Retail banks are facing two challenges these days when it comes to authenticating their customers with Interactive Voice Response (IVR) systems. One of these challenges is friction. The other is fraud.
When the process of authenticating banking customers is lengthy, cumbersome, or annoying, this adds “friction” to banking transactions, which frustrates and exasperates customers. Customers are looking for friction-free experiences with their banks.
Since “friction” is the buzzword of the day, let’s define our terms. Friction means customer friction. Customer friction is any step in the customer experience that hampers the customer from buying a product, having success with a product, or finding value in the product.
Since banking is a service and not a product, we can tweak this definition. In banking, customer friction is any step in the banking customer’s experience that hampers the customer from opening an account, enrolling in a service, conducting an online banking transaction (such as paying a bill), conducting a phone-banking transaction (such as transferring funds between accounts), verifying their identity, or getting an answer to a problem.
Essentially, customer friction is anything that causes your customer to hesitate or stumble as they conduct business with your bank. The opposite of friction is seamless. Your goal as a bank is to create a frictionless experience for your customers. Friction-free banking is essential to your longevity, brand loyalty, customer satisfaction, and profitability.
Then there’s the challenge of fraud. Some of today’s identity verification methods are susceptible to fraud. When all that separates a retail bank from a fraudster is a bank card number and a password (one that fraudsters can obtain easily these days), this increases a bank’s exposure to identity theft and outright theft.
To eliminate friction and fraud, a growing number of retail banks are integrating biometric authentication with their IVR systems. These new systems are quick and easy for users, and they are fraud-proof for banks.
The move towards combining biometric authentication with IVR is part of a larger trend. Banks are going passwordless. Yes, banks have been using passwords to very customer identities for a long time. Passwords are one of the oldest, most common methods of verifying users. But passwords are no longer enough. The growing number of instances of theft or breaking of credentials through spying, third-party interception, and brute force attacks is forcing banks to find verification methods that are more secure.
One of the easiest methods to adopt is multifactor authentication (MFA), a method that provides greater security for both banks and customers. And one of these MFA methods is biometrics. Read on to discover how biometric authentication and IVR are transforming the banking industry.
Interactive Voice Response is an automated technology that lets phone callers use their voice and their phone keypad to interact with a business. The process involves an “IVR dialogue,” in which the IVR system uses a set of pre-recorded questions or requests to prompt callers for information, and callers use their voices or phone keypads to respond to those requests.
Interactive Voice Response systems are popular in industries that field large volumes of phone calls. These industries include retail stores, utility companies, weather services, and banks. The advantage of IVR systems is that they help businesses improve customer service, lower costs, and scale their operations.
Interactive Voice Response (IVR) systems allow bank customers to complete banking activities by phone, without the assistance of a human agent. For banks, IVR systems allow banks to automate many banking processes, giving their employees and call-center agents more time to concentrate on tasks that are more complicated or that require human interaction.
Until recently, banks authenticated phone-banking customers by using an IVR to prompt customers to enter their bank card number and PIN. And banks that offer online banking prompted customers to enter their bank card number and a password into an online form, and then sent the customer a text message featuring a code that the customer had to enter into a form on the online banking portal.
Today, banks are making this process more streamlined and secure by replacing texted codes with biometric verification. Here’s how it works:
Customer: Places a call to their bank to do some phone banking
IVR: Prompts customer to enter bank card number and press #
Customer: Enters bank card number and presses #
IVR: Sends a secure text message to the mobile phone number the customer has on file. The text message includes a link. Automated voice says: “We have sent you link by secure text message. Please click on that link to continue with the face biometric authentication process.”
Customer: Receives text message. Clicks on the link. Is taken to an app that turns on the phone’s camera and prompts the customer to position their face within a frame and look directly into the camera. Customer does this.
IVR: Phone app takes the selfie, compares the image with the image of the customer that the bank has on file. Automated voice says: “Thank you for verifying your identity. For account balance, press 1, to transfer funds, press 2,” and so on.
This process is faster than a traditional IVR identity verification session, and is more secure. It’s more secure because it uses artificial intelligence and machine learning to verify the customer’s face, and because it uses active or passive liveness detection to ensure that the face being presented to the camera is live (and not a sculpture, mask or photo of the customer’s likeness).
The beauty of IVR is that it automates banking transactions. And the beauty of biometric verification is that it automates identity verification. Your banking customers no longer have to remember passwords or PINs. They just have to look into the camera on their phone, wait for around one second, and, presto, they are authenticated and ready to start banking—all without any human interaction on your part.
The other beauty of integrating biometric facial recognition with your IVR is that you protect your customers and your bank against fraud. Nearly 1 in 5 people reported a financial loss due to an imposter scam. Adding a layer of biometric protection to your IVR authentication process eliminates the chance of fraud—and protects your customers.
According to a study conducted by Experian, 61% of consumers believe that biometric identification is as secure or even more secure than traditional passwords. These same consumers also appreciate that biometric identity verification systems are faster than traditional methods.
With biometrics, retail banks quickly authenticate banking customers. These biometric systems quickly provide full visibility into customer accounts, and there are no instances of duplication to worry about with a quality system in place.
Banks are already using biometrics to help customers open checking and savings accounts, apply for loans, sign into their bank accounts online—and plenty more.
By integrating biometric authentication with your IVR, system, you resolve two of the major challenges facing retail banks today—friction and fraud. You:
Biometric facial recognition is a form of multifactor authentication, but it’s not just any form. Unlike passwords and pins, faces cannot be stolen. And they are remarkably difficult to spoof or counterfeit. Plus, your customers can’t lose, or forget or share their face. Biometric verification gives your bank data, your employees, and your customers a much higher level of security. Using biometrics as part of your MFA lets your bank go passwordless, eliminating the many security problems that come with passwords.