How Financial Services Use SMS API for Secure Transaction Notifications?

In the fast-paced information age, the digital transformation of data from financial transactions to medical records brings unprecedented convenience and new risks. By 2025, cyberattacks are expected to cost businesses a staggering $10.5 trillion annually. 

A single major attack can cripple an organization for years, eroding not just financial stability but also customer trust and brand reputation. The financial sector, driven by APIs, is particularly vulnerable. To combat these threats, many companies have adopted robust API security strategies.

Imagine a bank experiencing a data breach: sensitive information is compromised, and customer trust is shattered. Now, envision that same bank utilizing SMS APIs to send timely alerts and notifications, ensuring customers are instantly informed of any suspicious activities. This proactive approach not only enhances security but also builds trust, showcasing how sms api can revolutionize secure transaction notifications in financial services. Read below to know how SMS API can be used for secure transactions:

Two-factor Authentication 

Two-factor authentication (2FA) using SMS API is one of the best practices for protecting against fraud, hacking, and data loss. For future communications, including marketing, debt collection, or notifications, the service provider will be able to validate the individual’s contact details. By preventing account hijacking, 2FA using SMS API adds an extra degree of protection by guaranteeing that only the authorized user can access the account from a different device. 

For Example, Ruban gets an SMS code using SMS API to confirm his identity when he attempts a high-value transaction, preventing unauthorized access.

Secure Password Resets

A common security risk is lost or forgotten passwords. By sending verification codes or temporary passwords to clients’ phones, SMS APIs can expedite safe password resets and guarantee that only authorized users can reclaim access. Financial institutions can make sure that only those with permission can access their accounts by utilizing SMS APIs to deliver verification codes for password reset requests.

For example, when Kate forgets her bank password, the financial institution sends a verification code to her phone via SMS API, ensuring that only she can reset it.

Payment Reminders 

As humans are naturally forgetful, paying bills or loans sometimes slips out of mind. Users who have fallen behind on their monthly payments can be gently nudged to be on track with reminders using SMS API. To avoid late fines and maintain the timely payment practice, it is also preferable to send pre-reminders messages with future payment dates.

Account Authentication 

Online account opening can be convenient, however there are issues with verification. To provide an additional degree of security during the account creation process, SMS APIs can be used to deliver one-time verification codes to customers to verify their phone number. 

Potential security breaches can be identified and stopped by using SMS notifications to notify users about account activity, such as balance changes, account logins, and suspicious login attempts.

For Example, When Ahmed opens a new online bank account, he receives a one-time verification code via SMS API to confirm his phone number.

Transaction Confirmations with PIN codes

The SMS API can initiate a one-time PIN code request for confirmation from service users who try to complete higher risk transactions (such as accepting loan applications, sending big amounts of money, or signing contracts). As there isn’t much time left on this PIN code, the transaction must be finished quickly and by the sole person with access to the phone being used to deliver messages which improves security.

For Example, When Rahul tries to transfer a large sum of money, the bank’s SMS API sends her a one-time PIN code for confirmation.

Security Awareness Campaigns

Scams including social engineering and phishing are common. Customers can get timely security awareness messages through SMS APIs, informing them about online safety best practices and warning signs. SMS alerts can be used to raise users’ knowledge of security issues by informing them about phishing attempts and offering advice on how to spot and stay away from them.

Wrapping it up

To efficiently manage daily operations and protect customer details in any financial institution partner with Gupshup’s a leading sms api service provider. Stay ahead of cyber threats and ensure compliance with real-time, secure transaction notifications. Boost customer trust and safeguard financial information effectively. Get in touch with Gupshup to offer secured transaction to your customers through SMS API. 

 

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