Banking on Millennials – How to Balance Security and Convenience in the Digital Era
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Millennials present a unique challenge for financial institutions when it comes to cyber security. The need for constant connectivity, the tendency to overshare online and the sheer volume of sites where they must create passwords, means they are more at risk than previous generations. How will you balance the security they need with the digital convenience they crave?
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Banking on Millennials – How to Balance Security and Convenience in the Digital Era
- 1. Banking on Millennials: Noah Thomas Marketing Manager info@easysol.net How to Balance Security and Convenience in the Digital Era
- 2. AGENDA • Your future customers are Millennials, how will you connect? • How do Millennials prefer to bank and buy? • Millennials often put digital convenience over security • Security must be in the core of your digital channels as a business enabler
- 5. “Cell-phones are possibly the biggest non-drug addiction of the 21st century…” Nomophobic
- 6. Source: http://www.usatoday.com/story/money/personalfinance/2014/09/27/millennials-love-smartphones-mobile-study/16192777/ Multitasking on more than one device
- 10. Banking is at the highest risk of disruption
- 12. “I want a bank where absolutely everything can happen through my phone. I want a concentrated set of services designed just for me, and not a menu with more than fifty options for services that aren’t even relevant.” http://techcrunch.com/2015/05/30/millennial-banks/#.hadsrw0:6D2j
- 13. Real-time mobile access to personal financial information is a baseline expectation among millennials today -eMarketer http://www.emarketer.com/Article/Millennials-Embrace-Mobile-Banking/1012871
- 15. Threats Targeting Mobile Devices • Rogue Apps • Unsafe Wifi • Operating System Vulnerabilities • Jailbroken Devices • SMishing • Phishing
- 16. Millennials expect banks to do more about security
- 17. Balancing Security & Convenience Reduce customer friction, best security features are ones the end user doesn’t see or experience
- 18. Take a proactive approach to understand & mitigate threats
- 19. Authentication • Leverage technologies like push notification, biometrics (voice, facial) • Mobile SDKs for apps • Authentication based on risk to reduce friction
- 20. Biometrics
- 21. Real-time visibility and safe browsing key to trust Data intelligence out of the device • Jailbroken/Rooted • Malicious apps • Geolocation • DeviceID Assume all devices are infected with malware Increase ability to decision • Require further authentication • Secure transactions from compromised devices
- 22. Understand your users Understand and map the customer journey Create dynamic models comparing login and transaction data with the typical user behavior Completely transparent
- 23. • Mobile bankers generate 72% more revenue than branch-only customers • Average cost per mobile transaction is $0.10, compared to $4.25 for in-person branch transactions • Branch-only customers more than 2x more likely to leave a financial institution than mobile customers • Mobile users hold on average 2.3 products at a bank, compared to 1.3 for branch-only customers Digital Channels are Win-Win
- 24. Review: • Your future customers are Millennials, who will demand more digital offerings • Evaluate your current digital channels, are you connecting and engaging with Millennials? • Silicon Valley is coming, can your digital channels compete? • Millennials are the most at risk generation online, does your security posture account for this?
- 25. Key Takeaways: • Implement proactive brand monitoring to stop attacks before customers are impacted • Make authentication user friendly, less friction • Secure transactions from compromised devices • Monitor behavior, identify typical log-in and transactions
- 26. Thank You! – Questions? Noah Thomas Marketing Manager info@easysol.net
- 27. Other Sources: • https://www.firstdata.com/en_us/all-features/millennials.html • http://www.infosecurity-magazine.com/news/millennials-are-cyberslackers/ • http://newsroom.transunion.com/cyber-slackers-millennials-lax-with-cyber- security • http://www.gobankingrates.com/banking/how-bank-adapting-millennial- banking-habits/
Editor's Notes
- In today’s webinar we will be looking at Millennials, and more specifically how the digital preferences of Millennials have changed the way businesses must address this emerging market. In particular, due to the emphasis of convenience over security within this demographic, we will discuss how to security has to be at the core of your digital channels. In achieving this, you can actually leverage security as an aspect of winning new business.
- Your future customers are Millennials. A millennial is generally defined as someone born between 1981 and 2005, give or take a few years. Here are some informative statistics with regards to Millennials in the U.S. What really stands out here is that the liquid assets of Millennials is soon going to triple what it was in 2014 to nearly $7 trillion dollars. This represents a massive amount of spending power and influence on the world economy. We are fast approaching Millennials peak earning age, and so there is a lot of business that can be won – if you can speak and connect with this demographic.
