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PRODUCT GUIDE

Five Considerations for Offering Identity Theft Protection

Rising consumer expectations accelerate banks’ adoption of innovative fintech solutions that enhance their customers’ digital experiences, solidify relationships, and offer new opportunities for revenue growth. Technologies that increase a customer’s sense of security have gained top of mind with many community banks and credit unions.

With rising risks and changing consumer expectations, community banks and credit unions can position themselves as trusted leaders in protection by implementing identity theft protection technologies for retail customers. This article presents five benefits of offering identity protection services for community banks and credit unions that are evaluating whether to provide these services.

Identity Theft Reports in the US, 2014–2023

01

ID protection services combat rising ID theft

Research combined with anecdotal evidence indicates a rise in identity theft across the United States. With fewer consumers carrying cash, the potential for cybercrimes has risen exponentially in post-pandemic times. ID theft has surged, with the shift toward digital platforms resulting in increased identity theft from cyberattacks. This recent graphic from the Federal Trade Commission (FTC) highlights the growing incidents of ID theft within the United States.

$10.3B

Cost from cybercrime losses
in 2023¹

1.4M

Consumer identity theft reports received by the FTC in 2023

$2.7B

Cost in losses from imposter scams in 2023²

$311M

Cost in losses from consumer online shopping fraud in 2023³

According to the FTC, in 2023:

Losses from cybercrime, including identity theft, have cost Americans $10.3 billion.
The FTC received 2.6 million total fraud and identity theft reports, 1.2 million of which were consumer identity theft cases.
$2.7 billion of losses came from imposter scams, and $397 million resulted from consumer online shopping.

The problem of identity theft continues to grow dramatically in the US. It is difficult for consumers to stay on top of identity breaches, as theft methods are becoming increasingly sophisticated. The growing prevalence of identity theft calls for sophisticated identity protection technologies to reduce consumer losses.

02

Identity protection services build trust

Banks and credit unions often fill the role of trusted advisors to their retail customers who place their savings and monetary relationships with their go-to financial services provider. ID theft protection becomes a natural extension of this role and, in some cases, an expectation, as consumers prefer a known, local entity providing this service versus an online provider with little or no brand recognition.

Trust becomes one of the key drivers in providing helpful financial services. ID theft protection is a natural offering from the organization that funds a loan, provides a credit card, or offers a CD for a college fund. Trusted services from a reliable advisor support the feeling that an institution focuses on the consumer’s best interest. Successful banking relationships have always been about creating trust.

Happy sincere young businesswoman with a warm friendly smile

The timing of when to offer ID theft protection can often dovetail with a major financial event of a banking customer. For example, applying for a mortgage entails much personal disclosure that can unsettle a consumer. The financial institution providing ID theft protection during the loan application process can go a long way to furthering its role as a trusted advisor.

An extension of building trust is looking out for the customer – helping to build the right habits and ensuring they are on the best path from a financial point of view. Offering identity protection services indicates that you look out for your customers' best interests in every area of their finances.

03

Identity protection improves customers’ digital experiences

As financial institutions expand their digital relationships to create an engaging customer experience, they should consider the following: If the institution provides helpful guidance and meaningful interactions, it strengthens the digital relationship, and that’s a direct line of benefits returned to the financial institution.

Only 11% of bankers said they provide excellent customer service online, according to the BAI's Banking Outlook: 2024 Trends report. This survey focused on identifying top priorities for the upcoming year, with digital experience high on the list. The report also demonstrated that 40% of customers would switch to a different financial service organization for better digital capabilities. Banks and credit unions must invest in digital offerings for both their mobile banking and online products.

The need to invest in digital offerings will only grow as new generations choose financial institutions. About 60% of Gen Z consumers would switch financial services for better digital capabilities. These younger consumers also seek secure solutions, as becoming a victim of fraud ranks high on their list of concerns. Financial institutions that can provide digital solutions that improve banking experiences and offer security can position themselves for success.

When institutions partner with an identity theft protection provider, they can easily offer services to enhance customers’ digital experiences. At the same time, these partners should enable bankers to brand ID theft protection as their own, reinforcing to customers that their bank or credit union provides a broad range of leading financial services.

04

Identity protection grows relationships

ID theft protection, by its very nature, provides a financial institution increased contact with customers through alerts and informational updates. These communications not only cement relationships but create an additional channel to make appropriate cross-sell offers of additional banking products. For example, when an alerted customer visits the institution’s website, a relevant offer for a new financial product can greet them.

Bank and credit union customers expect more personal engagement from any digital partner, including their financial institution. In fact, many customers wish banking providers were more proactive in engaging with them — like other types of service providers, as demonstrated in this finding from the Boston Consulting Group.

The bar has been raised by these and other online service providers, and ID theft protection helps secure and retain customers by meeting expectations for relevancy and timeliness.

05

Choosing the right ID theft protection matters

Banks and credit unions should do more than implement a basic identity theft protection service. These financial institutions need a comprehensive solution that offers a seamless experience for customers. Digital products should be easily integrated with an ID theft protection offering that provides open banking integration based on API technology. As previously noted, this offering should allow the financial services provider to rebrand the service entirely as its own offering, allowing the consumer to maintain positive impressions of the product set.

ID Theft Protection should contain certain baseline capabilities such as:

ID Theft
Insurance

If bank or credit union customers experience identity theft, the institution should be able to offer monetary protection from any fraud that may occur. This insurance provides the coverage necessary to recover from identity theft and instills greater customer confidence in a financial institution.

Ease of
Launch

A financial institution’s partner in offering ID Theft Protection should provide a proven and swift product implementation methodology allowing the provider to minimize installation time and their own resources.

Dark Web Monitoring

A scan of the entire online landscape ensuring a thorough search for fraudulent use of a customer’s data across the web.

Get started with Array's Identity Protect.

Identity theft protection solutions for banks can reduce identity theft, build trust, improve digital experiences, and grow relationships. Gain a seamless, effective, and innovative identity protection product containing all the features you need with Identity Protect from Array. Contact us to learn more about our solution and what it can do for your financial institution.

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Five Considerations for Offering Identity Theft Protection

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