Expanding financial inclusion to fight poverty, pandemic (Part 2)

AS discussed in an earlier column ( Tech Space, July 19, 2020), the coronavirus pandemic has the unintended benefit of WIDENING THE fiNANCIAL INCLUSION net by allowing low- income households and small businesses access to alternative financial channels, like automated teller machines (ATMs), mobile money, financial technology services and online banking. The heightened appreciation of these NONCONVENTIONAL fiNANCIAL PLATforms would certainly increase the range of potential customers to include those “hard-to-reach” people operating in the underground economy.

Hopefully, the trend would lead to a bandwagon effect that the banking industry and its clientele would have to deal with in a number of ways. Foremost is the fact that the initial engagement usually with ATM withdrawals and online payments should be a rewarding one so as to sustain patronage, especially BY fiRST-TIME USERS.

The thing is, the expanded SHIFT TO DIGITAL fiNANCIAL SERVICES has also unsurprisingly increased the attention of online predators. In such a situation, it becomes a major responsibility of banks and financial institutions to ensure that their digital infrastructure is available 24/7 with necessary safeguards against cybercriminals. Otherwise, once burned, the disgruntled customer would express his dissatisfaction on social media AND THE GROWING CONfiDENCE ON digital platforms could get nipped in the bud.

In a research announcement, Moody’s Investors Services acknowledges that fraud against banks’ digital customers arise via phishing emails or social engineering scams. In addition, work-from-home bank employees WHO ACCESS OFfiCE NETWORKS SHOULD always bear in mind that they are more likely to be or become infected with malware or spyware since unsecure home Wi-Fi networks may use routers with weaker security.

Moody’s suggests three ways to mitigate cyber risks from the bankers’ perspective. First, a strong corporate governance, including cybersecurity frameworks, policy enforcement and reporting should be established. Second, risk prevention and response, and recovery readiness must be in place. And third, an informationsharing link with other banks, as well as an adoption of international standards and regulatory oversight should bolster every bank’s cyber-readiness.

The customers of digital services themselves, whether greenhorn or experienced, should likewise be responsible users. On its website, the Bankers Association of the PHILIPPINES RECOMMENDS fiVE WAYS regular Juans could safely transact BUSINESS USING DIGITAL fiNANCIAL services, as follows:

– Protect your passwords by creating strong passwords and changing then regularly

– To check your bank account, use a private and secure network, and not a shared network or a shared computer

– Apply two-factor authentication by providing two pieces of evidence on your password to prove your identity

– Download your bank’s mobile app so you could regularly monitor your account and flag unauthorized transaction as soon as it happens

– Be wary of “smishing” schemes where another entity masquerades as your bank and request for your account and PIN numbers.

The new normal instigated by the pandemic will serve as a tipping point for banks and financial institutions to magnify their social responsibility in TERMS OF fiNANCIAL INCLUSIVENESS among the most disadvantaged sectors of society. At the same time, by protecting their customers toward a worthwhile online experience in a time of physical distancing and quarantine, the banks ensure their sustainability beyond the pandemic.