Nivo, the Manchester-based instant messaging and identity verification platform, today published a research report which highlights the security risks of financial firms using email and SMS for customer communications.
Written by Martin Hill-Wilson, who is recognised as a thought leader in Customer Experience, the report identifies email and SMS as messaging platforms popular with customers, yet easy touchpoints for identity theft and fraud. UK fraud losses totalled £844.8 million in 2018, an increase of 16% compared to 2017 according to data collated from members of UK Finance.*
Financial firms are required to capture customer data and verify identities in order to comply with Know Your Customer (KYC) regulations, while at the same time customers are increasingly demanding paperless, mobile communications. In many cases this conflicts with security measures in place at financial firms, as they combat the growing threats of identity fraud and cyber crime.
The report includes examples of how email and SMS can be compromised. Often specialist software is used to mimic genuine messages, altering the sender ID on a message to become the same as that of a financial brand. The software can even insert a phishing text within a genuine existing message thread from a bank on the customer’s phone, to appear authentic.
Channels such as WhatsApp offer encryption to keep data private, but are not reliable for identity purposes, can often be compromised with access to an email account, and carry data privacy risks at a time when GDPR is front of mind.
“ID theft is a significant and growing issue for financial firms globally and managing that risk can become time-consuming and expensive as firms comply with KYC and combat fraud,” said Mike Common, CEO at Nivo. “All financial firms need to ensure regulatory compliance and have secure communication channels, whilst at the same time increasing back office efficiency and providing high levels of customer service via mobile.”
He added, “The industry is looking for a solution which offers secure, efficient and paperless communication, improving customer service whilst significantly cutting the time taken to onboard customers and reduce dropout rates.”
The report’s author, Martin Hill-Wilson, is a regular chair at customer service conferences, keynote speaker and provider of masterclasses on topics ranging from service strategy, omni-channel design, conversational Artificial Intelligence, emotive customer experience and service innovation.
Nivo’s report stresses that fraud also significantly impacts customer loyalty and retention, stating that 40% of customers affected by fraud would blame the financial brand.
Nivo is the only trusted e-signature technology being used by a range of brands in the secured lending industry. Its secure instant messaging network includes advanced data protection features, so firms in regulated industries can connect with customers, verify identities, gather personal information and complete transactions much more easily using mobile technology. Launched in late 2018 as an early stage spin out from Barclays Bank, Nivo is working with large banks, lending brokers, lenders, credit unions and professional services companies who use the platform to significantly improve customer sign ups and increase efficiency.
The platform offers features including Onfido identification verification checks, the ability to securely send and receive files and photographs, open banking, and electronic signatures – all delivered via instant messaging.
Since launch, Nivo has enabled more than £20m of loans to be written by financial services organisations using its platform and has engaged with over 50,000 consumers.