Digital is now the preferred channel, but people are wary of biometric technologies. So, what does this mean for our current identity verification efforts and how can businesses help?
I have been presenting in various forums recently discussing the rise of digital fraud events like synthetic identities and deepfakes, and what can be done to thwart these ever increasing crimes. As deepfakes are created with the help of increasingly sophisticated technology like Artificial Intelligence, it’s important businesses have the necessary tech prowess to match the threat. However, businesses need to remember that the technology is created to help real people (i.e. their customers) and those same individuals are the ones who need to be comfortable enough to use it.
I’ve said previously, standard behavioral models will no longer cut it, with companies increasingly turning to biometric technologies to fight fraud. Though it’s critical for future digital security to verify the identity of an online customer, what happens when people don’t want to provide biometric information because they’re scared of their information being compromised? Or that, more often than not, people don’t want to share personal information with companies at all?
In light of this, we partnered with PYMNTS to conduct an in-depth consumer study to uncover a solution: what we found is a compelling argument on why clearer messaging and smarter user guidance around identity verification is important in order to usher in the next phase of secure and safe digital adoption.
A contactless future is here to stay: consumer data from the last 6 months
We’re quickly seeing that the quarantine associated with COVID-19 has created a touch-free society. People are concerned about touching things - warranted or not, it’s a real concern. Though it may be obvious, in our study we found that consumers now increasingly use digital channels to create and open accounts for goods and services they would have previously done in-person at brick-and-mortar locations. For example, 71 percent of consumers who opened credit card accounts in the last 12-months did so on a digital channel rather than a physical one.
And this trend doesn’t appear to be dissipating; on user onboarding, 54% of people indicated that it is “very” or “extremely important” to be able to open or access accounts in a contactless manner with their company in the future.
Personally, I think this trend is here to stay. As an identity expert, I know that it’s becoming a priority for businesses to accurately determine that people are who they say they are when we cannot interact in person. Both a large institution offering banking services and a tech start-up where someone wants to lend their car to a registered driver now require contactless ways to verify a person’s identity.
Temper your expectations on rapid adoption
And though contactless identity verification makes the most sense, there are consequences to acknowledge with this shift to digital. It won’t be as easy as flipping a switch! Companies may often forget the inherent intimacy that’s involved with a person’s identity, and that people might not be immediately willing to share sensitive information over a digital channel if it’s not clear why they need to.
Despite the convenience and security that is often synonymous with biometric tools, the survey found that consumers are less comfortable sharing their biometric information when opening an account. While close to 70 percent of consumers from the study do not mind providing standard personal information, such as an email address, a date of birth or a phone number, less than a third are comfortable providing biometric information, such as fingerprints, photos for facial recognition or voiceprints. That number increases to almost half of people interacting with new companies entirely, where 40 percent of consumers would feel even less comfortable providing biometric information for account opening at a new financial institution.
Modern problems require obvious solutions: informing and teaching
Fortunately, there is a solution. Our data showed that when a company stepped in and took an active role in leading and informing consumers, customers were overall more comfortable providing personal information to protect their identity. In the study, a company offering consumers assurance and explaining how their data will be used can go a long way in easing discomfort with sharing their information: 64 percent would be more comfortable providing biometrics if they understood that the financial institution would not share it with third parties. This is especially important to older generations, 73 percent of whom say having this assurance will make them feel more comfortable.
Though this makes logical sense, I’ve found a surprising amount of companies people interact with every day don’t provide clear communication or guiding information on biometric security. Or arguably more importantly an explanation on how safe and easy contactless, digital identity verification is.
I’ve talked at length about how biometric security is becoming the new and de facto way to help companies verify identities, allowing quick authentication of accounts whilst fighting against fraud trends like “synthetic identities.” But just because it makes the most sense from a business standpoint, it doesn’t necessarily mean that people will adopt it. Especially if their first impression is “giving away my biometrics seems more risky than secure.”
It’s complicated. As business leaders, we need to do everything we can to help customers – who want to use an online channel – to understand and trust the technology we’ve created. If you examine the need for the information more critically, a lot of the time there’s no reason for a person to provide a biometric at all. And even though we may all know it’s more secure and easy, the data shows customers may walk away from the digital ‘front door’, abandoning the process altogether if they don’t have the adequate information.
There’s not a one size fits all approach, but I do think that being clear with information in the user journey and sharing approved, factual sources is important for educating people, helping them get comfortable with security and cosigning biometric information. We now know people are concerned about physically touching biometrics readers due to heath concerns. In a way, that doesn’t change when you move online: people will still be concerned about sharing sensitive information that unduly exposes them to risk. But if you’re open to teaching and informing your customers about new technologies, you’ll likely earn more good and happier customers at the same time.
About Joe Bloemendaal
Joe Bloemendaal is the head of strategy, at Mitek. Joe joined Mitek, the leading provider of mobile capture and identity solutions, after the acquisition of IDchecker in 2015. As a big advocate of services that bridge the gap between offline and online ID verification, Joe argues that the true potential of the Internet will only be unlocked if we can trust someone online like we can trust someone offline. Joe is an ‘intreprenuer’ with a real passion for solving problems, designing strategies and solutions using his solid background in Risk Management, ID Fraud, KYC, and Identity Verification, to help Mitek’s clients leverage the most out of DIDV technologies.