Retail banking: Safety first drives loyalty and retention
While there is a clear necessity for banks to secure and protect their environment from a reputational and operational risk perspective, there is also an opportunity to enhance customer retention and even attract new customers concerned about the privacy and safety of their finances.
The revelation that “IT leaders at the largest retail banks rate keeping funds and data safe as a top priority” from our Retail Banking Report ‘Turn to Face the Change’ was, perhaps, one of the least surprising. But, when combined with the fact that more than 75% of consumers agreed that security is a high priority when choosing a banking or financial services provider, it takes on a more dynamic perspective.
Hacktivists, criminal organisations, and governments are the most likely culprits for a wide range of data extraction, scams or siphoning money. But, a substantial proportion of breaches begin from within the organisation.
While perimeter controls are essential, shoring-up internal vulnerabilities should not be ignored. Imminent GDPR rules will mean potentially record penalties for data privacy breaches, so efficient internal processes, data processing and automation, and privacy awareness will be key.
Increased use of third party suppliers, cloud services and workforce working habits add to the pressure of new regulatory demands such as Open Banking (under PSD2). The result is a challenging task for retail banking IT teams to implement controls to protect an organisation.
However, for security prevention to be truly effective, security needs to break traditional boundaries and be embedded throughout an organisation and beyond to partners and suppliers.
Peru Consulting breaks this process into the following areas:
Whatever approach is taken, a new way of thinking about retail banking security is needed: a cultural shift across all aspects of the organisation. The retail banking sector not only has a duty of care for money itself, but also for customer data. This has to be balanced with delivering engaging customer experiences but, implemented effectively, security will help attract and retain customers through loyalty to, and dependability on, the brand.
As one of Peru’s Principal Consultants, Elliot Daly is a strategic technology professional with 20 years’ experience covering IT strategy, architecture, digital transformation, software engineering and enterprise application sourcing mainly in professional services environments.
He was formerly Chief Architect at Control Risks, a world class political, security and terrorism analyst organisation which provides research into business operational risks globally to security directors and others.