How to balance millennial expectations with data security

Digital disruption is sweeping through the finance and banking sectors. Drew Kelton explains why there needs to more stringent risk management and what is being done.

Millennials are the new powerbrokers; shaking up brands and forcing them into new ways of communicating and servicing their consumers.

They expect things on their terms and if they don’t have the experience they expect, they won’t hesitate to turn their allegiance elsewhere. Millennials do not value brand loyalty in the same way as baby boomers. If their service providers are not adapting to suit their needs, they will shop around for a provider who does.

This tsunami of change is ripping through the once traditional banking and finance sector as they have no choice but to digitally disrupt or be overrun by the emergent technology players such as Nimble and Service One.  These new kids on the block are gaining significant market share and fast becoming the new media darlings.

How are the big banks reacting? By driving their own digital disruption agendas to reimagine how they service their customers. One of the most recent examples of this would be CommBank’s mobile app. In the last 12 months alone the app has processed $100 billion transactions and helped to revamp the bank’s reputation as a digital leader.

Innovation and risk: unlikely bedfellows
The good news is that our banking and finance industry is the second most trusted sector by Australian consumers after government, according to a recent Deloitte Australian Privacy Index. However the pace of digital disruption sweeping through means it cannot afford to rest on its laurels.

Information is now a currency in itself and the fact that it can be accessed across multiple digital channels means there is a need for more stringent risk management. You may not realise it, but every single transaction comes encrypted with personal information. If personal data gets into the wrong hands, an individual could be at risk of a phishing attack. Financial providers have a responsibility to reassure their internal and external stakeholders that their communication transactions offer the highest security available.

Another key risk management consideration for the sector is the Australian Privacy Act. By law companies are required to notify the Privacy Commissioner if they accidentally leak any personal data. Worryingly, the Privacy Commissioner Timothy Pilgrim recently said *more than half of all major Australian companies including the Big Four banks have failed to comply with privacy rules since the law was revamped.

Data security is even more important when we consider innovation within the sector. Although new digital players offer new opportunities and champion efficient consumer interactions, they must at the same time ensure those interactions are as safe as what the traditional players offer. If a financial provider doesn’t provide a trusted service customers will go elsewhere.

The balancing act
By nature, millennials think digitally and expect to be served via digital platforms which aren’t weighed down with manual processes. They want quick instant access and the balance between expectation and protection is a delicate one. Building in strong security measures that are user friendly and intuitive can help bring a banking organisation into the new age whilst safeguarding sensitive personal data.

Transforming traditional paper-based operations is a great starting point for banking organisations. With smartphone penetration of 65 per cent in Australia and a population of 5.4 million young people (aged 18 – 34) in Australia, strategic initiatives to go paperless and service customers through preferred devices like mobiles can strive to connect brands even closer to the customer. One of the best and guaranteed ways to manage customer information is through an established cloud technology provider which has a track record and a global reputation in security.

Digital transactions transform
All banking and finance customers whether it be commercial, small business or individual want to interact with their institutions in a way that is personal to them. DocuSign eSignatures offer bank grade security and operations. Each electronic signature is unique, documentable, encrypted, and tamper-evident. This guarantees the confidentiality of all transactions and provides multi-faceted verification of signing events.

CommBank is utilising eSignatures with their customers to increase the turnaround time on contracts for their customers. Customer authorisation can be made via eSignatures’ “on the glass”—which means through a mobile app, signed documents can be returned via email. From sales outreach to customer service, billing and automating critical processes, eSignatures provide opportunities for financial organisations to increase efficiencies reduce costs and streamline their operations. Above all, it helps lead to happy loyal customers.

With digital disruption comes opportunity. The financial services sector as we know it will continue to change dramatically in years to come as companies adapt their business models to suit millennials and generations after that.

Using a digital transaction management system to secure transactions can help banks and financial institutions streamline, secure their transactions and meet the expectations of this growing customer base.