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Trust can be an elusive commodity and difficult to establish between consumers and businesses in an online world. So what does it take to build trust online these days? To find out, Experian surveyed more than 10,000 consumers across 21 countries representing nearly 40,000 devices, 85,000 online accounts and more than 480,000 online transactions. The result is the 2019 Global Identity and Fraud Report. This year's report revealed what matters most to consumers to gain their trust and confidence in the growing digital world, and how businesses are responding.
Fraud Risk Remains a Growing Threat
Over the past 12 months, 80% of businesses in the United States have seen their online fraud losses increase, according to the report. This could be the result of fraud moving from card terminals to online and mobile channels since the adoption of chip cards. That means that even the market that is most effective in mitigating online fraud has potentially left a full third of its online customers vulnerable.
More than 2 in 5 consumers worldwide have experienced an online fraudulent event at some point in their lives.
Consumers Want Security and Convenience
While trust can be earned over time, people expect to be recognized and have a personalized experience these days. Businesses, in turn, are faced with getting it right the first time to provide those experiences and relevant information to them. The survey found that in almost all cases these interactions lack a human touch and subtle cues that typically allow trust to be built quicker.
That said, the survey found that 70% of Americans would undergo a more thorough identity-vetting process when opening an online account if it meant they'd have an easier time accessing their account once it was established. Furthermore, the survey results say that transparency about how consumers' information is used to protect them and create a better overall experience is paramount for creating a trusted relationship. Nearly 80% of consumers said that the more transparent a business is about the use of their information, the greater trust they have in that business.
Consumer Confidence in Security Is Still High
Visible signs of security, such as touch ID or two-factor authentication, remain important for 66% of online consumers worldwide and in the United States. Additionally, 74% of consumers indicated they have greater confidence in businesses that use physical biometrics, such as a fingerprint, eye scan or facial recognition, with their security. The use of biometrics seems to have the biggest positive impact on organizational trust in the U.S., according to survey responses.
74% of consumers have more confidence in businesses that use physical biometrics for security.
The report states consumers are more likely to abandon online transactions on websites if they don't see any signs of security when they're making their purchase. By contrast, they will work through more time-consuming, but confidence-inspiring, security methods to complete a transaction, such as a PIN code push notification to their smartphone or username or password reset.
Transparency Leads to Trust
Another important takeaway is the possible value created by being more transparent and open with customers about the use of their information, and customers' willingness to participate in that value chain. The report states that 90% of consumers are aware that businesses are collecting, storing and using their personal information. Most consumers have also resigned themselves to the fact that providing their personal information increases their risk of fraud as a price they pay for convenience. But nearly 80% of consumers felt strongly that businesses should be fully transparent about how that information is being used.
8 out of 10 consumers believe it's important for businesses to be transparent about the use of their personal data.
Despite the potential risks, consumers are still willing to share information in exchange for perceived value. Two-thirds, or 60%, of consumers responded that they would share more information for better security or convenience, and believe the benefit is greater than the perceived risk. In fact, 67% are willing to share information to get more personalized goods and services in return.
Growing a Positive Experience
If businesses can provide transparency around how they use their customers' information, they can go a long way toward creating more trust. Around the world, consumers are recognizing the growing fraud risks related to online transactions, and businesses are investing more time and resources in fraud management.
Most consumers are not aware of what happens behind the scenes to keep them safe while they do everyday things, like shop online or check bank balances from their phone. That's how it should be. And as the report summarizes, as fraud prevention continues to mature, it will only further contribute toward a positive experience for its customers.