Banks Must Deal With Concerns From Customers and Employees Regarding Mobile Security

Most of us probably have worked with people who left valuable personal items lying around their workspaces in full view of anyone who might have itchy fingers. And when one of those valuable items was inevitably "liberated," the owner invariably was shocked, angry and embarrassed and quickly began bemoaning society's moral collapse while pointing a finger at his or her employer's weak security and too-open access.

Because of security fears, only one in five mobile phone users has banked via a mobile app in the past year, the Federal Reserve reports. While it is harder than ever to secure the increasingly mobile-based, real-time and open-access enterprise, it's also more important than ever. Bank Systems & Technology's security special digital issue examines the strategies and tools banks are using to provide an exceptional customer experience without compromising safety.

These potential victims are not deliberately tempting latent thieves or testing the honesty of others in the office. Rather, they are careless, hurried and also very trusting. No matter how many times you exhort a colleague not to leave her open wallet on her desk, she's not likely to change her behavior -- until it's too late.

Put that behavior and the related attitudes into the context of banking, and you have a perfect metaphor for the challenges financial institutions face around security. Customers and employees demand convenience, speed and simplicity in all kinds of transactions and interactions. At the same time, they are frustrated if they lose access to accounts, files or tools -- not to mention the outrage if their information (personal or corporate) is breached.

Meanwhile, the bank -- whether in the role of financial services provider or of employer -- is in the uncomfortable position of knowing that, even if the customer or employee is at least partly to blame for the problem, it could and should have done a lot more to prepare for the possible breach or loss. In addition to a more secure infrastructure, there could have been simpler security-related tools and processes, more training and better communications about the importance of data security, and stronger enforcement of security policies. As a result, it's harder than ever to simultaneously secure an increasingly mobile-based, real-time and open-access enterprise while also improving customer engagement -- and that is the focus of much of our coverage in the September digital issue of Bank Systems & Technology.

According to recent research from Guardian Analytics and The Ponemon Institute, 72 percent of small and mid-size businesses surveyed said they hold their financial institutions primarily accountable for ensuring their online bank accounts are secure. But only 43 percent of the study participants said their FIs take appropriate action to limit risk transactions. And 56 percent of the businesses surveyed said it would take only one successful fraud attack for them to lose confidence in their FI's ability to provide adequate security.

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To look at the costs of security breakdowns in another way, the average loss in brand value for a company that experiences a data breach can be anywhere from $184 million to more than $330 million, according to PwC. And the collective industry damage can be even worse. Customers' and employees' conclusions may not be fair, informed or justified, but they are reality.

Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio