Why strong identity verification is becoming a USP for financial services
By Philip Pointer, Head of Digital Identity at Jumio
Accelerated by the pandemic, the majority of our financial lives are now happening online. Capitalizing on the unprecedented boom in digital services across all sectors, the UK government recently revealed plans to introduce digital identities to help tackle the ‘record’ levels of fraud in the UK that accompany this news. way to operate. So in an industry where the stakes are high, financial organizations are under increased pressure to ensure the security of their customers’ finances and to ensure that those who access funds, transact or take out loans are those they claim to be.
But it’s not just governments that are asking for this level of assurance – consumers are too. Our recent survey revealed that more than two-thirds of consumers worldwide (68%) believe it is important to use a digital identity to prove who they say they are when using an online financial service. Additionally, more than half of UK consumers (57%) say they would be more likely to turn to an online financial services provider if they had strong identity verification measures. Financial institutions must therefore ensure that the methods they implement for verification create a complete ecosystem of trust across the full range of services.
So, with robust identity verification methods becoming a differentiator for financial organizations, how can they provide this seamlessly and efficiently?
Take advantage of digital identity acceptance
As a general rule, financial services have always been cautious about identity verification, treating every consumer as a potential threat and implementing lengthy verification processes to ensure low risk. As a result, consumers regularly encounter clumsy authentication processes, one of the main causes of dropouts during the onboarding phase. In fact, dropout rates can reach 75% during the signup process if the customer experiences too much friction.
Digital identity verification solutions therefore present a viable option, especially for consumers who are becoming familiar with them. Our research found that half of Britons (50%) need to constantly or often use their digital identity to access their online accounts and verify their identity after the pandemic. And with the UK government moving towards using digital identities to combat fraud, this is the most logical step for financial institutions.
Integrating biometric technologies into the mix
The use of digital identity solutions for verification is based on biometrics, which is a good start as the majority (71%) of UK adults say they feel comfortable using identity verification. biometric identity to use online financial services, from their fingerprint (52%) to their facial verification (36%). Consumers say they would also be happy to use biometric identity verification when performing a range of financial actions, from bank transfers, to setting up direct debits, to verifying purchases, and more. . A third of consumers would even be happy to do so every time they log into their account.
Biometrics can dramatically improve security measures, without adding unnecessary friction to the process. For example, combining facial recognition with liveness detection can not only prevent spoofing attacks, but also provide a safe and convenient way for users to verify their identity. Going a step further, the addition of independent app-based biometrics enables simple two-factor authentication, while simultaneously ensuring that users continue to have access to their accounts, even if they lose or change credentials. device.
Additionally, financial institutions with digital identity verification processes can also enable their customers to prove their identity without sharing unnecessary information, through privacy-enhancing technologies such as zero-knowledge proof. For example, when signing up for an account, customers can use their digital ID to accept “yes, I’m over 18” rather than sharing their full date of birth details, further reducing the risk of identity theft and fraud.
In fact, the combination of biometric technologies with digital identity verification ensures that customers are protected on all fronts. Financial organizations leveraging these assets as part of their identity checks can benefit from remote identification and verification without the need for human intervention, thereby reducing costs, providing a fully self-service user journey and a fast, accessible and efficient experience.
Go digital or go home
It will always be necessary to ensure that identity theft and fraud risks are protected against identity theft and fraud risks, but what is more important than ever is that not Not taking advantage of the benefits of digital identity verification may actually impact customer acquisition, as consumers see this as a key feature of the financial service providers they interact with online.
While government and consumers are both making noise that signals a shift towards digital identities, it is crucial that financial services firms stay ahead of the curve and begin, and even continue, to adopt this form of technology to protect against fraud. While two-thirds of consumers (61%) think their bank has done more to protect them from fraud and online identity theft since the pandemic, only a third (34%) say it’s due to the introduction of more online identity checks. Now is the time for financial institutions to change that percentage and reap the benefits of digital identity solutions or risk losing consumer trust and ultimately loyalty.