Seeking the Right Balance of Authentication & Digital Consumer Experience

Seventy-five percent of businesses seek advanced authentication and security measures with little or no impact on the digital customer experience according to Dublin, Ireland based Experian’s Global Fraud and Identity Report.

Research from Experian shows this number is even higher in certain regions: 88% in the U.S., 87% in India, and 79% in China.

Currently, passwords are the most common form of authentication, but Experian noted businesses are constantly struggling to prevent fraud while maintaining a balance between security and convenience. Advanced authentication methods, such as device intelligence or behavioral biometrics, can help address this, without adding friction to the online experience.

“Certainly, technology is supporting the large volume of online interactions between businesses and consumers. But the real currency of digital commerce is trust,” the report said. Especially since the digital marketplace features most consumers owning smartphone and mobile devices (91%), followed closely by laptop computers (83%).

Online activities among consumers reflect widespread embrace of digital commerce to purchase goods and services (90%) and conduct personal banking (88%). As businesses undergo digital transformations in their front and back office operations, they recognize the importance of trust and the need for technology to enable it. When it comes to online engagement, three-quarters of businesses are interested in more advanced security measures and authentication processes that have little or no impact on the customer. At the same time businesses understand that their customers take comfort in the security measures they already have in place for digital transactions. “Building trust through technology without disruption is increasingly the goal, but also the responsibility of businesses with online channels. While there are genuine barriers to achieving that goal, it is now more critical than ever to business outcomes,” the report noted.

John Sarreal, director of product management at Experian, said “We believe that customers are used to the current level of friction, it makes them feel protected. But, while customers would be happy with greater convenience, they aren’t ready for the visible signs of security to completely go away. Instead businesses need to identify more effective and less disruptive ways for businesses to manage fraud, like using a fingerprint instead of a password.”

Among the specific findings related to banking activities:

• Eighty percent of banking consumers trust that protecting personal data is a top priority.
• The top three barriers encountered when banking online: forgetting a username or password, locked out for mistyping a password too many times, or answering secret or personal questions prior to access.
• Top three features that would enhance the online banking experience for customers, and make them feel secure: instant confirmation for transaction (funds transfer, bill payment etc.) with confirmation number (72%), easy-to-report lost or stolen cards, or suspected fraudulent behavior (69%), and ability to call up and download transaction history (66%).
• In contrast, while aiming to provide security, these features do less to enhance the online customer experience: ability to ‘recognize’ an individual and verify who they are without asking them to input information (48%), security measures that require individuals  to reset a password at fixed intervals (47%), online banking site that remembers your login credentials and pre-fills your information (e.g. username and password) (42%).

When it comes to consumer interactions, lack of visible security was the top reason customers abandoned a transaction; and 66% of consumers indicated, “I like all the security protocols when I interact online because it makes me feel protected. However, 42% of millennials said they would conduct more online transactions if there weren’t so many security hurdles to overcome.

The report suggested if organizations can recognize customers, they can recognize fraud. “When it comes to managing fraud risk, there is not a global one-size-fits-all solution. But there is a promising way forward. As we see it, customer recognition delivered through advanced, multi-layered solutions tailored to the customer experience is the future of fraud prevention.”