- What we really want to discuss is first, how will you connect with Millennials? Millennials and smartphones go hand in hand, and Millennials would rather communicate over digital channels. They also do not want to hear what banks have to say – as you can see 71% would rather go to the dentist than listen to banks. But banks aren’t alone in this: Millennials aren’t influenced at all by advertising (or at least think they are not). Millennials believe that advertising is all spin and not authentic. There are a lot of ways to ignore advertising these days – adblockers, recording TV shows, etc. So how can you connect your brand with Millennials? Studies show that loyalty programs with incentives and ways to engage Millennials have proven successful at increasing brand loyalty. We will discuss some ways brands have gotten around this dilemma a bit later in the webinar.
- TMillennial touch their phones on average 45 times a day. “Nomophobia” is the fear of being out of mobile phone contact. Not just phones - they are using multiple tech devices. 87% of millennials use between two and three tech devices at least once on a daily basis. So we know that in order to connect with Millennials, we are going to have to reach out to them where they spend the most time, which is increasingly (almost alarmingly) in front of screens.
- TMillennial touch their phones on average 45 times a day. “Nomophobia” is the fear of being out of mobile phone contact. Not just phones - they are using multiple tech devices. 87% of millennials use between two and three tech devices at least once on a daily basis. So we know that in order to connect with Millennials, we are going to have to reach out to them where they spend the most time, which is increasingly (almost alarmingly) in front of screens.
- And of course, Millennials are enthusiastic users of social media. As you compete with other brands for mindshare, social networks play a crucial role in reaching this audience. They are more than just a place to connect with friends, but a place to share opinions, learn about new products and even talk about brands. Obviously, joining and managing all of these networks might be a bit much for any organization to manage, but identifying those that matter – where you can get your offerings in front of the right people with the right medium, is a study worth conducting. Millennial want things beyond cash incentives. You have to get creative. In a study by a group called CrowdTwist they found that 30% of Millennials cited donations to charity as the most important benefit of being in a loyalty program. Millennials are a moving target and there is no one-size-fits all way to connect with them, maintain flexibility. So when we talk about how will you connect with Millennials, it is not just the medium, what digital channels, but also the message, the incentives and the delivery of that message.
- Given the fact that Millennials are always on their phones, it should come as no surprise that they are also banking more and more using digital channels. About 94% of Millennials are active users of online banking. Additionally, mobile payments are booming and expected to reach 90 Billion by 2017. So, Millennials are driving the push towards more digital channels, and in effect making all industries really evaluate how they interact with Millennials.
- Millennials visit banks less and less. Only 6% are visiting a branch on a weekly basis. It is the growing trend by Millennials and other customers to everyday banking online that led JP Morgan Chase to announce that it will close 300 bank branches by 2017. There are banks that have no physical branches and only digital channels. (Ally, for example.) The data helps to explain why banks across the US have been scaling back their branch networks. Millennials are already the largest generation and a target market for banks. Since only a small percentage of millennials use their bank branches often, it makes sense for banks to increase investment in other banking channels.
- What makes banking so interesting, is its risk of disruption. The Millennial Disruption Index (MDI), was a three-year study of industry disruption at the hands of this generation, carried out by Scratch a division of Viacom. It examined Millennial perceptions of brands and categories to identify which industries are most vulnerable to upheaval by this generation. 53% of Millennials do not think their bank offers anything unique 1 in 3 are willing to switch banks in the next 90 days Nearly half are counting on start-ups to overhaul the way banks work Expect innovation to come from outside the industry 73% would be more excited about a new financial services offering from Google, Apple, PayPal or Square then their bank. We can see this in the numbers
- Fico found that Non-traditional payment companies are making huge in-roads with Milllennials. And there is a good reason for this -- Many start-ups are run by Millennials, and therefore have an advantage when it comes to connecting with them. As Jamie Dimon, Chairman and CEO of JPMorgan Chase, wrote in a letter to shareholders last year: “Silicon Valley is coming. There are hundreds of startups with a lot of brains and money working on various alternatives to traditional banking. The ones you read about most are in the lending business … They are very good at reducing the ‘pain points’ in that they can make loans in minutes, which might take banks weeks.” Venmo is a peer-to-peer payments app that is especially popular with Millennials. Venmo just hit an important milestone: the company today announced it crossed $1B worth of transfers in a single month for the first time in January 2016. PayPal, which owns Venmo, says that the app is “almost ubiquitous” for users under 30 in the US; with the app continuing to grow so quickly it’s perhaps no surprise the company is looking to start using Venmo for business transactions as well. So, what exactly do Millennials want in a bank?
- What are the two main takeaways from this sentence? Convenience and Personalization.
