According to new research from Cardbeat as outlined in a recent press release, consumers are less
concerned about ID Theft and more confident about their financial institutions
ability to prevent and notify consumers of breaches. Still, a majority (64%) of U.S. consumers still see
identity theft as a growing problem, down from 72% in 2007.
Merchants, processors and financial
institutions have made extraordinary
strides in recent years to authenticate customers and prevent fraudulent
transactions. Much of the decline in concern (or increase in confidence,
depending on how you look at it) has to be given to these institutions and
their response to the market. Still, 64% of the population believes ID
theft is a problem, and one can only infer that that
shows some lack of confidence in general fraud
prevention strategies. Multi-factor online
authentication has become a mainstay, authenticating customers with predefined
questions as well as something they have such as a text to a cellphone or a
cookie in a browser. Thats an improvement, but it stops short of truly
identifying a customer. After all, cell phones are easily stolen and computers
cache are rarely emptied.Merchants and financial institutions should look
to out-of-wallet questions to further authenticate
customers as part of their multi-factor approach. Its
cheap, reliable, and proven effective.
[Contributed by Jeff Davis, President & CEO]
