In the present day, the fast-changing digital landscape has a huge influence on how banking and debt collection take place. The bank is now a portable entity that you can carry around on your phone, and the process of collecting dues can be simplified similarly. However, while this makes several aspects of banking, such as loan consolidation, more accessible to us, it also requires users to pay more attention to aspects of security, encryption, portable identity, and more rigorous KYC. In this article, I will walk you through some of the new challenges and coalitions that digital banking poses.
What are some of the challenges posed by digital debts?
Several aspects of debt repayment have been simplified through online banking. Users can easily set up their profiles and create schedules for their repayments. This requires minimal involvement from the user once the initial setup is done. However, there are some issues we have to take into consideration.
- Identity theft: This is a pressing and rising issue that is prevented with online banking and people’s social security numbers. Some scammers and poachers engage in targeted cyber attacks to compromise banking systems and security for the purpose of stealing not just money but also identity.
- Accessibility barriers: Online banking might be difficult for several elderly folks who might not be so well versed with the technology. This makes them vulnerable to several security issues. It is necessary for banks to educate their elderly and less technologically proficient customers to navigate the system safely.
- Service interruptions: technological glitches are bound to happen with an increased number of contactless transactions. As wearable payment devices become more and more in vogue, the changes in eros are also increasing. These glitches can range from simply a payment not going through to a large amount of money being frozen or intercepted. System downtimes can cause great amounts of monetary loss, and they require quick and point solutions from customer service and technical teams.
What solutions can we implement?
- Data encryption: It is necessary for banking apps to adhere to the latest industry standards for encrypted data. This is to prevent any unauthorized access from taking place. All intimation regarding the loan drawn should remain between the borrower and the creditor only.
- Firewall protection: banks are some of the most frequent targets of cyber attacks. Password and security pin thefts occur widely, and there are institutions that run solely for the purpose of scamming people out of their accounts. That’s why it is necessary to have robust firewalls in place to counteract any such attacks.
- Secure passwords: Users should maintain a highly secure password for their banking information with regular updates. Most banking apps will ask users to change their pins and passwords after 3 months. Generally, this is compulsory as the pin expires after a while. This can help make sure that you keep updating your access, thereby making your accounts harder to intercept.
- Two-factor authentication: Another crucial way to ensure that passwords and banking info are always protected is to enforce two-factor authentication.
Summing Up
In essence, consumer behavior has changed rapidly as banking and debts have become more and more contactless. People prefer online transactions to physically making their way to branches. However, this comes with its own set of security education that needs to be made publicly accessible. Banks should take the initiative to educate their consumers on the correct and safe practices of online and digital debt consolidation. As fintech inventions and innovations become more and more advanced and commonplace, consumer bases and behavior will become more informed and empowered.