Blog

Are logins really necessary?

May 10, 2013 by Kevin Christensen — Vice President, Audit, SHAZAM

Banking on the assumption that cardholders often value convenience over security, at least one major issuer has stepped out with a mobile app that gives users access to key account details before asking them to log in.

Proponents of these no-login solutions say this kind of preview not only improves a user's experience; it helps the issuer in two big ways, namely:

moves issuer's card to top-of-wallet position; and
reduces customer service costs (fewer requests into the call center).

Of course, issuers must first decide what information their financial institution (and its cardholders) believes is safe if exposed to the criminal element (keeping in mind that smartphone theft is on the rise).

So long as no sensitive data, such as account or card numbers, is revealed and no transaction capability is enabled on the home screen, the solution is likely viable.

The launch of a no-login solution is an excellent example of a financial institution that has completed a proactive risk assessment and is developing unique controls specific to the risk. Too many in the industry blindly assign controls, like logins, because that's the way it's always been done.

Balancing security with cardholder convenience is always going to be a challenge faced by community banks and credit unions. Yet, with the right combination of diligence, research, and creativity, striking that balance may become just a bit simpler.