Gain the Edge in a Risky Online World

By Eric Warbasse

Banks increasingly adding value through identity protection services. Here’s how.

There’s no shortage of bad news on the data breach front. With word of the massive exposure at Equifax, consumers across the country are worried their data may have been stolen. They’re also wondering what they can do to protect their identities going forward. In this era of growing concern about security around personal information, community banks have an opportunity to position themselves on the front line as the safest, most secure vehicle for financial products and services.

Address the emerging issues head-on.

In his role as EVP and director of marketing at Glenview State Bank, in Glenview, Illinois, David Kreiman recognized years ago that the larger issue of identity theft and fraud was poised to grow tremendously. “There were so many things you could blame, such as the fact that everything was going online, but it became obvious quickly that this was going to be a focus point of concern,” he said. Though front-line staff were helpful and knowledgeable about the risks, Kreiman knew the emerging issues the bank’s customers were likely to encounter would require more than a quick, two-minute phone call to fix—and more resources and expertise than the institutions had in-house.

When they see a headline about the latest cyberattack, few people take the time to dig into the details.

“Instead, they call their community bank,” Kreiman said. He believes that tendency represents a clear opportunity to provide customers with support when they need it most. “Frankly, that’s why, when there’s something in the news like a breach, most of our customers know to come to us for advice.”

Seeing it as a niche where they could make a difference, Glenview partnered with a third-party identity management services provider to give the institution—and its customers—quick access to the latest threat and fraud resolution information in an increasingly risky online world.

Other community banks also recognized cyber threats early and cemented relationships that would allow them to be their customers’ go-to advisor.

While serving on the marketing committee for the Iowa Bankers Association almost a decade ago, Penny Gray, CFMP, attended a presentation at an IBA conference that focused on the rising risks around identity theft and fraud. The leadership team at her institution—First Security Bank and Trust in Charles City, Iowa—was already discussing the issue internally.

“Our organization had just begun a strategic initiative to ramp up identity theft and protection, along with an awareness campaign,” recalled Gray, the bank’s vice president marketing manager. Consumer attention was beginning to coalesce around the subject. “There was increasing pressure to get in front of it,” she added. With the latest information in hand, Gray and the rest of team determined the time was right to add identity theft resources to the bank’s arsenal. “Through some discussions, we as an organization decided to offer this at no cost to any of our consumer customers,” she said.

Link value-add products to customer retention, satisfaction.

When news of the Equifax exposure came out, Kreiman leveraged the bank’s quarterly e-mail newsletter to increase his reach into the community—and to help spread the word of the identity management resources Glenview offers.

“We included a link to our website where anyone could find the latest details of the breach,” Kreiman said. “I feel it’s above and beyond what you’ll find at most banks.” Going the extra mile really gets customers attention when they truly need advice and help from people experienced in identity theft and fraud resolution. “Until you actually need it, you don’t necessarily see the benefit of it. But it’s a huge benefit that’s great to have when you do need it,” he added.

Whether a customer has fallen victim to identity theft and needs to know what to do next—or they simply want to learn how to proactively protect themselves against fraud—they’re invariably looking for information.

But one challenge some banks encounter is the difficulty in measuring how—and how much—identity theft resolution services and other value-add products impact customer retention and satisfaction. Despite a lack of hard metrics, Kreiman says it’s an important differentiator for community banks competing in a crowded space. “Every bank offers online banking. They all offer mobile banking and bill pay,” he explained.

Ensure that staff throughout the organization are knowledgeable.

This is crucial in providing customers with the full value of any fraud protection or resolution services. Gray explained, “We keep our employees as educated as we can about what’s going on and how to have those conversations.”

An overview of the available identity management products is included in the new account process. In addition, periodic e-mail blasts remind customers that they have access to fraud protection services. Gray’s team also works to make their identity management resources known to the general public. “It’s about positioning ourselves as a leading provider of identity theft and credit monitoring services,” she said, adding that she strongly believes a partnership with an experienced identity management provider is a significant advantage for community banks.

From a strategic perspective, Gray sees value-added services such as identity protection and fraud resolution as one reason consumers choose to partner with community banks. “It’s all part of that trust and commitment to the customers,” she said.

A comprehensive suite of identity management services provides customers with not only an early warning system to alert them of potential trouble, but also support from identity theft resolution services after a breach, when customers are likely to feel most vulnerable. “That support has certainly been a great thing for a lot of our customers who have been compromised one way or another,” Gray said.

Another area where community banks sometimes struggle is the perception that large institutions offer deeper expertise and more advanced solutions to problems. Incorporating products into the bank’s portfolio demonstrates an understanding of the concerns customers face. “These services are a way for a community bank to show that we do have this type of sophistication,” Gray said. Rather than turning to a big bank for next-level services, customers know they can rely on their long-standing relationship with their community bank if they need help. “We can put you in touch with someone live,” Gray said. “We can connect you with an expert and get you the assistance you need whenever you need it.”

The Equifax data breach exposed detailed information about 143 million Americans, including names, Social Security numbers, birth dates, driver’s license numbers, and addresses. An additional subset of files also included the theft of credit card numbers and other personal identifying information.

With over half the American population more vulnerable to identity theft now than ever, banks are helping consumers in three important ways:

First, banks are minimizing customers’ exposure to cyber risk by providing education about risks and advice about protecting themselves.

Second, many banks offer services that monitor customers’ personal information—not just bank account activity–to alert for possible fraud.

And third, banks are helping customers manage the damage to their identity, privacy, and security from fraud, with personal advocacy by identity theft resolution experts.

Eric Warbasse is a senior director at CyberScout, the leading data security and identity theft protection firm. CyberScout’s DataRiskStages recently earned the ABA’s endorsement for its comprehensive pre- and post-data breach services. Warbasse previously spent eight years leading the financial services and breach response teams at LifeLock, and has over twenty years of management experience, including five years as an officer in the U.S. Marine Corps. He collaborated with writer Julie Knudson on this article.