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New Customer Onboarding Just Become Easier – Here’s Why

Featured New Customer Onboarding Just Become Easier – Here’s Why

A provision within the recently enacted Dodd-Frank Repeal Act makes it easier for financial institutions to onboard new customers remotely. The MOBILE (Making Online Banking Initiation Legal and Easy) Act within the Dodd-Frank Repeal removes restrictions on using e-signatures and digital copies of important documents. Remote onboarding introduces new security risks, though.

To mitigate the risks associated with the MOBILE Act and onboarding, it’s more critical than ever to keep a watchful eye on your firm’s security and implement proactive security measures to prevent identity fraud.

How the MOBILE Act Affects Onboarding

How the MOBILE Act Affects Onboarding

Although some states already allowed digital copies of identification documents to be used as proof of identity, the MOBILE Act legalizes this practice nationally.

New customers can also sign required documents using an e-signature. An e-signature can also now be used to verify customer Social Security numbers through Consent Based Social Security Number Verification (CBSV). Before the act, financial institutions and their customers had to download and sign the consent form, then scan and upload the document. The MOBILE Act now allows the CBSV to accept e-signatures, streamlining the onboarding process significantly.

Best Ways to Address Onboarding Security Concerns

Best Ways to Address Onboarding Security Concerns

Remote onboarding brings new security concerns for financial institutions. Cybercriminals are aware of the legislation as well and may seek to exploit relaxed restrictions on opening accounts with financial firms. Some of the attacks you may see include:

  • Identity theft. With more than 16 million victims of identity theft each year, identity theft is a serious concern for consumers. With the advent of chip technology, identity theft is moving from fraudulent credit card use to new account fraud.
  • Malware is constantly evolving. Bad actors use viruses, spyware, Trojans, and more to infiltrate networks. Mobile and remote onboarding provide another point of access for opportunists.
  • E-signature security exploits. Although digital signatures are secure, there are multiple digital signature standards, which complicates sharing signatures and creates opportunities for fraud.

With the damage security breaches cause to consumer confidence and your bottom line, it’s vital to have robust security measures in place.

A layered security approach ensures that your financial institution is protected at every level. Layered security includes:

  • Encryption
  • Virtual private networks that limit remote access
  • Network segmentation
  • Multi-factor authentication
  • Activity monitoring
  • Firewalls
  • Vulnerability scanning

Out of all the elements of layered security, encryption stands out as one of the most important because of the sensitive information being transmitted during the remote onboarding process. When data encryption is paired with an encrypted VPN, it gives your firm and your customers peace of mind when providing their data.

Consider stepping up network segmentation with micro segments. These isolate the amount of access given to a device based on your policies, keeping potential cyber attacks from bringing down your entire network.

Multi-factor authentication goes beyond a simple password and requires additional information from the user. This increases security at a lower cost than other authentication methods. You may generate a one-time code that’s sent to the customer’s mobile number or email address, for example. The customer then enters the code to log into the mobile app or finish a step in the onboarding process.

Proactive monitoring of activity helps minimize threats from onboarding or any other aspect of the remote banking process. This means having a solution in place that can detect and prevent threats and alert your team so that they can take the appropriate actions to contain the threat.

An integrated firewall management solution can make managing your firewalls easy for your team. They can quickly implement policy changes and updates to ensure your firewall is keeping up with the increased demands of remote and mobile onboarding.

Vulnerability scanning augments your regular penetration testing. Your team should regularly and thoroughly assess every aspect of your network to ensure there are no weaknesses in your security structure.

A Key to Data Security – Customer Education

A Key to Data Security – Customer Education

Educate customers about the importance of security measures by providing simple videos or tutorials that address creating a strong PIN and password, or why your firm has implemented multi-factor authentication.

Giving customers information on how to store the ever-increasing number of passwords they have would provide value as well. There’s also value in remind customers of the risks presented by using public WiFi for financial transactions and that they would do well to carefully screen any third-party apps they download.

Some customers may be hesitant to complete remote onboarding due to a lack of familiarity with e-signatures. You can provide resources about the security of e-signatures and Public Key Infrastructure (PKI) in easy-to-understand language. You can reassure them that by law, any digital copies of identification are destroyed after account opening.

Working with a Trusted Partner

The MOBILE Act’s onboarding changes have far-reaching implications. You have an opportunity to push your firm’s technology forward, engaging potential and existing customers in new, engaging ways. Increased access to your network creates new security challenges, though.

At DataComm, we partner with financial institutions, offering network management and network security. We can support your in-house team or completely manage your network. We know the technological demands you’re facing and the importance of being able to focus on moving your business forward. As you integrate new opportunities such as remote onboarding, we’re there to support. Contact us today to find out how we can help.

 

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This entry was posted in financial institutions, network security, consultation

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