Digital Identity: What Is Your Disjointed Digital Customer Journey Costing Your Business?
Posted November 29, 2017
A poor digital customer experience could cost your business big time in 2018. And for many organizations, digital identity may be the only way to fix it.
According to Forrester Research, business dynamics taking shape next year will force decisive action from brands looking to differentiate themselves through a compelling digital customer experience. At stake is your competitive standing in a marketplace where customer expectations now mean “rewards and punishments are doled out experience by experience.”
The fact is, customers want what they want, when, where and how they want it. As Harvard Business Review puts it, even 10 seconds of friction can cause 50 percent of consumers to bail on a transaction. What’s more, seamless consistency at every touchpoint of the digital customer journey now equals brand loyalty.
But today, many businesses can’t even recognize a returning customer, let alone provide a consistent, secure and friction-free experience. For some, digital identity could be the answer. But, for those that stick with the status quo, the results could be costly.
Climbing Fraud Rates
According to Juniper Research, 2.8 billion identity records will be breached in 2017, a figure that could balloon to 5 billion by 2022. And that’s on top of billions more compromised during the past decade.
With identity credentials so readily available on the dark web, it can be shockingly easy for cybercriminals to take out fraudulent loans, hijack customer accounts, make illegal purchases and more.
Businesses that can’t recognize customers or understand the full context for every interaction—from initial account setup, to logging in to do business, to making a digital payment—will fall prey to fraudsters who increasingly use these credentials with impunity.
According to Ponemon Institute, the cost of such cyberattacks is now $11.15 million per company, to the tune of $3.6 trillion in total losses worldwide.
Digital identity is designed to put an end to all that. Instead of relying on static identity credentials, digital identity leverages global threat intelligence and hundreds of dynamic data elements that can never be faked or stolen. New and returning customers are instantly recognized and rewarded with a streamlined user experience, while fraudsters are stopped cold.
For today’s consumers, the name of the game is instant gratification—or else. Nothing chaps hides like say, a live chat representative asking for the same credentials a customer just used to log in, or having to enter different credentials to use different digital channels, say web, mobile or kiosk.
To protect themselves, a growing number of businesses are forcing customers to jump through hoops to prove their identities. In one recent survey, 25 percent of consumers reported that every retail website and app they use requires two-factor authentication. With shopping cart abandonment already resulting in $4 trillion in lost revenue, treating customers the same as criminals doesn’t appear to be a winning strategy.
With its ability to instantly assess the legitimacy and risk associated with even first-time visitors, digital identity can make the need for such out-of-band authentication the rare exception rather than the rule.
Churn That Burns
With nimble, tech-centric competitors on the rise, customers will take flight for the ease, speed and convenience they desire.
In fact, it’s estimated that $1.6 trillion will change hands in the next year as consumers permanently defect from one brand to another due to poor digital customer experiences.
Digital identity provides businesses with the full context for accurate trust decisions at the point of each transaction, enabling them to provide a fast, friction-free experience in a consistent manner at every step in the customer’s journey. According to Harvard Business Review, this kind of digital cohesiveness can help businesses avoid frustrating customers and limiting their lifetime value, while lowering the chance they’ll defect to competitors.
But they’d better step on it. In 2018, Forrester predicts 30 percent of businesses will fail to keep up with evolving customer expectations for the digital experience, resulting in a net loss of one point of growth.
Cybersecurity: The New Profit Center
Digital identity may be more than just a critical component to mitigating losses. In Forrester’s view, savvy companies will start to see identity-centric cybersecurity as a way to generate new business growth—driven by security, risk, and privacy teams with the support of their peers in marketing.
What kind of payoff is possible? According to Bain & Company, businesses that excel in customer experience grow revenue 4 to 8 percent above the average for their market by attracting new customers, earning stronger customer loyalty and boosting lifetime values.
If that sounds good to you, be sure to check out The Definitive Guide to Digital Identity. This new online resource is designed to further the understanding of digital identity and how it can help businesses grow profitably and securely in 2018—and beyond.