Why Digital Trust Should Be a Top Priority For Banks

The pandemic hastened the transition to digital banking, a change that appears to be permanent. Today’s banks might never meet a customer in person, so establishing strong digital trust has become paramount to minimise risks and keep customers secure.

Digital trust is built on two main pillars: first, ensuring that a digital banking customer is indeed who they claim to be, and second, verifying that this person is authorised to perform the transactions they request. It’s akin to a digital handshake, where both the bank and the customer can engage in transactions confidently.

However, digital trust is reciprocal. As fraud escalates and fraudsters grow more inventive, customers seek assurance that their bank can safeguard them. If a bank detects suspicious behaviour in an account, customers expect prompt action to protect their assets.

Why Banks Must Prioritise Digital Trust

1. Fraudsters Targeting End Consumers: As banks enhance their fraud detection systems, criminals have shifted their focus to the end consumers. Exploiting moments of vulnerability, such as medical crises or global events like the pandemic, fraudsters find new victims through increasingly sophisticated scams.
2. Minimal Customer Transaction Interventions: Digital trust allows customers to transact with minimal intervention. Without this trust, banks would need to authenticate customers at multiple points, which can lead to frustration and dissatisfaction.
3. Customer Expectations of Trust: Customers believe their banks should recognise them based on their data. If they usually operate from London but suddenly make a large transaction in Brazil, banks should identify this as suspicious. Conversely, frequent, unnecessary authentication can erode trust and lead customers to feel untrusted by their banks.

Core Components of Digital Trust

To build robust digital trust, banks must focus on three key elements:

1. Device Trustworthiness: Banks need to understand the devices their customers use to access their accounts. New devices should initially be flagged, but over time, banks should monitor their usage patterns to ensure they are controlled by the actual customer.

2. Person and Network Trustworthiness: Banks can create digital profiles based on typical customer behaviour. This includes analysing login locations, network usage, and device interactions. Are customers logging in from expected locations? Are their device interactions, such as touch patterns, language settings, and usage angles, consistent with their usual behaviour? Answering these questions helps determine if the person behind the device is trustworthy.

3. Malware Detection: Banks must be vigilant for malware that can compromise a device without the owner’s knowledge. By leveraging a customer's digital profile, banks can discern whether account activity is legitimate or if it’s being manipulated by malicious software.

In today’s digital-first banking landscape, establishing strong digital trust is essential. An effective digital trust strategy must encompass all three components to ensure comprehensive security. By doing so, banks can confidently interact with trustworthy customers and build enduring trust, even without face-to-face interactions.