Identifying the Best Solution
How many times have you answered, “What’s your mother’s maiden name?” or named your first pet when setting up a new account? Today, those common knowledge-based authentication questions have become the most vulnerable forms of customer identification.
“Predators will prey on front-line staff in the call center, who thrive to provide exceptional service to their members,” says Esser. “They try to acquire sensitive information from the member service representatives that they can later use to take over accounts or create synthetic IDs and commit fraud.”
CULedger worked with decentralized identity organization, Evernym, to build an identification solution that was faster, simpler, and more secure with Hyperledger Indy—a distributed ledger software project that is interoperable with other blockchains or can be used on its own to power the decentralization of identity. By implementing Hyperledger Indy, MemberPass™ (formerly called MyCUID) offers a permanent and portable digital identity that reduces member friction and injects more trust in digital interactions within credit unions.
“Self-sovereign identity will change the very nature of the relationship that companies have with their customers, and I couldn’t think of a more fitting match for this breakthrough than credit unions, who know more about creating strong relationships than just about anybody.” says Steve Havas, CEO of Evernym.
Since the outset, the primary goal for the developers behind MemberPass™ is to hone in and improve the identity validation or authentication process.
“Every interaction a member has with their credit union starts with identifying who they are—whether that takes place in a call center, in the branch, or in an online environment,” says Esser. “Right now all three of those channels have different authentication methods that members use, and potentially multiple third-party vendors are involved as well.”
That all adds up to a fragmented way to verify their member’s personal financial information and it creates easy targets for fraudsters. “It’s a mess,” says Esser. “It’s no wonder we get frustrated as a consumer. We make it miserable to conduct financial transactions.”
With MemberPass™, credit unions can now streamline the initial member identity authentication process across the call center, drive-up and lobby touch points, empowering their members with one seamless way of interacting or identifying themselves with their credit union.
“It’s very key for an individual to own their own identity. The challenge is some of the areas that are the most sensitive where we create usernames and passwords, we use the same passwords we’ve duplicated elsewhere. If you can have a MemberPass and then give the rights to entities to engage with, it’s really going to work better in our digital society going forward,” says Ron Amstutz, executive vice president of Desert Financial CU.
And it works both ways. “We’ve seen members victimized because of voice phishing or vishing,” says Esser, “a method where a bad actor calls a member and impersonates a credit union in order to obtain sensitive information.”
To protect individuals in those scenarios, MemberPass™ boasts a two-way encrypted communication capability. So not only are the credit unions authenticating members. Members can also rest assured that if the credit union calls, it is a real employee on the other end of the line and not a fraudster.
During a pilot program with three credit unions in 2019, initial results for MemberPass™ were promising. Whereas authentication in the call center could take anywhere from 90 to 120 seconds—or sometimes even up to five minutes depending on the transaction—MemberPass™ reduced that process down to 15 seconds or less.
For members who are reaching out to the call center, “the identity authentication process is a lot shorter,” says Esser, “which means that the credit union can improve their call center metrics and operational costs and, most importantly, remove the friction from the member experience. Credit unions can be confident that they know who they’re interacting with, without a doubt.”
Credit unions recognized the advantages of MemberPass™ from the get-go. “Our members are already embracing this new method of authentication and sharing their excitement with our team. We’ve been told that the enrollment process is simple and quick and that they feel more secure when calling into the call center,” says Gordon Howe, president and CEO of UNIFY Financial CU. “We are ecstatic to eliminate friction historically associated with authentication in a way that keeps both the member experience and data security at the forefront of the interaction.”
As an added MemberPass™ benefit, says Esser, “we’re estimating that we can reduce a credit union’s (with 125,000 members) annual fraud expense by as much as $150,000 a year in just the call center channel alone.”
Other use cases for the technology outside of the call center have also surfaced. One participating credit union is working with CULedger on a strategy for issuing new MemberPass™ accounts inside its branch locations as part of their new member onboarding process. Other credit unions have expressed interest in implementing MemberPass™ in its Internet banking channel and its mobile banking channel. More use cases are being defined as more credit unions begin to understand the power of this privacy-enhancing technology.