In Response to Growing Fraud Risks, Consumer Education is Key

Responding to increasing fraud attacks targeting individuals, there have been ongoing calls for enhanced consumer education. Many financial institutions have integrated security centers into their mobile banking apps with the goal of informing customers about the latest threats.

This initiative, while positive, still has room for improvement according to Lea Nonninger, a Digital Banking Analyst at Javelin Strategy & Research. Her report, titled Security Centers in Digital Banking: How to Tell an Empowering Story of Prevention, Detection, and Resolution, highlights that these security centers could better empower customers.

Shift Towards Customer Empowerment

In the past, financial institutions largely handled security matters behind the scenes. The prevailing view was that constant updates about potential threats would only worry customers unnecessarily.

“Over the last five years, we’ve seen banks shift their narrative to focus on providing tools for customers to improve their own security because customers often are a weak link,” Nonninger said. “There are many things customers aren’t doing to protect their accounts and many security measures they might not know about.”

With more institutions recognizing the importance of involving consumers in security, there should now be an increased emphasis on including education within these centers. This can increase customer confidence in identifying and addressing fraud, ultimately leading to a more satisfying banking relationship.

Create a security center is just one part of a comprehensive fraud protection plan—barring further measures, it will remain largely ineffective.

“Do they truly help to empower the customer?” Nonninger queried. “One major aspect we discuss in digital banking is not only security but also security empowerment. It’s about more than just being secure; ensuring customers feel confident and know how to improve their own security.”

Evaluating Security Centers’ Effectiveness

The Javelin report examined three key areas: prevention, detection, and resolution. Despite the widespread presence of security centers among banks, it became apparent that significant improvements are needed.

“We assessed various features to gauge their availability across different banks and quickly identified a drop in support for comprehensive suites of features,” Nonninger noted. “While many banks have security centers, few offer all necessary features to prevent fraud from occurring.”

“If customers can’t detect or resolve potential issues effectively, the value of these centers is diminished,” she continued.

Prevention efforts should focus on keeping customers informed about emerging attacks. For instance, phishing emails that impersonate well-known brands or government agencies are designed to trick users into making mistakes. A dedicated section within a security center could provide valuable information on identifying such attacks. However, the report found that these centers often lack relevant articles and interactive media tailored for user engagement.

Moreover, organizing information in security centers can be confusing; customers may find themselves navigating through numerous menus or reviewing lists of items, which might deter deeper exploration.

The Future of Fraud Detection

To effectively detect fraud, consumers need to understand how to monitor account access and transaction movements. Alerts play a significant role by notifying users about any activity outside their norm. The report underscores the importance of providing tools that enable customers to resolve fraud through an end-to-end digital solution, something currently lacking in most institutions.

“It is crucial to offer integrated features for resolving fraud digitally,” Nonninger stated. “Unfortunately, we observed this gap at all banks and it’s particularly concerning as many customers will need a seamless path to address any detected issues.”

Centralizing Educational Materials

Another opportunity lies in centralizing educational content so that it is readily available within the security center. If customers have to leave the security center to find relevant information, they might avoid revisiting it.

“Everything should be centralized because if a customer heads to the security center expecting answers and doesn’t find what they’re looking for, they may not return,” Nonninger explained. “The focus is on creating a cohesive story around security features without overwhelming customers with too much information.”

Despite these challenges, significant progress has been made in consumer education.

“For me, this report confirmed that we are moving in the right direction as banks recognize the importance of empowering their customers,” Nonninger said. “Now it’s about fine-tuning the security center to ensure it includes all essential parts while also avoiding overwhelming customers.”