Security News > 2020 > October > Banks risk losing customers with anti-fraud practices

Many banks across the U.S. and Canada are failing to meet their customers' online identity fraud and digital banking needs, according to a survey from FICO. Despite COVID-19 quickly turning online banking into an essential service, the survey found that financial institutions across North America are struggling to establish practices that combat online identity fraud and money laundering, without negatively impacting customer experience.

51 percent of North American banks are still asking customers to prove their identities by visiting branches or posting documents when opening digital accounts.

"The pandemic has forced industries to fully embrace digital. We now are seeing North American banks that relied on face-to-face interactions to prove customers' identities rethinking how to adapt to the digital first economy," said Liz Lasher, vice president of portfolio marketing for Fraud at FICO. "Today's consumers expect a seamless and secure online experience, and banks need to be equipped to meet those expectations. Engaging valuable new customers, then having them abandon applications when identity proofing becomes expensive and difficult."

According to a recent Consumer Digital Banking study, while 75 percent of consumers said they would open a financial account online, 23 percent of prospective customers would abandon the process due to an inconsistent identity verification process.

The lack of automation when verifying customers' identity isn't just a pain point for customers - 53 percent of banks reported it problematic for them too.

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