UK financial institutions lag global counterparts in adopting authentication technology
More than four out of five UK financial institutions (84 percent) are concerned about their ability to correctly identify customers, and companies in the sector lag behind their counterparts in China, Singapore, the U.S., and Australia in adopting new approaches to customer authentication, according to a new study by Forrester Consulting.
The study, commissioned by data intelligence firm GBG, found that UK financial service firms are less focussed on new technology, and more on cost-control, than those in other countries. Specifically, nearly 40 percent of UK firms are “not interested in facial recognition biometrics to authenticate customer’s identity,” compared to 20 percent or less in the other countries studied. UK firms are also less likely to be interested in using automated electronic data capture or social media data to authenticate customers.
UK financial services firms are also significantly more likely than those in the other markets studied to believe they are “seriously lagging” behind competitors in the performance of their fraud checks when onboarding customers. According to Forrester, identifying customers through digital channels is critical to the success of financial institutions.
“Although the UK is currently behind the rest of the world in its digital approach to customer identity, there are some promising signs for the future,” said Mick Hegarty, Managing Director at identity data intelligence specialist GBG. “Our research shows that UK fintechs are more interested than the established banks in adopting new approaches and more are planning to increase investment in the next 12 months. The fintech innovators and challenger banks will prove vital to the UK financial service sector in keeping pace with the rest of the world whilst we navigate a challenging year of legislation and policy change.”