Personal data security is inextricably linked to personal financial health. But visit any bank or credit union website, and you’d never know it. These two highly interrelated topics are relegated to completely different areas.
Helping financially healthy consumers become data-secure consumers is not only good for the customer; it’s good for the financial institution. That’s because credit unions and banks often pay a high price when stolen identities are used to perpetrate financial crimes.
It’s true financial institutions struggle to engage customers in self-protection. That’s been the case for decades. But, the industry can’t expect consumer behaviors to change if we’re unwilling to change the often siloed way of interacting with those we serve. “The way we’ve always done it” simply won’t cut it in today’s environment.
Personal data is under attack, and the attackers are, in many ways, winning. Consumers lost nearly $2 billion to fraud in 2019, according to Javelin Strategy & Research, an increase of $293 million from 2018. Imposter scams were the most reported and accounted for $667 million in losses. Indications are that the surge in digital commerce after COVID lockdowns were imposed has pushed cybercrime even higher.
Now is the time for the concepts of personal data security and personal financial health to converge in the minds of consumers. Unless financial institutions facilitate this integration, so-called “breach fatigue” and other seemingly apathetic attitudes will continue to fan the flames of hackers’ rapidly-scaling schemes.
Consumers innately value security when it comes to their money. It’s why the great majority of us choose to keep our money in a financial institution rather than a mattress. What many don’t understand, however, is that their personal data is even more valuable than cash on the black market. It can be used over and over again to perpetrate fraud. Banks and credit unions have a duty to create greater awareness around this emerging fact of modern life.
Many Tools, But Not Enough People Use Them
In recent years, financial institutions, digital banking providers and fintechs have launched innovative tools for consumers to give them a clearer line of sight into their individual financial risks. These include things like self-directed card controls and alerts and centralized views of a customer’s entire payments footprint, as with Wells Fargo’s Control Tower.
Other tools send AI-powered notifications relating to subscriptions and other recurring charges and even personalized data breach histories with recommended action steps to prevent breach-related crime (pictured below). In addition, calculators, round-up tools, gamified experiences and personalized widgets make it simpler for consumers to improve their financial condition through greater savings, spending or security awareness.
In many cases, credit unions and banks have struck deals with fintech innovators, allowing the financial institution to bring these tools right to the digital front doors of consumers. Yet, many struggle to convince consumers to enroll, turn on or opt in to the services no matter how much they stand to improve personal data security. This is a massive lost opportunity for both the consumer and the financial institution.
Something has got to change, and financial institutions have not only the resources, but the intrinsic motivation, to make it happen. Two business units are in a particularly strong position of influence: Marketing and Digital.
4 Proactive Steps Financial Institutions Can Take
Financial marketers are a credit union’s or bank’s most skilled communicators. They are the ones most capable of breathing life into the strategy of joining wealth (or the aspiration of it) and security. Two strategies marketers are uniquely qualified to execute:
Persona development. Using both primary and secondary research, marketers can pinpoint those customer personas most likely to engage in content and action related to personal data security. Our own research, for instance, shows consumers age 25-34 (Millennials) are most interested in receiving personalized risk prevention plans based on their individual breach histories. As digital natives, they are likely better able to grasp the realities of the dark web and its data-ravenous inhabitants.
Audience segmentation. It’s one thing to craft a persona, it’s quite another to identify those consumers that match up with it. Marketers have access to a growing number of analytics tools that allow them to easily segment their audiences by persona and other attributes. Once those lists are built, communicators can deliver messaging around security and wealth that is highly relevant to the life stage and day-to-day behaviors of their audience, and thus is more likely to move the needle.
Digital banking professionals, too, have a great opportunity to educate and engage more consumers in the protection of their personal data. A couple of strategies to consider:
Partner selection. With an almost overwhelming number of fintech solutions on the market today, digital banking leaders have learned to become selective. Naturally, they look for partners with cultural alignment, as well as the API (application programming interfaces) to make smooth connections. A third “must have” that heads of digital may consider adding to the list is hyper-personalization. Does the feature make customers feel seen and heard? Does it allow them to take action that results in an observable difference in their distinctive financial lives?
End-to-end experience. Data breach notices are delivered to consumers via “snail-mail” and e-mail thousands of times each year. Even the people who stay with the often lengthy communication long enough to get to the recommended action steps rarely take them. That’s because these notices consistently fail to point breach victims to the highest-priority digital protection tools.
Digital banking providers have the opportunity to communicate top new risks with each new breach victim in a way that digitally integrates recommended action steps with precise information and safety tools. This allows the customer to close the loop, feeling more confident they’ve done everything they can do to minimize their personal risk, and feeling an even stronger connection to the banking provider that empowered them to do so.
Studies continually show digital customers are the most engaged customers for a financial institution. By leveraging the daily touchpoints of digital banking apps and other tools, credit unions and banks can make self-protection against identity crimes a much more tactile and sensory, not to mention effective, experience by seamlessly connecting personal financial health and personal data security.