In today’s rapidly changing economy, businesses need to get consumer recognition right
This is a guest post by David Britton, VP Industry Solutions at Experian.
While the coronavirus has caused major public health concerns and disrupted our entire economy, it is also led to increased (and new) cyberthreats as fraudsters take advantage of the global health crisis. As more businesses and consumers are mostly engaging online, the need to protect consumer data has never been more of a priority. For businesses to have access to this data to provide value to consumers while respecting their privacy, a certain level of trust is required, but the increase in fraud suggests current ways of protecting consumers aren’t working and eroding their sense of security. One of the most important keys to a positive customer experience between businesses and consumers is re-recognition, or the ability to identify and recognize consumers at every point of interaction.
According to Experian’s 2020 Global Identity and Fraud Report, a total of 95 percent of businesses reported having high confidence in their ability to re-recognize their customers at every interaction. We had previously found that 84 percent of businesses could reduce fraud risk if certain about customers’ identity, and rising fraud suggests businesses haven’t quite figured out how to do that. In addition, businesses are reporting higher fraud than last year, with nearly three in five businesses claiming that it has increased in the past twelve months. The reason being that consumers don’t feel the same way as businesses. The 2020 report found that over half of consumers, 55 percent, don’t feel recognized when engaging with businesses online. Therefore, businesses feeling confident in their ability to recognize their customers is unjustifiable and needs to be improved. The numbers don’t add up.
If businesses want to develop loyal customers, it’s crucial that they understand why there is a disparity between their “recognition” of consumers, and their consumers’ less than stellar confidence in business. A number of businesses are continuing to rely on rigid, traditional methods of security, such as usernames and passwords, which can easily be compromised. Businesses often add additional measures in place, such as the use of one-time passcodes. These are not only far from the most effective and secure privacy tools available, but they create friction, or require the customer to have more than one device. These can also be intercepted and used by the fraudsters. There is available technology within reach to businesses to help better engage with their customers, such as advanced analytics for identity authentication and modern fraud mitigation strategies. Businesses need to have the agility to leverage a variety of data insights, capabilities and technology that will allow them to respond rapidly in these challenging times, increase identity confidence in every transaction, and provide a safe and convenient experience for customers.
The first step for businesses to take is gaining a fuller understanding of the consumer data that they already have. Businesses need to consider every consumer brand interaction that takes place and recognize the opportunity to get to know the consumer. How many businesses are actively taking account of their consumers’ interactions from their device configurations, and user-device-behavior, or behavioral biometrics? Behavioral biometrics, such as keystroke and mouse use characteristics, are much harder for fraudsters to mimic. Businesses need to compare this with the consumers’ business transactions. Taking into account their past purchases and shopping habits, location, and more, can paint a full picture of the consumer. Perhaps more importantly, these attributes are incredibly difficult for fraudsters to imitate. Leveraging advanced analytics like machine learning to make sense of these various layers of data and insights can also increase recognition accuracy, and can reduce fraud and operational costs.
Once businesses understand the opportunity to identify their consumers using the data they already have, it’s time to consider the importance of putting this into action. While businesses are focused on personalizing the consumer experience, their number one priority remains security, with 74 percent of consumers citing that as their primary concern. By accurately identifying consumers, businesses can deliver on both security and convenience – the cornerstone of personalized consumer interactions.
Using advanced identity authentication tools and a layered approach fraud strategy designed for protecting your customers and your business from fraud can create more positive experiences and more meaningful, trusted digital engagements.
About the author
David Britton is VP Industry Solutions at Experian. Prior to Experian, Britton was a private consultant to various fraud prevention enterprises and the former director of training at CrediView, Inc., where he developed Internet fraud prevention training courses for merchant fraud and customer service teams.
DISCLAIMER: Biometric Update’s Industry Insights are submitted content. The views expressed in this post are that of the author, and don’t necessarily reflect the views of Biometric Update.