The dramatic increase in remote interactions with consumers over the past few decades has presented financial institutions – credit unions included – with the growing challenge of determining how to quickly and safely authenticate their members and customers. While online contact channels have made significant progress in improving authentication, phone channels continue to lag behind, with many organizations still subjecting callers to time-consuming and unsafe identity interrogation.

Many credit unions, whether they contract with a call center or use in-house staff, ask members to prove they are who they say they are by demonstrating knowledge of private information, such as their mother's maiden name and Social Security number. This knowledge-based authentication (KBA) method takes time and members dislike having to answer these identity questions every time they pick up the phone, especially if they have to go through the process more than once for the same issue during the same call.

When they call their credit union, they just want to have their questions answered or problems solved, without having to jump through hoops. What's more, the interrogation procedure – asking, essentially, "Do I know you?" – is often at odds with the atmosphere of trust that local credit unions try to create with their members.

Considering the constant threat of data breaches, scams and identity theft, information security is more important than ever. But inefficient KBA procedures, in addition to being time-consuming and frustrating to callers, are not the most effective way to prevent fraud. Unfortunately, it is not that difficult for a skilled and patient fraudster to gain access to the necessary information to impersonate a legitimate member, sometimes while spoofing the individual's phone number to make the crime even more difficult to detect.

Clearly, a better type of authentication is needed – one that is more effective at identifying trusted callers and also makes the entire process more pleasant for legitimate members, who make up the vast majority of callers.

So how can credit unions increase the effectiveness of their fraud-fighting efforts while at the same time improving the member experience?

Let's take a look at the two ways besides KBA that a contact center can authenticate a member: Inherence and ownership.

An inherence-based approach authenticates a member through a biological measurement of unique traits such as facial recognition, a fingerprint or, in this case, the caller's voice. Voice-biometric authentication is the only inherence authentication available to call centers. Voice-biometric systems compare a caller's voice to a previously enrolled recording of the account holder to make an authentication decision.

Biometric voice authentication processes are promising, and will be one of the ways callers are authenticated in the future. But today, there remain several sizable roadblocks to widespread adoption. It is a lengthy and sometimes impossible task for contact centers to gain the permission and recording from their entire base of members. This is because many companies and state laws require members to opt-in before voice recordings can be utilized for authentication, which can mean years of investment from credit unions. Lastly, voice-biometric systems require members to talk for a period of time to work, and that can be challenging in self-service interactive voice response systems, forcing more and more calls to costly agents.

Another method of authentication in use by many of the largest financial institutions in the country is ownership authentication. Here, members can be authenticated through a physical object that the member exclusively owns, such as their debit card, computer or phone. With a phone, legitimate calls from the actual member's phone can be separated from suspicious calls by examining the connection within the global phone network between the caller and contact center.

One benefit with this approach is that callers are automatically authenticated before their calls are answered; the process requires no action from the member and it is virtually invisible to the caller. This results in an immediate 100% participation rate without negatively impacting the member's experience, as with other methods. It encourages callers to self-serve and also guarantees protection against spoofing, hacking and burner phones by verifying the integrity of the call being made.

Authentication through ownership is proving to be an effective system of authentication that provides a high level of security without subjecting members to lengthy interrogations. It can reduce dependence on KBA and provide an easy solution for multi-factor authentication.

Automatic caller authentication that allows trusted callers to bypass stressful identity interrogation and voice biometrics offers a variety of benefits. First, it results in faster service and significantly improves the member experience, thus increasing member satisfaction. Reducing reliance on identity interrogation – which is generally unpleasant for both parties – also improves employees' job satisfaction and allows them to spend more time on more meaningful work: Actually answering questions and helping members solve their problems sooner. What's more, faster service results in lower costs for credit unions (whether outsourced call center or in-house staff are used) allowing them to focus their resources on serving their members. If that weren't enough, automatic caller authentication is the most secure method too.

In today's world of ultraconvenient digital transactions, the awkwardness and inefficiency of the phone authentication process stands out. There are better solutions – ones that more effectively protect member account security and improve member relationships.

Patrick Cox

Patrick Cox is CEO of TRUSTID. He can be reached at 503-715-0851 or [email protected].