Restoring Confidence in Financial Services with Identity

We’ve seen a lot of turmoil in the global banking system in recent weeks. Several near-simultaneous failures in the U.S. and Europe have rattled public confidence in banks and financial institutions, according to at least one recent poll. For the average consumer, the old mattress might be looking like a more appealing place to stash their savings until things stabilize.

In this challenging environment, financial services providers need to get strategic if they want to retain their existing customers and earn the trust of new ones. They also need to fully understand the reasons behind recent events if they want to avoid similar crises in the future.

No, it’s not 2008 all over again

For many of us in financial services, the current climate triggers memories of the credit market crashes of 2008. Back then, the perfect storm of subprime lending failures, liquidity issues, and instability across non-traditional banks clobbered the sector. Our industry experienced mass layoffs and a major economic downturn, and many firms closed their doors forever.

But there are plenty of reasons to think 2023 won’t be a repeat of 2008. For starters, regulations have been strengthened. The crisis of 15 years ago ultimately led to new legislation that enhanced controls and oversight of the industry. The liquidity on capital ratios of "too big to fail" firms also increased dramatically, providing more financial cushion should history ever try to repeat itself. 

There have also been incredible advancements in technology since 2008, changing the very nature of how people transact and communicate. These innovations present many new opportunities—and challenges—for the financial sector.

• Information now spreads instantly. In this digital age, any news that might impact customers’ banking decisions can quickly spread around the world. An errant tweet or two can catch fire and reverberate globally within minutes. Given this new reality, banks and their executives need to be exceedingly cautious with their words and actions if they want to avoid going viral for the wrong reasons.
   
• Customers can move money quickly—and digitally. When uncertainty arises, you won't see long lines in front of bank branches like you did in 2008. Instead, most consumers today have the ability to move their money instantaneously, all from the comfort of their couch. Welcome to the world of open banking and an open economy, new approaches that have brought incredible convenience for consumers. They’ve also raised the bar for banks, as customers can now easily move their money from one institution to another. So if you lose their trust and confidence, you’ll more likely lose their loyalty, too—maybe forever.

Surviving and thriving through consolidation

Finally, the landscape of the industry itself looks drastically different than it did in 2008. Many traditional banks have turned to mergers and acquisitions as a way to stay competitive against a backdrop of rapid technological change and the rise of fintech companies. By combining resources, banks can achieve economies of scale and offer customers a wider range of services, faster and more efficiently. 

However, M&A can also present significant challenges, particularly when it comes to managing identities and access. When two companies merge, there can be a lot of overlap in terms of IT systems, applications, and data. By adopting a “one-identity strategy,” these financial companies can enable both their workforce and customer IAM programs to be more efficient, while maintaining the highest levels of security and compliance.

With a single source of truth for identities, companies can: 

• Ensure their workers and customers are granted the right level of access and privileges
• Reduce the risk of security breaches and data leaks
• Achieve compliance with regulatory requirements
• Utilize identity as a way to drive business growth and revenue

That’s why many financial services customers have chosen Okta’s Customer Identity Cloud (CIC) for their one-identity strategy. With CIC, organizations can easily manage workforce and customer access via powerful admin dashboards, with low/no code pre-built integrations to thousands of applications. CIC lets you unify all of your financial products and services through a secure and seamless user experience, reducing friction while simultaneously protecting your customers’ data and financial portfolios with anti-fraud, ID proofing, and non-phishable authentication methods.

The risks of business as usual

While it’s important to be strategic about managing your customers’ identities and access, the same is true for your workers. After all, your workforce, and specifically ensuring they have the right access to the right systems at the right time, is critical to the health and longevity of your business. One bad actor, one breach of access, or one toxic combination of privileges could be devastating to your firm, and could lead to fines, public scrutiny, lost customers, or worse. 

Are you still managing application or end-user access in various business units without consistency or automation? Are you still using manual controls, which are prone to human error and have proven ineffective in combating insider threats and toxic combinations of access?

If so, consider upgrading your workforce Identity program to Okta's Workforce Identity Cloud (WIC). With WIC, you can:

• Enable adaptive MFA across all your business applications with Single Sign-On
• Automate identity lifecycle events to provision or de-provision access
• Unify your on-prem, cloud, and multi-cloud applications under a single identity provider for your entire workforce
• Experience rapid onboarding with over 7,000+ pre-built integrations driven by low/no-code administration, reducing your TCOO significantly in hours and days, not weeks and months
• Support effective and sensible access reviews for identity governance without overburdening end users and managers with unnecessary complexity

Be prepared with a modern identity strategy

The troubles in the banking sector over the past few weeks are just the latest challenges facing the financial services industry. As more and more banks struggle to stay competitive, managing identity and access will become critical for your business’s survival and growth. At Okta, we’re proud to offer both workforce and customer identity solutions built to meet the demanding needs of the banking industry of today—and to withstand whatever new challenges may come tomorrow. Learn more about Okta’s identity and access management for financial services and find out why leading banks, insurers, advisors, and exchanges trust Okta for identity.