The unsanctioned and high-profile attendance by reality star wannabes Tareq and Michaele Salahi at the White House state dinner in November continues to provide grist for late night comedians, morning talk shows and disapproving commentators. But the more I thought about it (although I really tried to avoid thinking about the Salahis), it occurred to me that this incident also provides bankers with one more object lesson in a year full of cautionary tales, warnings and recriminations.
Although at press time the Salahis still contended they had been approved by a government official to attend the state dinner honoring Indian Prime Minister Dr. Manmohan Singh, their names did not appear on the guest list being checked by a Secret Service screener. Rather than challenge or refuse them entrance, the screener passed the Salahis on to the next station, assuming someone else would be able to verify their identities and credentials. The rest of the story is paparazzi history. In a cheesy way, the tale also illustrates the challenges bankers face every day as they strive to gain more insight about their customers, verify the identities of everyone seeking access to company and client information, secure the privacy of employees and customers, and provide an appropriate level of transparency and interaction -- and to do so cost-effectively, efficiently and consistently.
It seems like such a simple thing: Someone's name does or does not show up on a list of approved attendees or customers, and they are either granted entry or turned away. The policies and procedures for handling these situations should be clear, well communicated and well understood, and rigidly enforced. It shouldn't be any different whether it involves protecting customer data or protecting the president and first lady. But of course that is easier said than done, especially in today's open source, socially networked, boundary-less world. (And how fitting that the Salahis proudly displayed evidence of their exploits on Facebook -- no different from hackers bragging about their break-ins.)
Today more than ever before, banks are striving to balance requirements for security and fraud prevention with customer, partner and employee expectations for open access, speed and customization. The Salahi debacle shows just how tricky -- and risky -- this balancing act can be. Although we all should be glad that this is one failure that can't be blamed on the banking industry, it underscores that "Know Your Customer" isn't just a regulation -- it has to be a way of life.
Wishing you a secure, interactive and insightful 2010!
Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio