How Digital Trust Can Overcome Fraud’s Impact on the CX

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Instilling digital trust by placing identity at the core of business operations is the digital version of putting the customer first.

Digital trust is critical to developing and maintaining positive, long-term relationships with customers. Confidence encourages the sharing of digital identity information that can be used to improve the customer experience (CX).

Why? Digital identity includes various pieces of information pertaining to an individual’s identity that are left behind during online interactions. For example, when a customer logs into their account, they identify themselves with an email and password and may include the way they type, the device used, and the time and location. 

The problem is that verifying genuine users’ identities online currently isn’t working. Users forget their usernames and passwords, and fraudsters can acquire them.

Special Report: Ushering In a New Era For Behavioral Analytics Applied To  Fraud [Download Now]

Fraud, scams, malware, bots, or social engineering, are all symptoms of the real issue, which is that digital identity is currently broken, and it’s causing a crisis in digital trust – how can we protect customers and provide a seamless user experience?

Online fraud and scams will rise if businesses moving towards a digital-first model continue to use today’s outdated methods to identify, verify and authenticate.

When cybercriminals prey on online interactions and transactions, both businesses and consumers alike suffer the consequences. And it’s the lack of understanding around where weaknesses in technology systems stem from that makes it difficult for organizations to make informed changes.

Fraudsters are clearly capitalizing on vulnerabilities, and businesses need tools to ensure digital identity is at the heart of every transaction.

The price for an influx of new customers

The growth of the eCommerce sector has been incredible in the last 18 months. Due to the pandemic, many businesses were forced to provide their products and services online to survive and, of course, meet an increase in demand from customers.

The surge in new customers has been positive for tech giants such as Facebook, Microsoft, Alphabet, and Apple, who reported to generate an astounding $250 billion in profit from an increase in digital expenditure and online shopping. However, a lack of experience in dealing with such growth for some businesses means that they’ve taken what are in effect analog processes and digitized them instead of rethinking the customer journey and touchpoints for a complete digital experience. This means that many businesses lack the right technology to secure their customers’ online journeys, personal data, and accounts, leaving both businesses and consumers vulnerable to fraudulent attacks.

Fraudsters and malicious actors are taking advantage of this vulnerability. The average amount of scam messages received via all channels by an individual is 1,133 a year; that’s three a day. A quarter (24%) of respondents also said they get more messages from fraudsters than friends and family, according to a recent study by Callsign.

Even more alarming, 82% of Americans received scam messages in the past 12 months. And across channels, US consumers report they have received messages from fraudsters posing as banks and financial institutions via text (21%), email (22%), telephone (23%), social media (22%), and messaging apps (21%).

The catch-22

It’s clear that a remedy is needed and fast. But the need to authenticate online customers regularly creates friction. A poor user experience can turn many customers away – seven in ten customers abandon purchases because of a bad user experience.

So, as businesses think about what digital identity verification solutions they’d like to implement, they must do so in a way that limits the amount of friction added to the customer journey.

One way they can do this is by utilizing passive approaches which ensure identity is incorporated into every interaction and transaction so that customers are protected throughout their online journey and not just account creation and login. 

Passive approaches to digital trust for better customer experience

It goes without saying that verifying a person’s identity is crucial to mitigating risk and building trust in our online world.

Special Report: Ushering In a New Era For Behavioral Analytics Applied To  Fraud [Download Now]

By using passive approaches such as behavioral biometric technology, businesses can authenticate users based on attributes that put identity at the heart of every transaction.

In the last decade, biometric technology quickly transformed from a niche technology into a mainstream remedy for corporations. Currently, there are two distinct types of biometric technology:

  • Static biometrics – which includes identifiers like fingerprint, face, voice, iris, retina, vascular, palmprint.
  • Behavioral biometrics – which uses dynamic inputs such as keystroke patterns (typing and swiping) when customers are logging in to access online banking, products, and services, using the same laptop to log in, or location data based on the entire user journey.

The more well-known static biometrics aren’t privacy-preserving and can add friction to the user journey. Conversely, behavioral biometrics are fine-tuned to the user from the outset, learning and adapting with the consumer as the business relationship progresses.

Since these are unique patterns based on the specific user, behavioral biometric technology can add levels of security to positively identify users without vulnerable One Time Passcodes. This enhances the user experience as the customer accesses products and services.

As a result of layering these contextual data points, this technology ensures there isn’t a single point of failure in the authentication process. It also puts identity at the heart of every transaction, facilitating a more intelligent view of the customer that is robust.

Serving the customer via digital trust

Instilling digital trust by placing identity at the core of business operations is the digital version of putting the customer first. It not only helps to ensure smooth online experiences and transactions but also secure, privacy-preserving experiences that benefit all.

Getting this right will enhance customer trust, drive brand loyalty and ultimately, increase business revenue.

Hal Granoff

About Hal Granoff

Hal Granoff is Head of US Market Development at Callsign. Hal leads the strategy and expansion of Callsign's Intelligence Driven Authentication in the United States. Previously, Hal was a Senior Director at Early Warning, where he was responsible for developing authentication solutions to protect financial institutions from the threat of fraud in mobile and online platforms. Prior to that, he served in leadership roles at Cendant Corporation (currently Affinion Group), where he managed account relationships for top credit card issuers, and MasterCard International, where he contributed to the company's growth of global acquiring initiatives in Asia, South America, and Canada. He earned his undergraduate degree from the University of Wisconsin at Madison while serving as Regional Director of AIESEC, an international student-run organization.

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