November 19, 2018
November 13, 2018
Posted May 3, 2018
One of our goals in developing our digital identity solutions was to help offset the overwhelming lack of trust running rampant in the digital economy.
And, according to a new report, we’re well on our way to making that goal a reality.
As detailed in the Q1 2018 Cybercrime Report, the recognition rate of good customers continues to climb within our Digital Identity Network. In fact, one financial institution that implemented digital identity saw its trusted transaction rate jump from 7.8 percent to 80 percent in just four months.
The digital economy is the fifth-largest economy in the world, and trust is the underlying currency of how companies conduct business through digital channels. If you can’t trust the individual you are transacting with, at that moment of truth, the outcome could be devastating for you and your business.
However, a lack of trust brought on by a rash of breaches that has put personal information in the hands of cybercriminals is threatening this growth. According to one report, it is estimated that the digital economy has lost $3 trillion in growth due to these intrusions.
At the dawn of the digital age, establishing trust was as simple as providing a few key pieces of personal information to prove who you are, then creating a user name and password. Thanks to all those data breaches, those days are long gone.
Therefore, regaining trust is dependent on finding a better, more accurate way of recognizing good customers without making them jump through hoops to prove who they are. Because, it is that added friction that leads to frustration among today’s digital customers, as just about every digital business can attest.
In fact, reports have shown that consumers will quickly switch to a competitor when faced with friction – even as little as 10 seconds worth. And that could result in businesses missing out on an estimated $1.6 trillion in revenue, according to an Accenture report.
What’s more, the ability to let legitimate customers move quickly through their journey is critical not only to your bottom line, but also to your brand reputation as well. Customers don’t like to be treated like criminals, having to repeatedly prove who they are. And they don’t have any qualms about telling their friends and family about such negative experiences. According to an American Express study, 95 percent of consumers share stories about their poor experiences with others.
Therefore, businesses are seeking out solutions to help them take back control and re-establish trust. Many businesses are even exploring advanced, digital identity-based user verification technologies. Digital identity-based solutions show promise because, as we have discussed before, they get smarter over time.
Built on cognitive technologies, these digital identity solutions are designed to understand each user’s history and the way they behave across multiple websites and applications. Using behavioral history, digital identity establishes real-time, dynamic relationships between people and their associated devices, locations, credentials and offline identity details, such as billing addresses, phone numbers and shipping information.
The idea is that these relationships and connections will grow and evolve over time to form a complete and highly reliable picture of each user that can be used to consistently and accurately verify identities and recognize returning users with up to 95-percent accuracy.
In addition, businesses often find they can provide an added level of protection for their trusted customers. If the identity of a loyal customer is ever misappropriated, anomalies associated with that customer’s digital ID can be detected in real time, preventing a customer’s account from being compromised.
And the best may still be on the horizon, as the addition of the identity intelligence and advanced linking technologies from LexisNexis Risk Solutions will provide even greater insights for customer recognition.
As mentioned in the Q1 Cybercrime report, overall recognition rates continue to rise with increased mobile usage – driven by the additional level of detail mobile brings to defining digital identities, along with high transaction volumes and strong customer engagement.
These trends may have important ramifications for developing nations, where mobile can be the only access to banking for many consumers. Increased customer recognition can support organizations seeking to make delivery of services viable for underrepresented groups, such as the un-banked or under-banked population.
In the digital age, knowledge isn’t (just) power. It’s trust.
And, in a digital landscape where businesses can find themselves walking a tightrope between balancing effective fraud control and minimizing customer friction, some may find trust is, indeed, the key.
To learn more, download the Q1 2018 Cybercrime Report from ThreatMetrix.