- “With a growing mobile phone banking user base on track to reach more than half the US adult population by 2019, more banks and other financial firms are treating their apps and sites as the primary point of engagement with customers. They’re also experimenting with ways to cross-sell other relevant financial products, upsell to premium services and even acquire new customers entirely through the mobile channel,” said Yeager. - See more at: http://www.emarketer.com/Article/Millennials-Embrace-Mobile-Banking/1012871#sthash.2imn8dSn.dpuf You have to meet them here, because if you do not others will.
- Millennial often put digital convenience over security, which puts them at a greater risk of cybercime. Millennials want constant connection. This is not necessarily intuitive. Historically, a lot of the worry in cybersecurity has revolved around baby boomers: We worry that our parents or grandparents will buy into scams or give away private information. A Norton study showed that 15 percent of baby boomers have disclosed an online password to someone else. For millennials, that figure was a whopping 31 percent. According to this data set, 44 percent of millennials have been victimized by online crime in the past year, while only 16 percent of baby boomers have. Why is this? Along with this admittedly careless attitude, part of the reason for millennials' high-risk behavior with cybersecurity is because they tend to diversify their information-sharing sources. Unlike their other generations, who tend to only use one or two social media sources, millennials have a bevy of outlets with which to share private information. Because of this many Millennials share usernames and passwords for multiple sites. Social media is also a great attack vector in itself, and many phishing attacks are launched here. Many Millennials have admitted to connecting with someone on a social media site that they do no know.
- We know Millennials are constantly on their phones, and there are many threats that target this specific platform. More threats will come as more people migrate to mobile as their preferred digital channel. Apps out there that impersonate popular brands to deliver malware to mobile devices 84% use unsafe wifi to check their accounts Jailbroken devices manipulated for more functionality Smishing, which are phishing attacks delivered via SMS messages, which are harder to read and have obfuscated URLs Phishing is easier to carry out when someone is looking at a link on a small screen.
- Despite all this risky online behavior, or perhaps because of all this risky behavior, Millennials expect their bank protect them against fraud and identity theft more than ever. This creates an opportunity for financial institutions to distinguish themselves. The bank that offers a strong anti-fraud security strategy gains an equally strong sales point, and an attractive option for Millennials and consumers from any and all generations that care about online fraud protection.
- Balancing security and convenience is really the key, and if you can achieve this balance, you can make major inroads with the Millennial generation. The key is to have flexible options and to reduce friction. You want to keep your customers safe, but you do not want them to jump through a ton of hoops just to access their account. For example, put in your mother’s maiden name, choose your security image, enter a one-time-password we sent to your email, scan a QR code… No one wants to go through all of that – that is what we describe as high friction. At the same time it can’t be too easy or information that is easily found on social media for instance. When we say reduce customer friction what we mean is security should be transparent. Best security is what the user does not see. So what are some ways that you can accomplish this? We will cover some methods in the next few slides…
- It is important to take a proactive approach and try to find and mitigate threats before your customers are impacted. Brand intelligence, search for threats. For example, for our clients we monitor 3rd party app stores and notify our clients if these is anything suspicious. As we mentioned it is really easy to repackage your brands app. You can also proactively monitor social networks for brand mentions – social media is a good attack vector for cybercriminals. You should know if a fake account pops up using your logo and brand name. You can monitor domain registrations, knowing that if anything looks like your brand, it could potentially be someone trying to set up a phishing site and launch an attack. You can stop email spoofing attacks by getting visibility into your email flows by implementing DMARC. These methods of protecting your business are completely transparent, and help protect all your users – not just Millennials.
- We have talked over and over about how passwords are at risk, not just for Millennials but really all customers. So in order to keep Millennials safe we need to re-examine authentication – how we give someone access to their account. Transparent authentication can be a bit tricky, but can be accomplished with things like identifying devices and creating deviceIDs. But being completely transparent with authentication can be a difficult proposition. What you can do instead is implement systems that are user friendly and even fun… – What we have today with traditional authentication systems leaves a lot of room for improvement. Take Knowledge-based authentication for example, the answers can sometimes be as hard to remember as a password to begin with. Instead we need authentication that improves the user experience, and we are seeing this with a lot of new technologies like bio metrics. One feature that Millennials want is an easy login to their mobile banking platform. Passwords and challenge-based questions like “what was the name of your pet growing up” are outdated and inconvenient.
- Biometrics are another good example, that banks actually even like to issue press releases on – why? Because these types of security features help to win new business. Selfie pay for instance, to help authenticate users.
