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Prioritize onboarding and digital identity fraud protection or lose customers: GBG survey

Prioritize onboarding and digital identity fraud protection or lose customers: GBG survey
 

Market research from GBG suggests that mass smartphone adoption and digital identity creation places heightened emphasis on smooth onboarding processes and customer protections for digital services businesses, particularly in light of increasing fraud attempts.

‘The State of Digital Identity 2022’ report from GBG says the impact of the COVID-19 pandemic has increased digital access of goods and services, with 66 percent of European consumers having created at least one new online account in the past 12 months. Those opening new accounts are likely switching to rival services, with 81 percent of new online credit card account consumers saying they were accessing a new service, and 80 percent signing up for a new loan account online. More than three-fourths say they signed up for a new online account with a smartphone.

GBG says that safe, quick, and easy onboarding is becoming increasingly critical, as 28 percent of those surveyed say they abandoned signing-up for an online account in the last 12 months because it took too long. More than half (57 percent) say security is important to creating a new online account, with ease (31 percent) and being quick (22 percent) comprising the remainder.

“It appears that many consumers are now more than willing to ditch a brand if they have a poor onboarding experience. Most people in the UK, and indeed across Europe, have signed up for goods and services online over the past few years but the fact that so many consumers have opened completely new accounts in the past 12 months may indicate that we’re witnessing ‘The Great Switch,’” says Gus Tomlinson, chief product officer, EMEA at GBG.

The increasing demand for digital services is met with a rise in identity fraud attempts during the pandemic. Almost one-in-ten in the UK say they were a victim of fraud, with the top three consequences being losing money from their bank account (40 percent), their credit card/bank account stolen and used (30 percent), and their name being used to open a credit card/bank account (22 percent). The average transactional value of a breach is said to be just under £16,000 (roughly US$21,190).

Notably, the report finds that young adults are the most vulnerable to online fraud according to GBG. With 13 percent of young adults aged 18 to 24 being a victim of fraud, compared to 12 percent among 25-to-34-year-olds; 9 percent for people aged 35 to 44; 7 percent of 45- to 54-year-olds, and 4 percent of consumers aged 55 and over.

With smartphones expanding in use in Europe, GBG says the mobile devices can function as a layer of alternative data to verify and identify people. The firm says it could be particularly useful for people who lack traditional identity documents such as passports, and young adults. With most businesses seeing social engineering as the most notable fraud scheme, GBG says a behavioral biometric tool like silent mobile authentication can protect against the attack, and increase security confidence for SIM swap and call forward signals companies.

GBG finds that 64 percent of firms using third-party or in-house digital identity verification services have reported benefits with business growth and reduced fraud while increasing compliance.

“By understanding more about digital identities, layering the right data and having the best technology in place, companies can keep consumers safe in a digital world and keep up with evolving consumer expectations,” comments Tomlinson.

GBG acquired New Zealand-based biometrics provider Cloudcheck earlier this year and Acuant in late-2021 in a major upgrade of its onboarding and fraud protection capabilities.

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