Seamless User Experience
Customers want to be able to access their accounts through any device at their convenience. Single sign-on (SSO) allows customers to access the apps or websites associated with their account through a single login. This eliminates the need for multiple passwords, and frustrating password resets, which improves the customer experience and reduces IT support costs. Customers can also update their account profiles through self-service features, process transactions, retrieve information, and manage data privacy settings at any time.
Unified profiles
Customers often expect a personalized experience from service providers. CIAM enables unified customer profiles stored in a secure directory to provide consistent multi-channel experiences and personalized interactions. For example, a banking customer who has a car loan and credit card through affiliated companies can update their address once rather than having to update it in each app or website. As more information is gathered on customers through progressive profiling, firms can identify opportunities for new products or cross-selling with partners.
Reduce Fraud
Bad actors view banking and other financial accounts as high-value targets. Fraudsters with stolen credentials, including username-password combinations, can take over legitimate user accounts if identity security measures are not in place. Multi-factor authentication (MFA) and two-factor authentication (2FA) require users to provide proof of their identities from two or more of these categories:
Something you know (knowledge): Passwords, PINs and answers to security questions
Something you have (possession): Smartphones or other devices, hard tokens, key fobs and smartcards.
Something you are (biometrics): Physical traits verified through fingerprint scans, voice or facial recognition, retinal scans and other methods,
Fraudsters rarely have multiple proofs of identity. To reduce friction for legitimate customers, risk-based authentication can evaluate customer behavior, device data and other contextual factors in real-time to determine the risk level and add MFA only when needed. Limiting the need for additional authentication to high risk situations, such as logins from a new device or location, can streamline access for customers.
Limit the Scope of Data Breaches
Data breaches can be caused by rogue insiders, employees falling for phishing attacks, or inadvertent mistakes made by IT or development teams. CIAM foils data breaches by:
Encrypting data so that it can be difficult or impossible for hackers to use
Alerts administrators of suspicious activity
Logs tampering evidence so insiders cannot cover their tracks
Privacy and Regulatory Compliance
Financial services is a highly regulated industry. Standards-based identity and access management platforms are needed for compliance, such as Payment Services Directive 2 (PSD2) and Open Banking’s requirements for banks themselves, providing secure access to accounts through open APIs, strong customer authentication (SCA) and consent management. Data privacy regulations vary by region, such as California Consumer Privacy Act (CCPA) and General Data Protection Regulation (GDPR).
Merging CIAM solutions with identity verification solutions allows financial service firms to meet Know Your Customer (KYC) regulations to verify customers, their risk profiles, and financial profiles. If a person fails to meet minimum KYC requirements, banks may refuse to open an account or halt a business relationship. These client-onboarding processes help prevent and identify money laundering, terrorism financing, and other illegal activity. For firms that fail to adhere to regulations, penalties are steep. Almost $1 billion in KYC, anti-money laundering (AML) and data privacy fines were issued during the first half of 2021.
