The past year was a juggling act for businesses and consumers alike. Consumers adapted rapidly to a nearly digital-only world while businesses had to keep up with their ever-changing demands, including security. As more consumers went online for everything from food delivery to online banking, businesses had to grapple with a huge uptick in volume and ensure easy yet secure transactions.
As the world continues along the path to recovery, the need for proper identity verification and a solid fraud prevention strategy will be table stakes for businesses to earn and keep consumers' trust. There's no doubt that consumers' behavior has changed as a result of how they've navigated the crisis created by the pandemic. It's critical that businesses ensure that they have the right technology and tools in place to prevent fraudulent activity.
Consumers Want Invisible Security in Place
With the rise in fraudulent activity over the past year, there's no doubt that consumers are concerned about online security. Findings from North America in Experian's "2021 Global Identity and Fraud Report" show that 44% of US consumers worry about their digital privacy, compared with 23% of Europeans.
One of the most significant findings from the report is that consumers have an increasing comfort and preference for invisible security measures such as physical biometrics and behavior-based methods. Consumers named physical biometrics as the No. 1 method based on perceived security, at 89%, in January. This includes security measures such as fingerprint and facial recognition scans.
At No. 2, with 82%: behavioral biometrics, which leverage passively observed signals across mobile devices and browsers with no effort from the consumer. PIN codes sent from mobile devices rank third. It's interesting to note that passwords are not top of mind for consumers as a preferred security method to verify their identities — 57% in the US. This indicates a pretty large shift in how consumers think about security when doing online transactions and shows that there will only be greater demand for more practical and invisible security measures.
With this change in comfort with newer security measures, businesses can incorporate a multilayered approach to security by using both visible and invisible methods. Organizations can successfully recognize and authenticate identities by using data from the customer journey. The same insights that companies use to improve the customer experience can help with verification and authentication — ultimately reducing friction for customers.
Properly Recognize Identities and Improve Customer Experience
According to our report, 54% of consumers have higher expectations of their customer experience delivered online, yet only 31% of consumers say their expectations of the digital experience are being met. The good news is that out of all of the countries surveyed, the US had the most companies that say they plan to hire more people to support digital operations — a departure from other regions.
As consumers want to be recognized online without added friction, businesses must be prepared by having the proper fraud prevention strategy in place to properly verify customer identities. Having these measures in place enables businesses to offer a seamless digital experience, mitigate risk, and help build customer trust. With two out of three businesses citing increased concern about the overall level of fraud, here are three tips to incorporate into a digital fraud prevention strategy:
Incorporate Technology, Automation
To achieve a seamless customer experience without friction, businesses should incorporate artificial intelligence and machine learning into their systems to build a layered security process. This technology can help automate sometimes outdated practices and rapidly scale the digital customer journey.
Combine Security Measures Based on Customer Preferences
Fraud can be complex, so taking a multilayered approach to recognize and verify the consumer will be critical to catch sophisticated fraudsters. By combining invisible and visible security methods, businesses can properly recognize and authenticate identities.
Data and Advanced Analytics Are Key to Recognition
With the right infrastructure in place, data and analytics are the critical to being able to recognize a customer online. Advanced analytics can also pinpoint inconsistent data or erratic behavior that can often indicate fraud.
Since our digital-first world is here to stay, businesses must ensure that they have the right tools in place to be agile in how they continually adapt and interact with consumers who are open to more practical means of security. On the road to recovery ahead, successful businesses will be the ones that proactively optimize the customer experience while using a strong recognition strategy that can mitigate future risk.