What You Need to Know:
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Last year generated a historic number of data breaches, compromising the personally identifiable information (PII) of nearly 300 million individuals. While it’s natural to think about how these breaches put individual victims at risk of identity theft, financial crimes and fraud, the fallout also can have a direct impact on their financial institutions.
That’s because financial institutions must contend with a variety of different concerns caused by third-party breaches, including managing the impact on consumers, employees and the organization itself.
While helping people with their financial health is a key issue for financial institutions, many organizations overlook the critical role identity security plays in the financial health of consumers.
Meanwhile, consumers have already made that connection. They view their bank or credit union as a protector of their information — and roughly half of those surveyed say they turned to their financial institution for help in the wake of a third-party data breach.
That expectation for assistance can influence the digital services offered by the financial institutions.
Investing in the customer relationship can help differentiate the organization, generate greater loyalty and trust, boost engagement with the existing digital security and financial tools, and lead to a greater share of wallet. Financially healthy individuals make for better borrowers and have a greater lifetime value for the organization, so banks and credit unions that help consumers protect their identity and financial health help their mission — and bottom line.
As consumers themselves, employees can also have their identities compromised in a third-party data breach. Unlike customers, however, the compromise of an employee could directly impact the financial institution.
Forward-thinking financial institutions are increasingly expanding their employee benefits programs to include credit and identity protection services, with 78% reportedly planning to add it in 2022. For these organizations, the result is reducing the potential risk to employees and the financial institution itself.
Nearly half of Americans (46%) admit they wouldn’t know what to do if their identity was stolen, which is why they instinctively turn to their financial institutions for help. With 62% of consumers expecting organizations to anticipate their needs, banks and credit unions that get ahead of this demand can be well-positioned for the future.
To do this, financial professionals need to understand the current threat landscape, how consumers and financial institutions are affected by these threats and the practical ways banks and credit unions can reduce the risk to customers and themselves. Sontiq’s 2022 Digital Safety and Security Report for Financial Institutions is designed to give financial providers the insights that can help them meet those expectations.
By helping consumers proactively protect themselves against the impact third-party breaches have on their identity, credit and overall financial wellbeing, financial institutions can not only reduce their own risk — they can also foster the loyalty, trust and engagement that can lead to greater wallet share and lifetime value of each customer.