Commentary: Don't hinder online account protection
File photos / Jim Neuger
Jim Roche, left, is president of the Maine Bankers Association; Steve deCastro is president and CEO of Gorham Savings Bank.
At a time when online cyber fraud is a growing risk and bank customers are increasingly demanding extra protection for their account information, legislators in Augusta are considering bills that might force banks and other financial institutions to stop using important online safety tools like voice recognition, fingerprints and facial recognition. This is a step backward.
Trust and security are at the core of services banks provide their customers. Generations ago, this meant bank vaults and steel doors. Today, most bank robberies happen online through a computer. Strong data security means investing in cutting-edge online data protection and information technology infrastructure.
One of the most impactful online protection tools banks use is multi-factor authentication using biometric identifiers such as voice recognition, fingerprints, and facial recognition. Use of these protections is much stronger than passwords alone. That’s why customers are demanding it.
Unlike many social media companies, banks simply do not use customer information to target consumers with online advertisements. Nor do banks sell or share customer information. In fact, they’re expressly prohibited from doing so by federal law. Protecting customer privacy is at the core of banks’ relationship with customers.
This helps explain why more than 8 in 10 Americans (84%) say they’re “very satisfied” or “satisfied” with their primary bank, and 94% rate their bank’s customer service as “excellent,” “very good” or “good,” according to a recent survey conducted by Morning Consult.
Legislators have articulated prudent concern for protecting personal information online, but including banks in such legislation is misdirected. Banks are already heavily regulated at the state and federal level by the Federal Deposit Insurance Corp., the Maine Bureau of Financial Institutions, the Consumer Financial Protection Bureau, the Federal Reserve System, the Office of the Comptroller of the Currency, and others.
Without a full Gramm-Leach-Bliley Act exemption for banks from this legislation, some may be forced to offer less account protection for customers. That means some banks won’t offer fingerprint scans, or voice or facial recognition protections. That will leave customer accounts more vulnerable — exactly what bank customers want to avoid. Legislators should not force banks into weaker data protections for customer accounts.
The same legislation under consideration in Augusta would also put the state out of sync with the rest of the country, meaning Maine residents could be denied access to financial services available elsewhere, or would experience a lower standard of online security.
The small business loans, home mortgages, college funds, and deposit services that Maine’s 30 retail banks provide to customers in virtually every community — secured by strong cyber protections including voice recognition, fingerprints, and facial recognition — are critical elements of what makes the state such a vibrant place to live and work. We hope legislators recognize that limiting consumers’ strong online account protection is not in anyone’s interest.
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