- BY kkaluza
One of the topmost priorities of any credit union is to keep members’ personal and financial information safe. But in the age of technological advances and constant connectedness, this isn’t always easy.
Since the EMV shift last October, card-not-present fraud has continued to grow, as has account takeover fraud. Hackers breaking into business databases has become a common concern among consumers, as some of their favorite stores have had detrimental data breaches.
Consumers are increasingly turning to online services and mobile banking, and many more are expected to begin adopting these methods in the future. While this makes banking more convenient and fast, there are some downsides.
Fact, fiction or fraud
Credit unions that offer these services should make sure that they have the correct security features in place to ensure member information stays safely out of the hands of criminals. Despite these efforts, fraud does still occur. And according to a study from Kaspersky Labs and B2B International, nearly two in five financial institutions have a difficult time determining which transactions are made by their members and which are made by fraudsters.
In addition to this problem, half of financial services organizations noted that they believe online financial fraud is going up, according to Enterprise Times. Many financial institutions are taking steps toward preventing fraud as well as making sure they can tell the difference between fraudulent and legitimate purchases. However, there is still work to be done.
About 40 percent have adopted in-house cybersecurity systems, though less than 60 percent have a dedicated anti-fraud solution. Nearly half haven’t adopted a financial fraud solution at all, or only partially adopted one. Many of those who have go through a third-party source.
Gaining and maintaining trust
As today’s consumers continue to demand increasing levels of connectedness and convenience, as well as dependable security, it is crucial that credit unions get this aspect of their business model right. Members trust and rely on their credit unions, and to know that their financial institution may not recognize a fraudulent occurrence involving their account is disheartening. Credit unions risk losing members’ trust as well as their business if they are not able to address these concerns.
“Considering the aggressive competition in today’s fierce financial services market and the extreme disruption from non-traditional providers, a trusted relationship between customers and their financial institutions is a decisive factor for the long-term prosperity of any company,” explained Ross Hogan, the global head of fraud prevention at Kaspersky, in a press release.
Hogan continued to note that all points in the value chain need to have top-notch security in place. This includes the financial institution itself, as well as any third-party companies that work with it. If even one part of the chain is compromised, any institution that is connected to it is put at risk.
To maintain members’ trust, or to earn it back after an instance of fraud, it’s important that credit unions make sure they have top-notch security systems in place, especially if they have apps or online portals that allow for mobile or online banking. These features are highly sought after among consumers, but offering them without confidence in their security isn’t the right way to bring in members.
“As the already high volume of customer demand for online transactions continues to increase, all companies (its customer-facing digital platforms, infrastructure, data, and employees) should be secure, convenient, and prepared,” Hogan stated. “It’s crucial, therefore, to use specialized fraud prevention solutions that will provide customers with the most convenient and safest service possible.”