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Can Intelligent Authentication Technology Help Financial Institutions Tackle Fraud?

Can Intelligent Authentication Technology Help Financial Institutions Tackle Fraud?

Identity theft and cyber crime are never going away.

Implementing a strong authentication strategy is crucial as data security becomes one of the top priorities in the digital age. There has always been a focus on security protocols in the financial industry, but with advances in technology, many institutions are finding that fraud is still on the rise as criminals find new ways to extract sensitive data. And with regulations like Europe’s Payment Services Directive 2 (PSD2) taking effect, security has taken even more of a center stage. Now, artificial intelligence technologies are emerging and providing new ways for authenticating users and protecting client information.

Like in many other industries, AI can offer financial institutions a wide variety of digital solutions when it comes to authentication. From preventing identity theft to biometric authentication, AI brings speed and even greater accuracy to the authentication sphere. Intelligent authentication services could very well revolutionize the security of finance apps and institutions through analyzing transaction data in real time to catch any discrepancies that indicate identity theft and other fraudulent transactions.

Protecting the assets and identities of customers is more important than ever and a majority of customers are using mobile apps to complete transactions.

So, what is intelligent authentication anyway?

The use of AI in finance has many applications, including customer service and other automated banking services. For example, a chatbot is a popular form of AI that can be available to answer questions, guide customers through opening accounts, and generally provide financial assistance twenty-four hours a day, even when the banks are closed, without requiring the use of a bunch of costly resources.

Automation can be used in many ways to enhance the finance industry, but building an effective fraud protection infrastructure is one of the most useful applications of machine learning for banks. The old days of usernames and passwords are coming to an end replaced by certificate-based authentication methods. But there will surely be more changes around the corner as intelligent authentication takes the stage.

So, what is intelligent authentication anyway? The next step in cybersecurity involves a new take on traditional authentication protocols. Intelligent authentication gives consumers and employees more sign-in options, such as biometrics and push notifications while taking advantage of digital records like location, IP address, and operating system, and even behavioral login patterns to provide a more personalized and secure authentication process.

With an increase in mobile banking apps and other forms of fintech, criminals are becoming more adept at cracking the authentication process. But this rise in crime hasn’t stopped people from regularly using financial apps to move money, make payments, and open accounts.

With so many people using mobile devices to access and store personal data, consumers are a bit jaded when it comes to vigilant data protection. Customers are aware that they must be careful with their personal information and who they share their sensitive data with, but for the most part lack the knowledge of how to keep their information safe from cybercriminals.

This is both a challenging aspect and an opportunity for financial service companies. The challenge lies in creating technology that is accessible to customers but that also protects them from fraud without being too intensive. This is an opportunity to be at the forefront of fintech and meet rigorous regulatory requirements while better protecting customer assets.

Identity management tools boost security for financial institutions

Digital identity management technology organizes and manages digital identities and access protocols. These tools can also be used to manage customer-facing technology using similar Public Key Infrastructure (PKI) and zero-trust security concepts. Even the use of digital signatures should be considered part of secure PKI-based infrastructure.

IT managers can manage the access of users within an organization based on necessity and their clearance level. For example, a bank teller doesn’t need the same access to company data as the branch manager. They serve different functions, and have different access needs to complete their daily tasks and duties.

Service providers like GlobalSign can boost security for financial institutions by providing the digital certificates they need, in a user-friendly and easy-to-manage system.

Effectively implementing intelligent authentication protocols

With the strong majority of Americans valuing the convenience that fintech brings to banking over privacy, it is more important than ever that banking firms do their part to protect consumers from identity theft and financial fraud.

But before considering an AI-driven authentication protocol, financial firms must take into account its current infrastructure capabilities, and whether or not it has the resources to provide biometric and behavioral solutions. (And whether or not those systems are in accordance with any local and federal regulations and requirements).

It’s also important to make sure that encryption protocols (such as through your VPN) are in place and kept up to date. The deployment strategy that a financial institution uses is ultimately just as important as the additional security concepts they put in place.

Conclusion

Implementing an intelligent authentication solution may very well be the future of helping financial firms improve customer satisfaction through streamlined access and security. As we continue through 2021 and onward, machine learning, cloud computing, and analytics will all play a major role in reducing human error in many industries, including banking.

Using AI to combat cybercriminals and make apps a safer place to complete transactions and open bank accounts could revolutionize the banking industry. But in the meantime, there are plenty of strong authentication solutions that will both protect customers and protect your business from hefty fines and costly security incidents.

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