With Capitec’s latest trading update making a case for what consumers in emerging markets want – and need – the time for “one-size-fits-all” banking looks set to be over. As the bank continues attracting up to 150 000 new customers each month, it’s redefining the “typical banking experience”. Marwan Elnakat, Digital Banking Solutions Director for the CISMEA region at Gemalto, argues that a similar evolution is underway in the digital banking space. While banks have responded well for the most part, offering new digital services such as mobile apps and online portals, next generation users are already demanding a move away from a “one-size-fits-all” approach to digital banking.
As the rise of smartphones and other mobile devices continues to transform the banking experience, customers expect to be able to log in, check their balance and make payments instantly on multiple platforms, wherever they are. Fintech start-ups and global trends in banking regulations continue to affect this space however – highlighting the customer experience as an increasingly important differential. “Personalisation is the secret to developing an engaging and easily navigable customer experience,” notes Elnakat. “This starts with ensuring a secure, convenient digital banking journey.”
The latest statistics support this. With 73% of South Africans able to use eBanking services either online or on a mobile app, only 62% are actually doing so according to Gemalto’s 2016 eBanking Survey. “Just 36% of eBanking users have access to two-factor authentication – despite 78% of survey respondents being concerned about data breaches in the transactional process and a growing appetite for biometric authentication. This number is telling as it gives banks a positive means to respond,” says Elnakat.
With security preferences pointing to the need for a customer journey based on individual characteristics, new risk assessment platforms could be the answer. Using machine-learning technologies, they can establish the most accurate risk scoring to trigger the most appropriate authentication measure – fundamentally changing “protection” as we know it.
“Machine-learning now means banks can combine everything from geo-localisation to device profiling and behavioural biometrics to monitor data from the user and their device to offer convenient and robust protection based on adaptive security measures. If any unusual patterns are picked up, another authentication layer is immediately requested.”
Elnakat uses the example of a customer purchasing lunch at his favourite restaurant in Johannesburg when suddenly – randomly – an ecommerce transaction is made in his name from a different country. “The system will immediately recognise the unusual purchase made from a new device, using an IP address from a different geographical location. It will then prompt the user to provide additional verification on his mobile device, perhaps through a fingerprint scan for instance.”
This kind of solution offers benefits for both consumers and banks. “In the case of financial institutions, it allows them to cut operational and administrative costs, as it picks up unusual purchasing patterns instantly. No human involvement is required and the bank gets detailed information about the potential fraud.” The solution also improves risk management processes because of its multiple layers of assessment including device, location and user behaviour.
Consumers on the other hand now enjoy an effective security solution that doesn’t jeopardise the seamless banking experience they have come to expect. They also benefit from a personalised authentication journey, with the number of verification steps changing depending on the type of transaction and their profile. “This adds to the overall experience.”
Convenience remains a non-negotiable however. “Multi-layered security can’t detract from the customer experience or prevent personalisation. For a solution to be best-in-class, the digital experience must be frictionless – but come equipped with sophisticated security mechanisms built around each individual customer.”
With emerging markets in Africa eager technology-adopters, Elnakat notes that banks have a real opportunity to provide the very latest solutions – after listening to what their customers want. “As players like Capitec continue challenging assumptions and ‘traditional market approaches’, they’re opening the door for next generation banking offerings that are both secure and convenient. This makes it an exciting time for current and future banking clients both in the country and on the continent,” says Elnakat.
By Marwan Elnakat, Digital Banking Solutions Director for the CISMEA region at Gemalto