Financial fraud isn’t anything new, and the extent of the crime can vary significantly. Forty-seven percent (47%) of US consumers experienced financial identity theft fraud in the past two years—in fact, every 15 seconds a financial fraud incident occurs. COVID-19 has only accelerated the growth of financial fraud. Losses due to identity theft increased by 42% from 2019 to 2020 primarily due to the COVID-19 pandemic, according to a recent study published by the Aite Group.
Today, there are multiple authentication steps in place in financial institutions thanks to the steady increase in cybercrimes. These high-tech frauds take assets from financial institutions and deliver a bit of reputation risk to their public image. Research demonstrates that consumers expect their financial institution to take active steps to mitigate financial risks. Consumers want protection, but they also want a fast and efficient user experience. Too often, each delivery channel is a silo with its own authentication method:
For example,
- The call center uses knowledge-based questions
- The lobby and drive-up require a driver’s license or other physical forms of identification
- Online banking access calls for a username and password plus, often a two-factor authentication.
And consumers want more control over their personal data. In late September 2020, we commissioned a nationally representative survey to over 1,000 adults about their perceptions of MemberPass, Bonifii’s digital credential solution that enables financial institutions to instantly verify financial credentials seamlessly across all consumer contact points in a highly secure and privacy-preserving manner.
There were lots of noteworthy findings:
- 62% of credit union members said they would sign up for MemberPass if it were available.
- 56% of respondents who are satisfied with their financial institution would use MemberPass.
- 67% of consumers would feel more positive toward their financial institution if MemberPass was offered.
- 50% of consumers would sign up for MemberPass today if a security breach had impacted their account or if they had been identity theft victims.
There is a better way for financial institutions and consumers!
Since its launch in early 2020, MemberPass has been gaining momentum among credit unions and with the members they serve. MemberPass is the financial industry’s first digital credential solution that enables credit unions to instantly verify financial credentials seamlessly across all consumer member contact points. Because MemberPass is built on Hyperledger Indy, credit union members can retain full control of their private personal information. The credential is secure and flexible. It allows the member to reveal only the data necessary for a given transaction. Best of all, it’s impossible to hack or steal.
So far this year, we have seven active MemberPass implementations with another ten more credit unions planning their deployments in the next six months. Our active programs have gotten MemberPass credentials into the hands of about 20,000 members to date.
After we make a program sale, we continue to work closely with our credit union clients. We present each of them with a personalized copy of the MemberPass “Jump Start” playbook. This is a comprehensive toolkit to help the credit union increase the level of member adoption of MemberPass.
The playbook contains product benefits, consumer need identification tools, call center and drive-through workflow models, marketing strategies, incentive programs, and more. Our adoption goal is to get between 5-10% member adoption within six months of the “go live” date.
The demand for decentralized identity among financial institutions is only getting stronger—and, best of all, no one but the consumer owns his or her personal data!
Cover image: Hloom via Flickr / CC BY-SA, 401(K) 2013
