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Guest Blogger

By Gus Tomlinson, General Manager and Identity Fraud expert, GBG

The past year brought events that could never have been predicted – we experienced such a sudden digital acceleration in which our reliance on technology soared 10 years or more into the future. Mobile adoption soared amongst consumers, and the importance of verifying identities, accounts, transactions and online interactions became crucial.

Due to lockdowns, we saw consumers abandon the local high street for the world of global ecommerce. As waves of new accounts were opened for online services, and existing customers switched to digital channels, retailers and financial service providers in particular had to quickly shift their business operations in order to adjust, months and even years sooner than they had planned to.

Now, following these events, we’ll begin to see technology live up to its true potential – from our new remote world of work, to decisioning driven by AI, to entire countries harnessing big data analysis. But with this, we’ll also begin to see cracks in the foundations of our new, digital-first existence.

Issues around the presence of trust – or lack thereof – are emerging at scale. Our research has revealed that signing up to, and transacting with, businesses online isn’t as easy as it needs to be. It also isn’t as safe, nor does it feel as safe, as it should be. And no doubt this is down to the fact that it’s all powered by the internet, which was built without identity or ‘digital trust’ in mind.

Security vs. experience: striking a balance

For business, it is becoming increasingly challenging to balance fraud prevention with managing friction for their customers. More than half (54%) of businesses feel that this balance has become more complex over the past three years.

In the race to get ahead of global competition, we’re seeing a greater emphasis being placed on delivering a “frictionless user experience” than on fraud prevention and security. Shockingly, a quarter of businesses (28%) say that “high” or “extreme” levels of fraud are accepted within their organisation, highlighting that more needs to be done towards fraud prevention.

This business perspective is a stark contrast to the growing concerns we’re seeing amongst consumers. While providing ‘frictionless’ experiences for consumers is a main priority for businesses, consumer priorities follow a different path.

For customers today, a quick, simple process or online transaction isn’t necessarily one a trusted one. When opening accounts, less than a fifth (15%) of customers think speed is the most important factor, while less than a quarter (23%) see simplicity as a necessity. Instead, over half (52%) see security as the highest priority.

However, there are definite contradictions in these concerns. Two fifths (38%) of consumers have abandoned a sign-up process in the past because it “took too long”, but at the same time, more than three in five (63%) are more likely to use a service if it used advanced fraud prevention methods. It’s no wonder that businesses are struggling to strike a balance between experience and security.

Putting ‘friendly friction’ into action

Without doubt, trust, as well as ease and safety, is essential when it comes to consumer transactions and building an optimal customer experience. With this in mind, here are a few key steps that businesses can take to find the crucial balance between safety and experience.

Understanding the customer base is fundamental to developing an effective, customer-centric approach to experience, fraud and compliance. We’ve seen through our research that there are significant differences in preference between generations, industries and regions. Businesses must therefore go beyond ‘standard practice’, as one size doesn’t necessarily fit all in the world of secure experiences.

For businesses operating online, optimising the overall customer journey plays a vital part in reducing customer losses, such as through cart abandonment and onboarding drop-out. They should look to better connect the product, security, compliance and marketing functions within the business, while also building personalised end-to-end experiences for customers. The key is to provide an experience that feels tailored to each individual customer.

Some see ‘friction’ as a no-go when it comes to experience – but in fact, it’s important to put friendly friction into action. Consumers want to feel a sense of control when signing up for a new online account, and manually entering information is still the most trusted means of doing this. While automation can speed up processes, keeping some manual processes in the mix will help boost trust without impacting the overall customer experience.

Overall, it’s clear that if businesses are to build back consumer trust post-pandemic, they’ll need to continually adapt their online experiences to fit into this new digital-centric world. Keeping both secure processes and simple, easy customer experiences front of mind will ensure that their online offerings are best suited to the consumer demands of the new normal.

About the Author

Gus Tomlinson is an expert in identity technology with experience in global data, regulations and market trends. She has a deep understanding not only of GBG’s product portfolio, but also the global markets that its customers operate in across the globe. 

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