- Another way to protect Millennials in through real-time visibility and analytics. This means knowing what is going on, on the end-user device. If you know a mobile phone has been tampered with, jail-broken for instance, you can treat that device differently then one that hasn’t been. This increases your ability to make decisions about individual users based on their level of risk, and allows you to takes steps to remediate that problem. You could require further authentication or disable some functionality, like money transfers, for example, on a high-risk device. This functionality can be deployed transparently in an app, with an SDK for instance. You can also require a download, but keep in mind that adds a bit of friction to the process. But again, you have to determine that right balance of security and convenience that works best for your customers.
- Lastly, we need to understand our users. How do they interact with our digital services? There are transparent ways to map and track the customer journey. If you know how a user typically interacts with your site, it makes it easier to detect behavior that deviates from this. This not only keeps them safe, but also allows you to work on customization. Where is a user clicking? What are their interests?
- Moving more to digital channels is win-win. Mobile is not a bad thing, at least from a bank’s perspective. The bottom line is that mobile banking customers are more profitable than their branch-visiting counterparts, they cost less, and are generally more content with the service. A year-long study by the financial services firm Fiserv found that mobile banking users generated 72 percent higher revenue in 2015 compared to branch-only customers. What’s more, branch-going bank customers are twice as likely to leave the bank for a rival than mobile banking users. The average cost per mobile transaction is 10 cents, compared to $4.25 for an in-person transaction at a physical branch – so customers who do their banking from their smartphones just makes ‘cents’, as it were, from a profitability point of view.
- So, in conclusion – yes Millennials are challenging customers when it comes to cybersecurity, but this also creates a lot of opportunity. Are you connecting with them on the right digital media? You need to be connecting more and more online and even figuring out your strategy to use mobile to cross-sell and up-sell. Are you engaging with them and specifically making content, not advertising, that speaks to them? You need to make shareable content, video and infographics, and move away from traditional advertising. Are you hitting them with the right messaging - what are financial services that Millennials are interested in? Surprisingly little has been done by traditional financial institutions to leverage student loan debt. Can you create some sort of loyalty program that promotes social good? We know Millennials have different values, you need to speak to those. These are all things you need to consider when evaluating your Millennial strategy. We know Silicon Valley is coming – what do you offer digitally to compete? We mentioned Venmo, and how it is ubiquitous with Millennials, is peer-to-peer payments something you can also offer? Millennials are at risk and they expect you to keep them safe. Does your security posture take into account the balance between security and convenience. You need to be able to protect your customers without annoying them, push them too far and they may go elsewhere.
- So, in conclusion – yes Millennials are challenging customers when it comes to cybersecurity, but this also creates a lot of opportunity. Are you connecting with them on the right digital media? You need to be connecting more and more online and even figuring out your strategy to use mobile to cross-sell and up-sell. Are you engaging with them and specifically making content, not advertising, that speaks to them? You need to make shareable content, video and infographics, and move away from traditional advertising. Are you hitting them with the right messaging - what are financial services that Millennials are interested in? Surprisingly little has been done by traditional financial institutions to leverage student loan debt. Can you create some sort of loyalty program that promotes social good? We know Millennials have different values, you need to speak to those. These are all things you need to consider when evaluating your Millennial strategy. We know Silicon Valley is coming – what do you offer digitally to compete? We mentioned Venmo, and how it is ubiquitous with Millennials, is peer-to-peer payments something you can also offer? Millennials are at risk and they expect you to keep them safe. Does your security posture take into account the balance between security and convenience. You need to be able to protect your customers without annoying them, push them too far and they may go elsewhere.
- So, in conclusion – yes Millennials are challenging customers when it comes to cybersecurity, but this also creates a lot of opportunity. Are you connecting with them on the right digital media? You need to be connecting more and more online and even figuring out your strategy to use mobile to cross-sell and up-sell. Are you engaging with them and specifically making content, not advertising, that speaks to them? You need to make shareable content, video and infographics, and move away from traditional advertising. Are you hitting them with the right messaging - what are financial services that Millennials are interested in? Surprisingly little has been done by traditional financial institutions to leverage student loan debt. Can you create some sort of loyalty program that promotes social good? We know Millennials have different values, you need to speak to those. These are all things you need to consider when evaluating your Millennial strategy. We know Silicon Valley is coming – what do you offer digitally to compete? We mentioned Venmo, and how it is ubiquitous with Millennials, is peer-to-peer payments something you can also offer? Millennials are at risk and they expect you to keep them safe. Does your security posture take into account the balance between security and convenience. You need to be able to protect your customers without annoying them, push them too far and they may go elsewhere.