Balancing Security and Seamless Experiences



In an era where digital transactions and online banking have become the norm, financial institutions find themselves at a critical juncture — they must strike a delicate balance between robust security measures and a seamless user experience.

Preventing scams and fraud is paramount to protect both the institution and its customers, but introducing too many security barriers can frustrate users and hinder the efficiency of everyday financial interactions.

Finding the right balance between safeguarding against malicious actors and ensuring a smooth, frictionless experience for genuine customers is a complex challenge that demands innovative strategies and technologies.

This delicate balancing act is not only essential for building trust and preserving the integrity of financial institutions but also for delivering the convenience and accessibility that modern consumers increasingly demand.

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It’s well documented that personalisation plays a pivotal role in creating seamless customer journeys. But what role does it have in ensuring digital security for banking customers? How can the basics of personalisation be used to create experiences that encourage fraud detection and prevention, while simultaneously creating engaging and delightful experiences?

Global Banking Fraud Landscape

The state of fraud in the banking industry has become increasingly concerning in recent years, with a significant surge in fraudulent activities. According to SEON’s Global Banking Fraud Index 2023, the global neobank market witnessed remarkable growth, with its value rising by nearly $20 billion in 2022. This substantial expansion of the neobank sector has also attracted the attention of fraudsters looking to exploit vulnerabilities in these emerging financial institutions.

In parallel with the growth of neobanks, SEON’s report highlights a worrying trend in card fraud across the financial sector. In 2022, approximately 36% of all financial institutions reported incidents of card fraud, marking a troubling 26% increase compared to the previous year. This sharp rise in card fraud underscores the ever-evolving tactics and sophistication of fraudsters, who continue to find innovative ways to compromise the security of banking systems and exploit unsuspecting customers.

As the financial industry continues to embrace digital innovation and online services, combating fraud remains a paramount challenge that banks and financial institutions must address to protect their customers and maintain trust in the industry.

How are regulators responding to the increase in fraud?

Regulators around the world have been responding proactively to the alarming increase in fraud attacks targeting the banking industry. Their efforts are aimed at safeguarding both financial institutions and consumers from the growing threat of cybercrime. Here are some key ways in which regulators are addressing phishing attacks in banking:

  • Strengthening cybersecurity regulation

Regulatory bodies have been enhancing cybersecurity regulations for financial institutions, mandating stronger security measures to protect against fraud. These regulations often include guidelines for multi-factor authentication, data encryption, and regular security audits.

  • Incident reporting requirements

Many regulators now require banks to promptly report any data breaches and security incidents, including phishing attacks. This enables regulators to monitor trends, assess the impact of attacks, and provide guidance on incident response.

  • Customer education mandates

Some regulatory bodies require banks to educate their customers about phishing risks and how to recognise phishing attempts. These educational efforts aim to empower customers to protect themselves and report suspicious activity.

  • Penalties and fines

Regulators have the authority to impose significant fines and penalties on financial institutions that fail to implement adequate cybersecurity measures or do not report security breaches in a timely manner. These penalties serve as strong incentives for banks to invest in fraud prevention tactics.

Why is preventing fraud so important for banks?

Banks need to ensure customer’s digital security for several compelling reasons:

  • Trust and reputation

Trust is the foundation of the banking industry. Customers entrust their money and sensitive financial information to banks. If a bank fails to adequately protect this data and its customers experience fraud or security breaches, it can erode trust and damage the bank’s reputation, potentially leading to customer attrition.

  • Legal and regulatory requirements

Banks are subject to a myriad of laws and regulations that mandate the protection of customer information and assets. Non-compliance can result in significant financial penalties and legal consequences for the institution.

  • Financial Liability

In cases where customers suffer losses due to security breaches or fraud, banks may be held financially liable if they are found negligent in their security measures. This can lead to costly litigation and compensation payouts.

  • Customer retention

Ensuring security is not only about protecting against threats but also about retaining customers. If customers perceive that their financial institution does not prioritise security, they may seek alternative banking options that they perceive as safer.

  • Competitive advantage

Banks that invest in robust security measures can use this as a competitive advantage. Customers are increasingly considering security as a key factor when choosing a bank, so institutions that prioritise security can attract and retain more customers.

How can banks use personalisation to help customers prevent and avoid fraud?

Select the right channel

Select the right channels

Personalisation enables institutions to communicate with customers through secure channels and methods they prefer, reinforcing trust and making it easier to verify the legitimacy of communications.

Detect risky transactions

Detect risky transactions

Personalised risk assessment models can detect anomalies in spending patterns or transactions’ locations and trigger real-time alerts or additional authentication steps when necessary, effectively thwarting fraudulent activities.

Personalised fraud alerts

Personalised fraud alerts

Monitoring systems can generate personalised alerts and actionable notifications that are highly relevant to individual users. This includes transaction alerts for large or unusual purchases, duplicate transaction notifications, and timely account activity summaries. When users receive these insights, they are more likely to notice and report any unauthorised activity promptly, helping to mitigate fraud.

Fraud education

Educational tools and tips

Banks can aim to make fraud prevention education an ongoing effort and adapt their strategies to address evolving threats and technologies. Using in-app contextual educational messages can empower customers with knowledge and tools to help reduce the risk of fraud and create a more secure banking environment for everyone.


Engaging challenges and games

Incorporating in-app challenges and games is an innovative and engaging way for banks to prevent fraud. By turning fraud prevention into an interactive experience, banks can educate their customers about security risks and best practices in a fun and memorable manner. For instance, customers can participate in quizzes or games that teach them to recognise phishing attempts or identify suspicious transaction patterns.


Through the tailoring of digital services, communication channels, and security measures to individual customer needs and behaviours, banks can forge seamless and secure experiences that strengthen trust and mitigate fraud risks.

Personalisation enables institutions to foster deeper connections with their customers, empowering them with the tools, knowledge, and support necessary to protect their financial well-being.

The integration of personalisation not only enhances the user experience but also fortifies defences against scams and fraud by aligning security measures with individual preferences. In an era where digital threats continue to evolve, personalisation emerges as a critical strategy for the financial industry, offering a path forward towards a safer, more resilient, and customer-centric future of banking.

As banks continue to harness the potential of personalisation, they can lead the charge in redefining the banking landscape, ensuring that every interaction is not only seamless but also safeguarded, for the benefit of both institutions and their valued customers.

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