In today’s world, digital banking is the new normal. Customers expect seamless journeys from start to finish that includes access to as many services as possible. This leaves banks tasked with maintaining the delicate balance of meeting customer demands and establishing trust through a high level of data security and regulatory compliance.

To learn more about the challenge of establishing trust, Payments Journal sat down with Jose Caldera, Chief Product Officer at Acuant, and Tim Sloane, VP of Payments Innovation at Mercator Advisory Group

The rise of digital banking

Digital adoption in finance has been fast and furious with more options than ever before, and for good reason. Digital banking offers plenty of value to consumers, serving as a one-stop shop for money management and payments. It also boasts more options than ever before. Neobanks, challenger banks, and open banks have flourished in the digital realm, and COVID-19 will make that shift more permanent.

“Everything has become more digital and everything has become more online, especially after a year of going through this pandemic. There is certainly a need to service clients that are looking for a different experience,” said Caldera.

Additionally, the younger generations of adults are digital natives, meaning they have higher expectations for digital services. “I think [the adoption of digital banking] has been a combination of the evolution of technology and also the expectations of users and [the] user experiences they want to have,” he added.

Data security is paramount when it comes to digital banking. “It goes without saying that whatever [data a] digital-native user has given to the company or the financial institution, their expectation is that it’s safely stored and properly protected against hackers,” said Sloane.


Keeping customer data safe through open banking

Consumer expectations surrounding their customer experience are not the only things that have evolved. A new pattern of consumer trust is also emerging. According to Forrester, consumers are past wanting piecemeal privacy management tools. Instead, they are flocking to companies that integrate trust as a corporate strategy.

Open Banking is a system in which users’ personal and business data can be shared securely between banks and applications and keeping customer data secure is crucial to establishing and maintaining trust. “There [is] a combination of strategies that you’re seeing better adopted [by] digital banks when compared to traditional financial institutions,” said Caldera.

Onboarding customers digitally is now the norm. By adopting trusted technology, such as identity verification and know your customer (KYC) tools, open banks can ensure that their customers’ data is safe during onboarding and beyond.

“There is a whole set of new technologies that have put the owner more in control of the data, as to what data can be shared. And I think that digital banks have taken a better approach than traditional financial institutions, where data exists in so many places,” Caldera added.


Challenges of onboarding customers online

The biggest challenge when onboarding customers online is maintaining the balance between a seamless customer experience while remaining secure and compliant. Even though consumers want access to as many services as possible, they can be hesitant to share their personally identifiable information (PII).

“From the financial institution perspective, you have on the one side the requirements from user experience, ready-to-access services and then in the back end of that you have the regulatory and security requirements,” Caldera said.

Financial institutions need to capture personal data in order to grant consumers access to the services they are looking for. At the same time, FIs must comply with a growing list of regulations, including anti-money laundering (AML), GDPR (the EU’s General Data Protection Regulation) and other privacy laws. Solutions that manage security through features such as transaction monitoring, KYC, and risk screening can help FIs remain compliant.

“From a broad brush perspective, it’s the compliance officer’s job to primarily say ‘no’ if there’s any risk associated, but it’s obviously the management’s challenge to be able to remain competitive in the market,” explained Sloane.

How Acuant establishes customer trust

According to Caldera, Acuant enables a risk-based approach favored by regulators to assess customer onboarding and behavior. “We’ve embedded our belief of trust into what we do, and that’s our DNA. How do we make sure that when you are doing business with someone, you can actually trust that you’re doing business with the right person?”

With that belief in mind, Acuant created a framework that assesses customer identities by asking the most important questions to establish and maintain trust:

  • Is this a real person?
  • Is this person who they claim to be?
  • Can I do business with this person?
  • Should I do business with this person?

The idea behind this framework is that banks are going beyond simple identity verification to truly understand whether they should do business with someone. Acuant’s platform answers these questions during onboarding, while allowing banks to continuously see user behavior, monitor that user, and re-verify that user’s identity in other instances.

“It’s a much more comprehensive view of what those identities and [who] those users are,” said Caldera. “We’re thinking about a comprehensive framework that allows us to measure trust at the beginning, the middle, and the end of that relationship.”


Establishing customer trust in the era of digital and open banking can be challenging, but it is nonetheless crucial for banks to remain competitive. By deploying the right security tools, financial institutions can rise to the challenge.