides key opportunities to engage and ultimately better retain consumers.
Key Product Features:
- Credit Health
To provide a comprehensive look at their financial wellness
- Identity Theft Insurance
To help prevent identity theft event from derailing their goals
- Financial Transaction Monitoring
To notify consumers of suspicious activity on their accounts
- Public Records Monitoring
To catch early signs of identity theft, like a fraudulent change of address
- Engaging Fraud Education
To empower account holders and strengthen trust
- Proactive Dark Web Scanning
To detect if personal information surfaces on the dark web
- Social Media Monitoring
To add an extra layer of protection to social media accounts
- Fully-Managed Restoration Services
To provide dedicated, one-on-one support in times of need
By implementing a comprehensive identity protection program, your financial institution will be able to enhance your own cybersecurity investment while creating an enriching financial wellness experience for account holders — delivering peace of mind across-the-board.
Want to learn more? Get the latest facts and figures on this unique opportunity in banking by downloading the Rebirth of Bank-Offered Identity Protection whitepaper. You’ll see how you can pair robust identity protection products with long-term strategic insights to develop one of the most in-demand financial wellness tools to-date.
*Javelin Strategy & Research 2018