A digital identity, the web equivalent of real identity, is experiencing widespread adoption for identification and authentication in sharing economies.
The possibility of having a verified virtual identity has opened up a plethora of opportunities for smooth online transactions anywhere in the world. Having access to personal credentials online streamlines business workflows and makes it convenient for customers to make purchases, transfer funds or sign up for government e-services in a matter of seconds. Gartner notes that by 2022, IT will facilitate two-thirds of all customer experience initiatives.
However, like all nascent tech wonders, this particular advancement also comes with a caveat: safety of personally identifiable information (PII).
The dynamic data being used to make business decisions and develop customer personas on digital platforms is exposed to a high degree of privacy risk. Data attributes such as name, address, bank details, national IDs, as well as other biometric and behavioral characteristics are prone to theft by well-equipped cybercriminals and hackers.
In this respect, safeguarding online accounts and identities becomes paramount. However, it is observed that safety procedures that require robust checks come off as inconvenient. Customers are willing to forgo painful privacy controls at the risk of compromising sensitive data if a security protocol is tedious or too intrusive.
Digital identities are popular for key benefits in two main areas:
1- Customer experience
2- Online Safety
Balancing online security and customer experience
Here are 3 breakthrough solutions to help your business secure the use of technology without compromising customer experience:
1- Industry wide awareness about identity fraud
Digital identification systems are ripe for attack by hackers worldwide. In 2018, over 3 million reports of identity theft were received and consumers lots over $1.48 billion related to fraud complaints.
Moreover, children and senior citizens are increasingly being made victims of identity fraud to obtain sensitive information through online platforms. Out of all types of cybercrimes including ransomware attacks, credit card fraud and account takeover fraud, identity theft is by far the easiest to carry out and monetize.
Stolen personal information from the web can be used to create fake accounts or carry out illegal transactions in the name of authorised users. This misuse of digital identity has grave consequences especially if perpetrators are involved in serious crimes of money laundering or terrorist financing.
While customers value the convenience and accessibility, they are still unclear about the real power digital identities as well as associated risks. Therefore, the need arises for creating awareness about identity fraud, as well as educating users about the best use of personal accounts online.
Digital identity is fast becoming synonymous with individual identity, customer perception around the subject will need to be nurtured in favour of safety procedures. Customers must update themselves about best practices in securing account details on the web through passwords, biometric login or two-factor authentication. The use of updated malware and virus protection software on all devices must be ensured to ward off malicious worms and codes from getting in.
A virtual identity doesn’t just depend on personal details entered manually into a form, but is created using shadow data from an individual’s actions online. Randomly generated online IDs also track activity from social media networks, gaming websites and the likes. Such information makes the rounds on what is known as the dark web and is commonly sold to hackers looking for authorised accounts.
Creating awareness about digital ID theft among customers is therefore the first step in moving towards an agreeable solution for secure digital identities.
2- Integration of automated digital identity verification solutions
The expansion of the sharing economy has customers looking for more efficient and faster ways of signing up for online services. 80% consumers are researching a product and looking for reviews online before completing an action. Since security is a key factor, automated solutions make intuitive sense for managing high volume online transactions in industries worldwide.
The use of biometrics for authentication has streamlined customer onboarding and improved customer retention rates by a large degree. As a first, the use of FaceID to unlock the iPhone has demonstrated the acceptability for digital onboarding solutions by a growing demographic. This is largely due to the convenience that biometric technology affords end-users.
Along with being cost-effective and lightning fast, automated verification enables customers to login without any intrusive information prompts. Voice recognition and other behavioral measurements are being developed to better understand customers and provide solutions without a hassle.
For businesses, this means customer onboarding processes are improved in terms of fast turnaround times and enhanced security. Traditionally, manual process of recording customer information resulted in delayed sign ups and low accuracy in saving personal credentials. Digital platforms are also considered more secure than those involving paperwork, awarding larger data control and transparency to customers.
3- Adherence to a culture of compliance and safety
Customers are switching to digital solutions. And they’re doing it fast. Research from Accenture notes that 75% of consumers more likely to purchase from a company that is familiar with their online profile, history and preferences. A large chunk of holiday sales now takes place on smartphones. In addition, consumers are now expecting well-established companies to develop mobile portals as a primary means of interaction.
In the case of fintech, for instance, we witnessed how traditional players may not be as fast or readily available to offer a customised financial solution to a customer. But banks and large financial institutions do guarantee safety and stability for the long haul.
This is precisely why customer engagement is key. Companies need to understand customer journeys and examine buyer personas to optimize customer experience at the same time that complex fraud prevention tools are integrated.
At the enterprise level, relevant and timely information about installing security protocols and managing personal information responsibly must be shared without fail. During onboarding processes, customers must be encouraged to spend time verifying their credentials online and be appraised about data privacy controls. The goal is to minimize the level of friction between product touchpoints that may results in unsatisfied customers and lost efficiency.
This entails integrating security controls and compliance protocols at the design stage. The use of customer data for delivering personalised marketing actions should be driven primarily by the need to improve customer experience. A business can reflect its adherence to privacy controls by ensuring the use of decentralised data servers that allow restricted access to stored account information.
Organisation-wide employee training for better understanding of customer expectations as well as cyberthreats can help organisations develop a holistic approach towards improving experience.
As we continue to embrace technology with increasing ease, there are inevitable threats that both individuals and enterprises must keep up with to ensure the sustainability of digital transformation strategies. Establishing security standards and keeping customers informed will help balance convenience and safety.