I recently attended FST Media’s Technology & Innovation – the Future of Banking & Financial Services Conference in Sydney. This year one of the topics that stood out to me was the rapidly increasing concerns around privacy in an innovating, digitising banking & financial services sector. The subject of debate is personalisation vs. privacy.
Vaughn Richtor from ING kicked off the conference by reminding us how predictions are not always accurate but nonetheless quite a few did come true. One that certainly did is the shift in power: Customers are now in control because they are informed. They get information from various sources, and peer opinions and recommendations have significant influences on decisions. Customers are also willing to adopt new technology.
People want personalisation but they want privacy. This is a challenging balance. Big data, predictive analytics, wearable devices, near field communication, all of those provide remarkable and powerful way to know the customers better and provide unique, personalised experiences, but it is a fine line, and a grey area that can easily become a creepy invasion of privacy and a security risk. One of my concerns still remains in regards to the use of wearables to monitor someone’s physical activity level in order to earn insurance premium discount for example. While I can appreciate the benefits for some, at which point does the discount for one person becomes a penalty premium for another?
With all this personal information captured, stored, analysed and used, financial institutions are amongst hackers’ biggest targets and victims of security breaches. So they would have been both relieved and concerned to hear from Rocky Scopelliti that trust matters, and it probably matters now more than ever. The most trusted organisations with personal information still remain a bank or financial institution. Rocky also noted that the trust model with Gen X and Y had shifted from having to prove who we are to being recognised for who we are. Mobile identity is a critical and complex topic.
There have been already far too many published cases of high profile data breaches, identity stolen and personal information released out of online sites. According to Telstra’s research[i], less than half of the consumers are happy with their bank’s security and more than a third have been victims of identity theft; 40% of those victims blamed the institution and 65% of them are likely to defect because of it. These are alarming figures. I would be the first to admit and complain about the challenges of remembering and managing dozens of login names, passwords and pin numbers. No wonder people revert to writing them down, or using the same credentials across different sites etc. One of my pet hate is still to receive a call from my bank and then hearing the agent ask ME to prove my identity; (funnily enough HP’s Michelle Cox had the same complaint!).
Nowadays being online isn’t an accomplishment; omni-channels and digitisation are now a given and mobility is critical, the mobile phone is the bank. The omni-present customer engagement model is the new norm.