Virtual StrongBox, Inc.
Now that the Justice Department has found other means to crack open contents of the iPhone at the center of U.S. Government v. Apple, the pressure is off the company to breach its own security. At least it was. After saying would drop the case, the Justice Department filed a letter April 8 with the U.S. District Court in Northern California, stating it needs Apple to mine data from another iPhone – this time for a drug-trafficking case.
This issue is far from over. We’re likely to see it played out in Congress and the courts for years to come with the feds seeking the public’s goodwill on one side, while technology powerhouses like Cisco, Google, Amazon, Facebook and Evernote file a steady flow of amicus briefs on the other.
A tough issue
Apple and its fellow tech believe they have a responsibility to their customers, who expect them to protect their personally identifiable information – just as we do in the financial industry. At the same time, the government thinks it needs access to consumers’ devices to protect the public. Some will say Apple is being stubborn and proprietary; others feel the government’s intrusion on citizens’ privacy would set a dangerous precedent.
Having spent a considerable time as CFO for a financial institution that serve government employees, I’m empathetic to the role data can play in stopping the bad guys. But as the CEO of Virtual StrongBox, Inc., a company dedicated to protecting clients’ sensitive files, I understand the tech industry’s need to safeguard consumers’ privacy, with Apple demonstrating it cares about its customers.
Customer experience vs. enterprise security
This issue has caused me to reflect on a related concern: the balance between security and customer experience. Some IT security experts say you can’t have both. And, given the onslaught of online frauds, breaches and ransomware, security is arguably an enterprise’s No. 1 goal. But with consumers’ demand for mobile banking to meet the standards of other easy-to-use apps, will tighter security kill the customer experience?
Financial institutions of all sizes are feeling the competitive pressure to focus on exceptional customer experience in their digital channels. But those efforts will fail if security procedures keep customers from completing simple transactions. It’s irritating not to have easy access to your bank account when you can buy merchandise from Amazon with a single click or make Southwest Airline reservations in less than 5 minutes.
In their article, “Adapting to digital consumer decision journeys in banking,” McKinsey & Company principals David Edelman and Edwin Van Bommel noted that “with the endless choices consumers have for researching and buying new products and services, all at their fingertips 24/7, digital channels no longer just represent ‘a cheaper way’ for banks to interact with customers. They are now critical for executing promotions, stimulating sales, and growing market share.”
The fact is, as more people use their mobile devices to pay for a haircut or order groceries, the more they feel it should be just as easy to make a bank transaction. Penny Crosman, editor at large for American Banker put it this way: “What customers get frustrated with is if we lock them out of their online banking because they’re using their cousin’s computer on Christmas break, so they’ve logged in from a different state, on a different computer, with a different IP address.”
And while Crosman acknowledges that those same customers aren’t eager to accept responsibility for bank losses, clunky bank apps that require multiple passcodes or tokens makes them “crabby.”
Banks often feel they’re squeezed in the middle because cyber thieves are becoming cagier, more prolific and increasingly diversified in their attacks, while regulators are pressuring them to step up their online security requirements. And customers expect their private information to remain just that:
Eileen Taylor, IBM’s Senior Product Marketing Manager for its Security Services division’s web fraud portfolio (Trusteer), says, “In the era of the consumer, it’s more important than ever to not impact the