PSD2—An Opportunity to Enhance Customer Experience
The EU’s Revised Payment Services Directive (PSD2), fully enforced on September 14, 2019, introduces multiple changes to the European electronic-banking ecosystem to empower bank customers with new, innovative ways of managing their bank accounts across multiple financial institutions, along with more streamlined electronic payments—an initiative commonly referred to as Open Banking.
Openness Demands Security
As the directive allows customers to give their consent to their Account Servicing Payment Service Provider (ASPSP), most commonly a bank, to share their account data with multiple Third-Party Providers (TPP) and other ASPSPs, there is an even greater need to adopt high security standards to prevent the misuse of a customer’s identity.
Therefore, the PSD2 sets the minimum standards for Strong Customer Authentication (SCA) that need to be implemented by ASPSP to reduce the possibility of an identity breach. The Strong Customer Authentication process must consist of at least two out of these three authentication factors:
The most common combination of these security measures includes a mobile phone (a mobile app, text message, etc.) and a password to ensure that the person calling is really the person they claim to be.
However, these days, mobile phones can be easily stolen and passwords obtained through social engineering.
Therefore, to increase the account security further, it is feasible to turn toward the authentication factors based on what the person has—the person’s biometrics.
There are multiple biometrics that can be used for customer verification, such as their fingerprint, facial recognition, iris scan, and more, but there is only one that is the most convenient when speaking to someone over a phone—the person’s voice.
Improving Customer Experience
When customers reach out to a contact center of a financial institution, the very first thing they do, naturally, is speak. Therefore, using their voice biometrics as an authentication factor is the most convenient way to prove their identity in alignment with the PSD2’s Strong Customer Authentication requirements.
Additionally, using the customer’s voice biometrics is not only beneficial for authentication purposes but also for improving the customer experience as customers don’t have to remember additional passwords and can still enjoy the benefits of higher security and seamless communication with their bank over the phone.
Finding the fine balance between security and an immersive customer experience can be a challenging task. However, with voice biometrics, it becomes much easier as security is improved automatically along with an enhanced customer experience.
As you can imagine, the PSD2’s Open Banking revolution is a perfect opportunity for financial institutions to re-think customer authentication experiences and to transform them into being more seamless and intuitive, while secure at the same time.
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