The recent Equifax breach has rightfully frightened millions of customers – one of the most trusted organizations in the financial industry was attacked and had more than 100 million consumers’ personal data stolen.
News reports have been offering consumers advice on what to do, with the suggestions ranging from freezing credit to closely watching bank statements for the next few months. But financial institutions have a much more powerful weapon to fight data breaches. This weapon is putting fraud protection in the hands of consumers with mobile-based card controls. This creates safeguards for the bank and customer while mitigating the risk of a damaging impact from the breach.
The secret power behind mobile-based card controls is that by nature of the apps design and automation related to transaction alerts, the compromised information is useless in the hands of a criminal. From the debit and credit card side, financial institutions should provide solutions that allow their customers to stop fraud following an alert with just a couple of taps on their smartphones.
Mobile-based card controls offer a fundamental shift in how fraud is mitigated even if the hacker has compromised the card information. How this works is through defined controls, such as the card’s location, transaction filters, or channel filters (such as card-not-present or phone transactions). Transactions that fall outside the permitted filters trigger an immediate verification to the mobile device, enabling customers to immediately stop a fraudulent transaction before it begins. In addition, these apps can keep tabs of each and every transaction, allowing them to easily flag transaction allowed by the filters as fraudulent.
This method is both effective and useful due to the fact that most customers always carry their smartphone with them. By giving customers control of their own transactions, they are able to quickly and easily combat fraud without the risk of accruing more fraudulent charges or having criminal transactions go unnoticed.
Additionally, mobile card controls benefit the financial institution by simplifying the process of identifying fraud and contacting customers. One of the biggest roadblocks for fraud departments is actually getting a hold of their customers. Unless the customer’s contact information is fully up to date, the fraud department is in a constant scramble to get a hold of the customer to determine if charges are fraudulent or not. This typically results in shutting off access to the card regardless, which may end in the loss of a customer due to false negatives, resulting in erroneously shutting off their access to funds.
The Equifax breach will not be the last major data hack. Data breaches will continue to happen in the future at companies large and small. At some point in every person’s life, they will have their information compromised, but the extent of the impact varies from causing little harm to complete devastation.
When faced with a breach, it is important that financial institutions provide solutions that allow the fraud to be managed from the hands of the consumer. This allows the customers to act on the fraud instantly, while also building trust with their financial institution through these offerings.
It’s not a matter of if, it’s a matter of when the customer will be affected and how their institution can take the pain out of the ordeal.