Two in three prefer biometrics to MFA for online retail, FIDO Alliance research reveals

While identity fraud reaches ‘tipping point’, according to GBG
Two in three prefer biometrics to MFA for online retail, FIDO Alliance research reveals

A new survey conducted by the FIDO Alliance in the UK has revealed a significant loss in sales for retailers due to customer frustrations with online shopping.

A total of 1000 consumers participated in the survey, with 66 percent of them admitting to having abandoned purchases because they either could not remember their password or were forced to create a new account to complete the transaction.

The survey also analyses the factors preventing people from setting up an account after an initial purchase, and suggests the remedy may involve biometrics.

In this regard, 37 percent of people said they don’t want their financial information to be stored on retailers’ websites, 31 percent did not want to enter billing and personal data, and 29 percent were annoyed from having to set up and remember a new password.

These concerns also lead some people to utilize weak passwords, thus facilitating the actions of malicious actors.

A recent list of the top 200 most common passwords of 2020, for example, was compiled with NordPass, together with the times the passwords have been exposed.

According to Andrew Shikiar, executive director at the FIDO Alliance, the losses caused by customer frustrations could be prevented by switching to a passwordless approach.

“While historically there has been little that merchants can do other than to be frustrated at password-related losses, that is no longer the case,” Shikiar explained.

“Retailers [now] need to look for new solutions to [remove] needless friction from online transactions or run the risk of losing customers to the competition.”

Biometrics could be at the forefront of these new solutions, with the new survey showing that 68 percent of UK consumers would prefer to use fingerprint or FaceID than traditional two-factor authentication methods, and 65 percent believing they are easier to use.

This trend is particularly widespread with younger consumers, with 81 percent of participants between 18-24 saying websites providing biometric authentication are easier to use and quicker to use (77 percent).

Identity fraud grows worryingly during pandemic

The GBG State of Digital Identity: 2020 report has revealed a potential ‘tipping point’ in the impact of identity fraud in Europe.

The research, conducted by market intelligence firm Qualtrics and commissioned by GBG, surveyed over 1,000 consumers, and over 150 business decision-makers across a range of industries.

The results seem to show a widening ‘trust gap’ between businesses and consumers as identity theft grows amid COVID-19 digital acceleration.

In fact, according to the survey, 47 percent of consumers opened an online shopping account this year, with 50 percent of them seeing their mobile number as a core part of their identity, followed by email address (48 percent) and biometric data (28 percent).

“The complex set of data points which shape our identity are now vital in keeping the wheels of commerce turning,” commented Gus Tomlinson, GM of Identity Fraud, Europe at GBG.

“They create digital trust, allowing people and providers to interact safely without opening the floodgates to fraud.”

The gap mentioned in the report is widening due to the fact that several business owners are prioritizing experience over security, with a quarter of those surveyed say ‘high’ or ‘extreme’ levels of fraud are still accepted within their organization.

Meanwhile, online threats would be multiplying, with businesses saying credit and debit card fraud (56 percent), phishing attacks (46 percent), and e-transfer fraud (37 percent) are the most widespread forms of fraud affecting their companies.

“The research shows that not only is identity fraud already prolific, but the ‘trust gap’ it creates also poses a risk to industries which will depend on digital trust if they are to thrive in 2021 and beyond,” Tomlinson explained.

GBG has recently launched an interactive tool that allows businesses to understand how identity fraud is affecting their company, and how to deploy appropriate preemptive measures to avoid related financial losses.

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