As PSD2 approaches, big changes for the financial landscape become more imminent. The importance of a clear identity management that reduces the risk of fraud and ensures a frictionless transaction is key.
A new whitepaper, Strong Customer Authentication in Practice – limitations and possibilities with PSD2, has been released by Norfico Fintech Consulting and Consult Hyperion on behalf of identity solutions company, Signicat. It gives some insights and perspective on how value can be driven from PSD2. The Whitepaper argues that the growing demand for frictionless transactions by using mobile and wearable devices calls for innovation and creative solutions that give costumers the experience that they are looking for. Moreover, open API’s imply that several parties will be sharing sensitive information about customers; this demands a good and clear identity management that reduces the risk of fraud.
A good way for banks to deal with the new business models and entities that PSD2 creates, is to have a strong digital identity scheme that ensures a clear information flow, and provides an experience that keeps up with the customer expectation. Banks that are successful in transforming the new identity requirements into revenue and innovation are the banks that will succeed in the future.
The document dives into how the Nordic counties have been pioneers in Strong Costumer Authentication (SCA), and how it helps to create frictionless on-boarding methods for banks that reduce risks and are becoming the new standard of customers. It also explores how how Two Factor Authentication Process has being implemented in order to provide a smooth and safe relationship between the customer and the bank.
The Whitepaper also introduces Digital Identity Service Providers (DISP) as a viable solution for assuring a flow of information that works along with SCA and regardless of national or geographic identity. Finally, the document stresses that being able to offer a good SCA experience will be a strong parameter for customers to decide which bank they choose.
If you want to download the executive summary of the whitepaper, please click here.
