As more and more financial transactions take place electronically, the challenges and stakes grow. It’s no secret that over-the-air theft of data is a huge problem, but identity theft and outright breaches also represent growing risks.
Thankfully—but way too late—the U.S. government has issued regulations that will force merchants, starting in October, to use more secure terminals equipped with chip readers rather than relying on magnetic strip cards. The penalty for not having a chip and signature system in place? Merchants are on the hook for any fraud or theft.
These systems, like Apple Pay, generate one-time codes that make data theft more difficult. They cut fraud by an average of 55 to 70 percent. However, they fall short of chip and PIN technology that the Federal Reserve says is 700 percent more secure. In fact, a November 2014 study found that 82 percent of U.S. consumers support chip and PIN payment cards.
Meanwhile, telecom firm Telstra found that consumers want more robust protections. This includes voiceprint and fingerprint biometrics instead of user names and passwords.
For now, this seems like a distant dream. While some financial services firms and others have turned to Touch ID on the iPhone and other devices, these tools are mostly for convenience. They eliminate password entry at login but the password still exists. Unfortunately, passwords are the 21st century version of skeletons keys. At some point, we cannot continue to careen down the path of near total failure.
Remarkably, the Telstra study found that one in four U.S. consumers would even consider sharing their DNA with their financial institution, if it meant it would make authentication easier and their financial and personal information more secure.
Telstra also found that interest rates and ease of accessing funds used to be the most important considerations when selecting a financial institution. However, today, more than half of U.S. consumers cite the security of their finances and personal information as their top priority, together with their institutions’ reputation for security.
The bottom line for CIOs and other business leaders? Consumers increasingly gravitate toward companies that keep their data safe—or at least do everything possible to maximize security. It’s time to implement more stringent security, including voice biometrics in contact centers and in apps. Over the next decade, it’s quite likely that organizations that lag behind will find customers and revenues heading elsewhere.