January 20, 2018

Security, customer experience and innovation: what’s the connection?

By: Jim Van Dyke, CEO, Futurion Digital
& Thelton McMillian, CEO, Comrade

Security matters greatly to both customers and innovation success. Yet there’s little consensus on how much security should be proactively introduced into the customer experience (beyond what is absolutely essential) and the degree to which greater inclusion of security can drive overall success in innovation.

This theme came out in several interviews I conducted with banking or payments fintech leaders, for my recent Innovation Speed to Market Report, presented by CI&T and Comrade. Select portions of this blog are excerpts from that report.

Many industry leaders operate under the belief that security should be introduced only when there is no other option (believing that the topic only represents a defensive strategy that comes with a great risk of alienating customers), while others choose to more actively build security-themed partnerships with customers—or even internal team members.

At some point in the life cycle of any new product, security will a top factor determining consumer interest, adoption or usage

We should all be accepting this as fact: depending on the nature of the product, target market or adoption-stage, at some critical point security will be the primary theme that determines how many customers take the next step. (Because the timing of these factors constantly changes, you must consult research data to ensure you’re not under- or over-focusing on security, but I’ll cover that at the conclusion). Whether it’s mobile banking, mobile payments, payments features like check deposit or NFC, security always bubbles up to the top spot in customer desires or concerns—and at that point only an offensive strategy works for customer experience, positioning and all other go-to-market efforts.

Leave a seat at the table for the customer in your security and fraud-avoidance efforts

Because fraud generally involves customer accounts, giving the customer anything less than a major role is a mistake. While much of the technology spend related to security or loss-avoidance relates to technologies never seen by customers, the never-ending stream of consumer media attention devoted to security and ID theft is a testament to consumer interest. This researcher’s experience? The best way to put a worried customer at ease is to put them to work. Further, there are certain security roles that only the customer can play (such as viewing alerts, monitoring statements, protecting passwords and so forth).

Because empowering customers to help prevent, detect or resolve security or fraud events can be complex, customer experience is of paramount importance. Despite this, many security or fraud experts shy away from involving the customer, claiming it’s impossible to get them to care or be effective in their efforts. While there are limits, my experience says that effective security customer partnerships bring both upside financial benefits (acquisition, activation, cross-sell) and downside-mitigation ones (loss avoidance, attrition improvement, reduced service). Yet because many skilled security or fraud operations experts aren’t equally adroit in creating delightful customer experiences, they won’t have first-hand success stories of engaging customers. The solution is for security and fraud-operations leaders to partner closely with those who are primarily tasked with creating delightful customer experiences.

Don’t leave security out of the plan—or only view it as a way to minimize something worse

A digital leader at a super-regional bank who was recently moved from a digital to customer security team said, “Make security a selling point of your approach. The cloud has obvious vulnerabilities, but with third parties, security can—and MUST—be better!” The long-term trend of improving customer engagement and empowerment represents innovation opportunities that can cut customer fraud by working together in areas such as two- factor authentication or account monitoring.

Surprise! Your most risk-averse people could be innovation rock stars (if you let them)

Surprisingly, several innovation leaders I interviewed for my report discovered that one or more individuals
in their risk, fraud or cybercrime function had become an irreplaceable part of the team at ideating, shaping or building the most innovative capabilities. This might stem from the creativity it takes to foil growing threats from ingenious bad actors, nevertheless all interviewees recalled their initial disbelief at seeing ideation and creative development capabilities come from the last source they expected.

A few final suggestions related to security, customers and innovation

We all have our opinions, but make sure you’re letting the data be your guide. (My personal litmus test: Can you recall a recent time when you let data override your opinion?) The “threatscape” (security experts’ label for the landscape of criminal activity) changes constantly and great sources of data are available to guide your innovation efforts on design factors, features, positioning and much more. Be wary of widely-used anecdotes and instead challenge “hallway research experts” to back up their assertions with current and rigorous sources of data. (My favorite myth: “Consumers don’t care about fraud in the credit card accounts, because they have zero liability for fraud.”