ASX digital lenders prioritise client safety amid shift away from cash - Part 1

Organisations increasingly working to stay ahead of scammers and protect identity and funds of their customers
Wisr has a free credit score checking service on its app, notifying users of activity on their credit file
Harmoney says it has a comprehensive set of cyber security policies in place and stringent measures to secure customer data

Australia, like much of the Western world, is becoming an increasingly cashless society with much of our financial transactions done digitally.

In 2007, around 70% of consumer payments were made using cash but in 2022, the Reserve Bank of Australia (RBA) found that figure fell to just 13%.

Demonstrating just how much the use of cash has diminished are the perils faced by Australia’s largest currency transport business Armaguard, which services about 90% of the country’s cash-in-transit (CIT) business.

Owned by logistics company Linfox Group, Armaguard merged with its biggest rival Prosegur last year but is still struggling to stay afloat with the CIT industry in structural decline due to decreasing use of cash as a payment method.

While cash is no longer king and digital payments have toppled its position on the throne, there is still the big matter of security.

The shift has opened up an entirely new front in the security war, with thieves trading shotguns and ski-masks for keyboards and modems in their quest to part consumers and their cash through online crime.

Organisations are increasingly working to stay ahead of scammers and protect the identity and funds of their customers. Telco Optus suffered a serious breach in 2022, that affected up to 10 million current and former customers.

The breach led to the establishment of the Federal Government’s credential protection register to help stop compromised identities from being used fraudulently.

Latitude Group (ASX:LFS) was also was subject to a cyber-attack in March 2023 that resulted in the theft of personal information. LFS says the theft affected customers, past customers and applicants across Australia and New Zealand.

And customers of organisations are becoming increasingly jittery about their personal information being hacked. Super giant UniSuper with 615,000 members and $124bn under management announced a “disruption” that meant services were offline last week.

UniSuper was quick to advise members that “no data has been exposed to unauthorised parties” with the company still progressively working to get its services back online this week.

While there are no guarantees an organisation won’t be the target of a data breach in the digital revolution we look at what some ASX non-bank lenders are doing to help keep your funds and identity safe or even to identify if your data has been comprised.

Wisr (ASX:WZR)

Fintech lender WZR chief operating officer Joanne Edwards told Stockhead as our financial lives have become increasingly digital, it remains ever-important to stay vigilant regarding our online presence.

“We get lots of positive feedback from Wisr App users of our free credit score checking service, getting peace of mind knowing their credit score is monitored in the background and they will be notified of activity on their credit file,” she says.

“If people see hard enquiries for credit on their file that they did not make, they should contact the credit provider immediately and can also ask for a temporary ban to be placed on their credit file by contacting the relevant credit bureaus,” she says.

“While getting notified of changes to your credit scores is helpful to know when something has already happened to your file, steps to prevent fraud and unauthorised access are also top of mind for users.”

Edwards says the growing instances of data breaches, where your personal information may have fallen into the hands of cybercriminals, put people at greater risk of fraud.

“These attackers can potentially misuse your data for identity theft, financial fraud, or other malicious activities, which is why it’s vital to check for breaches regularly and create strong passwords,” she says.

To help support its users, WZR offers BreachAlert which scours the internet daily for data breaches.

“Using the service, a person can see instantly if their email and other data may have been involved in a historical breach,” she says.

“Using ongoing monitoring, users get notified when future breaches involving their email occur, plus recommended next steps including how to create secure passwords and help keep their data secure.”

Edwards says she’s seen increasing adoption of its data breach monitoring service which tends to rise when new data breaches make the news.

“There is real power in combining the tools available to monitor your identity online and the flow-on impacts of potential fraud on your credit file,” she says.

“Having access to monitoring and notifications of data breaches and credit scores through an app like Wisr adds to the convenience and also immediacy if your online presence might have been impacted.

“This is all the more important for those with higher credit scores, with those users seeing on average higher instances of their data being involved with data breaches when compared to people with a lower credit score.”

Harmoney Corp (ASX:HMY)

The consumer-direct personal lender in Australia and New Zealand is prioritising security for its clients with CEO David Stevens telling Stockhead it is an area of paramount importance to HMY, as a 100% online lending business entrusted with customer financial information.

“Safeguarding customer data is not only a legal and ethical obligation but also crucial for maintaining trust and credibility,” he says.

“Harmoney has a comprehensive set of cyber security policies in place, and has implemented stringent measures to secure and protect customer financial and credit-related data.”

“With dedicated internal teams and support from world class partners, we have implemented state of the art multi-layered controls and procedures to protect customer data, and are undergoing external audits of our security program.”

Stevens says from a technical perspective, with the evolution of its Stellare platform, HMY have been working hard to reduce the attack surface area of all of its systems, and amount of customer data that the company retain to the absolute bare minimum.

He says this is good for Harmoney from a security perspective, but it’s also good for customers who are increasingly seeking to control the amount of private data they share with third parties and limit their own exposure to security breaches.

“Of course it is crucial that beyond having world class technical security, companies such as Harmoney also need to have world class support and training for all our staff whether they’re in IT roles or in customer facing positions.

“This helps us to make sure that we provide customers with great advice and support, but also helps protect data through better knowledge and understanding at every level of the business of the high standards of care our customers demand.

“Effecting this change is only possible through a tight collaboration between our security and people and culture teams as we continue to invest heavily in our people.”