by Francis Castello, Product Manager, Identity and Authentication Services - APAC Region
According to recent research conducted by Datamonitor, around 27 per cent of 2000 respondents would never arrange any financial product online (ref. Aussies fear online fin services) . This percentage equates to around 4.2 million Australians.
The report noted that "Despite the introduction of more comprehensive security measures such as two factor authentication by the banks, there is still a significant proportion of consumers that does not use internet banking due to concerns about security,". According to Datamonitor financial services analyst Petter Ingemarsson, the issue boils down to "perceived security" rather than the actual security safety nets in place.
One group that represents a particular challenge in converting to the new medium is the over 45 years-of-age category, where there is a major drop-off in the medium's acceptance. It's this older consumer contingent that I'd like to address in this blog post.
So what do banks need to do to address this particular challenge? Now, I don't purport to be a psychological expert, but it seems to me that if we revert to some simple problem resolution basics we're on our way to finding a solution. Without conducting any detailed analysis, I think it would be fair to attribute the resistance by older consumers in embracing the online medium to two key contributing factors. The first is a fear of new technology. In general, the older we get, the more resistant we seem to become in adopting new technologies. The second factor is a fear of the insecurity associated with the Internet. The constant attention the topic of 'online identity theft' enjoys in the media does a great job in propagating the message of insecurity associated with transacting online.
Faced with this challenge, one might also ask, 'why bother with the older consumer segment anyway?' That's what I thought originally, until my 65 year old mum approached me one day and asked me "Son, I want to get connected to this Internet thing; can you help me?". And we're talking here about someone who struggled with the unconventional new-age shape of her brand new bread toaster! Clearly the desire is there. Well, from that point I was convinced. Yes, even the over 45s will convert but the rate of success will depend upon the approach and solution. So how can we address this challenge?
In my opinion, the solution requires the following three key elements:
1. The security solution needs to offer something tangible for the consumer (something the consumer can see, touch, etc.);
2. The security solution must be simple and bullet-proof ; and
3. The security solution needs to offered via a targeted marketing campaign.
In my mind, the first two key elements above can be addressed via the new technology available in the form of a One Time Password generating card form-factor. Traditionally, tokens have offered this functionality but let's face it, these would appear as a foreign object to most of the older consumer generation. On the contrary, cards have been in widespread use for decades (eg. Pensioner Card, Medicare Card, Driver's Licenses, Credit/Debit Cards). Most importantly, the card form-factor generates the OTP code on demand (thereby offering the simplest two-factor authentication experience). This is in stark contrast to the alternative out-of-band solution such as SMS wherein network delays in delivering the access passcode (or which in the worst case scenario never arrive), can lead to a very disconcerting experience for anyone, let alone the older consumer generation.
This leaves us with the last key element for success, which involves a targeted marketing campaign. And clearly any campaign intended to draw consumers into the online realm needs to commence in the physical realm. One option here is via a physical mail-out campaign. A flyer which illustrates and describes the security benefits of an OTP card would offer an excellent draw card to the online medium.
To conclude, I don't believe banks should be abandoning any ambitions to drive the older consumer generation towards the online banking medium. Let's not write them off just yet. I belong to that consumer segment; I'm actually 45!