The larger security war in the financial services sector has two fronts: banks vs. hackers. Every time the companies advance their strategies and technical capabilities, the malicious actors on the other side work to break through these barriers.
It is not so different from a medieval lord building higher and stronger walls the hold up perfectly — until the vandals figure out more ingenuous ways to set up ladders to knock holes in the fortifications.
This tit-for-tat war of oneupmanship has been going on for decades, and it likely isn’t about to stop anytime soon.
But there is a different battle happening away from the main clash that, little by little, is also doing tremendous damage to these financial institutions.
Photo: Loren Moss of Finance TnT (left) chats with Eric Crabtree of Unisys about micro-segmentation’s impact on both security and improving the customer experience.
Each time they ramp up their security protocols, things tend to get more difficult for the customers. They need to remember more passwords and answer more security questions just to access their own accounts and check on the status of the very financial issues that define the most important aspects of their lives, from their paychecks and savings to their mortgages and retirement accounts.
But, finally, companies are starting to get wise to the damage this is all doing to their customer experience and brand loyalty. After years of complacency, they have started to lose marketshare and mindshare to a host of nimble, agile fintech disruptors offering sleek platforms that many customers now prefer to use.
Unisys (NYSE: UIS) is one technology company that is working to help these traditional financial firms get with the times. By leveraging new technology, such as artificial intelligence and machine learning, and bringing micro-segmentation strategies to the forefront, the Blue Bell, Pennsylvania-based information technology company is trying to show banks that security and customer experience don’t have to be at odds.
To find out more about the global company’s outlook and approach in the banking world, Loren Moss, executive editor of Finance TnT, sat down for a conversation with Eric Crabtree, global head and vice president of financial services at Unisys.
Among his many insights, Crabtree explains how banks are beginning to use these technological advances to improve both the customer experience and security — at the very same time.
Loren Moss: How are new technologies — such as robotic process automation and artificial intelligence — broadly changing the way that banks are delivering customer service to their clients?
Eric Crabtree: There are two different ways they are providing different benefits to their customers. The first is improving the customer experience, especially with artificial intelligence and data analytics. This allows banks to better understand their customers so that they can provide the most-relevant offerings at the right time to the right customer versus trying to take a blanket approach and sell a particular product or service to everyone.
“Security and great customer experience aren’t mutually exclusive. They can, and often do, work together.” – Eric Crabtree of Unisys
At the same time, these new technologies also protect customers. By using artificial intelligence and machine learning, you start to understand how to better detect fraud — or any abuse that is happening on the accounts, saving banks millions and providing a better customer experience at the same time.
Loren Moss: How can banks use technology to reinvent themselves and innovate to take more of initiative given the rise of these disruptive, digital-native companies that are changing the way banking is done? How can banks leverage technology so they are not playing defense but actually taking the lead?
Eric Crabtree: That is a really great and relevant question. Banks have had a luxury. They have been able to operate a certain way for a very long time and, in most cases, provide a valuable service to their customers and to the society. But the way that people want to bank now — by using different types of channels, especially mobile banking — is opposed to wanting to go into the branch. It has changed the game
Banks need to take a hard look at themselves from a process perspective and ask: “Am I using digital just as another channel? Or, am I actually re-inventing my operations, reinventing my processes, providing a superior customer service that interests people and creates stability at a different way of doing business?”
But at the same time, banks need to challenge themselves to take it a step further — especially in the area of loyalty — and start better understanding their customers. What are the loyalty programs that are relevant to an individual and how do you intertwine those into banking propositions? When a customer is thinking about whether to book a flight or buy some sort of retail product, would they actually go to their bank first rather than the actual store? It is going to be interesting to see which banks can move ahead.
Do you know where are we starting to see it? In some of the banks in Asia. In Hong Kong, for example. But it will be interesting to see if that sweeps across the rest of the world. Otherwise banks will have to stay within their box and will be limited in how far they can leapfrog some of these newer companies.
Loren Moss: Omnichannel seems important here. In the past, there’s been a disconnect between these different channels of engagement, and I think the banks that can integrate all these different platforms and provide a unified, omnichannel customer experience are going to have the advantage.
Eric Crabtree: I think that you are absolutely right. And, at Unisys, that is part of the direction we are taking in terms of getting in front of our clients and helping them help their customers. Our new platform, Elevate, for example, is an omnichannel banking solution. So, it does allow the customer to start in one particular channel and, if they get stuck or have questions or just ran out of time and need to finish in another channel, they can pick back up and they don’t get lost and start over in the process.
That’s been a real issue in the past for banks, and not being able to keep that customer in contact resulted in a very frustrating experience for customers. If you can use technology to help change that mindset — to actually think about the experience rather than the channels — then you’ve got a real winner there.
Loren Moss: In terms of security, how can things like micro-segmentation and other technologies protect banks? How do you strike the right balance and use technology to both enable employees and customers and at the same time secure the assets?
Eric Crabtree: I have always had the view —and we Unisys have the view — that security and great customer experience aren’t mutually exclusive. They can, and often do, work together.
When we think about security in the financial service industry, we think about it in two layers. One is authentication. This means knowing your customers. This means making sure that when an individual is opening an account it is the individual that they are representing themselves to be. First and foremost, security is about getting that right.
“Micro-segmentation allows us to basically compartmentalize that data. So if a member of the staff is looking to serve the customer, they only have access to the information they need. They can’t get access to everything.” – Eric Crabtree
And you can do that a number of ways. We are starting to see biometrics — in the form of facial recognition, voice recognition, and behavioral biometrics — really come to the forefront in that space. I think you’ll see a lot of activity there going forward. We are heavily investing in that, and it’s something that we are wrapping to our propositions within financial services.
Then, secondly, once the data is in the system, how do you protect it when it’s in movement? This can be especially challenging when banks and a lot of the world is starting to move to use public clouds or private clouds or their own data centers. There is a lot of information moving around.
Micro-segmentation allows us to basically compartmentalize that data. So if a member of the staff is looking to serve the customer, they only have access to the information they need. They can’t get access to everything about the customer that may not be relevant to the service that they are providing.
At the same time, we actually protect the data in motion. If its moving between an internal private cloud or public cloud, its not able to be tracked and hackers can’t find endpoints. So, it’s really a two-point approach: first the authentication and then the protection once the data is there.
Loren Moss: Last question. You find yourself in an elevator with a non-technical CEO. He says, “I’ve heard of this Unisys micro-segmentation: What is it?” You’ve got 30 seconds. What do you tell him?
Eric Crabtree: Micro-segmentation is basically the disaggregation of data. We essentially atomize the data and then bring it back together for use based on an employee’s role profile. So they only get access to the information they need to service the customer or the request that they are doing at this time. We make sure that we don’t have all of the information available that might not be relevant and that could be used and transmitted externally.
Loren Moss: So this comes down to a few key protections: If I can’t see the data, I can’t hack it and I can’t accidentally break it and I can’t steal it.
Eric Crabtree: That’s correct. And it not only protects the customer, but it also protects the employee. Because after a breach has happened, sometimes you find out the employees just made a mistake. They’ve exposed some information, but it’s just a human error. So we actually protect both the customer and the employee at the same time.