Identity Theft not just a problem for FIs…it's an opportunity

Consumers' online behavior is increasingly exploited by hackers, costing FIs billions in annual fraud losses and account churn. However, this also offers FIs a great opportunity to deepen client relationships via targeted online engagement that also reduces identity fraud.

As we discussed in our post on the True Cost of Financial Identity Theft, customers often move their accounts to another FI after being victimized because they have lost confidence in their FI's ability to protect their money. A small minority of customers have their confidence restored by their FI's response, and don't move their accounts.

The results from Covered Security's Annual Survey of US Consumers illuminate how FIs can increase their clients' confidence (reducing account churn), and reduce the likelihood of identity fraud happening in the first place.

Consumers are worried and FIs are in the best position to help

We are now nearly a decade after the Target, Home Depot and Equifax breaches jump started the Identity Theft Era. The number of breaches continues to increase. The number of phishing emails continues to increase. Identity Theft and online fraud continue to increase.

Instead of being desensitized to this “new normal,” consumers are concerned. In Covered's survey, 59% of consumers reported that they had a high/very high level of concern about identity theft and over 50% report that their concern is growing. And they need help.

Nearly 50% of consumers report that they have little confidence in their ability to avoid identity theft and other online security issues. And FIs are positioned to help them. Covered's survey shows that Financial Institutions are by far the most trusted by consumers to help them.

Engaging clients to build trust and reduce Identity Theft

Some retail banks and wealth advisors have begun to grab this opportunity, sending out online security education to clients, offering identity restoration services, and holding security webinars. Unfortunately these services only engage clients intermittently, and education only motivates 2% of clients to engage and take any action at all to reduce the possibility of fraud.

The acceptance of engaging consumer wellness apps such as Fitbit and rewards apps such as Honey, make it possible for FIs to go further to engage clients, build trust, and reduce fraud. Covered has leveraged these consumer app models to enable FIs to build deeper digital relationships and grow their trusted advisor position with clients via targeted online engagement that also reduces identity fraud.

With Covered, FI's can drive new client habits on and off their online platform to eliminate online identity theft - including adopting multi-factor authentication, password managers, and transaction alerts. Warning consumers immediately when companies they use have had security incidents, providing and automating simple steps to remediate breaches, warning consumers when they're being scammed, and more.

With Covered, FIs can motivate their customers to adopt stronger security habits online that prevent and limit damage from identity theft - reducing fraud and account churn. They have a new and differentiated digital channel to engage their clients, and expand their trusted advisor position. And they can gain behavioral intelligence (while clients retain control of their personal info), to better serve their clients and increase revenue.