All posts by Steve Pulley
Explore Experian’s insights for customer identity and its interrelationship with security, convenience, and personalization, from consumers and businesses Businesses often talk about creating the ultimate digital experience for customers but far less about the interrelationship between security, convenience, and personalization. This results in siloed security measures at major decision points across the customer journey. And, it’s a disconnect that’s perpetuated through equally siloed CRM systems that strive to identify customer preferences but fail to do so in a consistent and appealing way. The impact on consumers is that they are dragged through a maze of security and risk protocols while at the same time being targeted or re-targeted products and services that are not always relevant. We challenged senior executives at 650 companies to think about whether they can accurately identify their customers and meet their customers’ needs for a relevant experience to not only help them create a more trusted relationship with a consumer but also to reduce fraud losses. We also surveyed over 6,500 consumers who had a lot to say about what constitutes best-in-class digital customer experience. Perception versus reality Our study found that 95% of businesses worldwide believe they are accurately identifying their customers yet 55% of consumers don’t feel recognized. In our survey last year, 84% of businesses said that if they could better identify their customers, then they could easily spot fraud. However, 57% of business reported having significantly higher fraud losses this year versus last year. How can this be true if businesses are in fact as strong as they believe they are at recognizing their customers and thus, presumably by extension, fraudsters? This then begs the question: how are businesses defining “recognition” and is it really working? Are they recognizing a customer to a person or are they able to categorize a customer into prescriptive buckets such as broad demographic delineations? Expectations for customer engagement Our study also found that 74% of consumers say security is still the most important factor when deciding to engage with a business online. This has been a consistent finding over the past two years. In fact, consumers are even willing to give more personal information for greater security and easier access to their accounts later, once they are comfortable. Despite this, over half of businesses are prioritizing personalization over security when making improvements to their customer experience. Consumers acknowledged experiencing and appreciating the changes businesses are making to their digital experience however security remained to be their most important criteria for engaging or continuing to engage with a business. What now? Desires for ultimate experience and concerns for security are still shaping the digital relationship between consumers and businesses where identity is at the heart of every customer decision and interaction. We believe businesses will need to invest further in data, infrastructure, and advanced analytics in order to get to a point of truly recognizing a consumer digitally as opposed to categorizing for broad brush pseudo personalization purposes. Only then will businesses start to make a dent in fulfilling the high consumer expectations for recognition as well as in mitigating rising fraud. Download our report (15 min read) and find out more about: Challenges standing in the way of businesses trying to identify their customers What different businesses and countries are doing to improve identity authentication The new type of customer journey that executives believe will improve the digital experience
Across the globe, fraud risks continue to grow and businesses continue to invest more to combat potential threats. According to Experian\'s 2019 Global Fraud and Identity Report, which was published this past January, more than half of businesses across the world have increased their fraud management budget in the past twelve months. I recently had the opportunity to discuss this very topic with Forbes.com. In the article I raised the issue of whether businesses are investing in the right places. Our research shows that businesses may sometimes be investing in the wrong capabilities or point solutions that are materially less effective than if they were to take a layered approach to fraud detection. To provide consumers with both security and convenient online experiences, companies must have a complete understanding by looking at the problem holistically. By layering multiple approaches such as digital risk assessments leveraging device intelligence, behavioural biometrics together with more traditional measures – businesses can focus their resources where it matters most – providing a safe yet convenient online environment for their customers. The Forbes article also looked at the issue of trust. The anonymous nature of digital interactions makes creating trusted and meaningful relationships with digital consumers difficult. Unlike face-to-face interactions where people rely on visual cues, and relationships developed over time, businesses must find other ways to quickly recognize their customers online and deliver personalized experiences. At Experian, we believe trust is extremely important. In fact, the report found that nearly eighty percent of consumers say the more transparent a business is about the use of their information, the greater trust they have in that business. And fifty-six percent of businesses plan to invest more in transparency-inspired programs such as educating consumers, communicating terms more concisely and helping consumers be in control of their data. There is no doubt about it, businesses who want to continue to thrive and lead in the digital economy will find ways to offer their customers both security and convenience whilst building trust with their audience. Learn more the state of fraud and how trust plays a role by downloading our 2019 report: Consumer trust: Building meaningful relationships online.
Digital commerce has changed the way consumers interact with businesses. More people are transacting online versus going into retail stores, and more than half of banking is done via mobile channels. Yet both businesses and consumers still want convenience and security, without increased fraud risk. And as interactions have become more anonymous in an online space, trust is based on businesses protecting consumers from fraud while still providing a great customer experience. So, what does it take to build trusted relationships online? New research from our 2019 Global Identity and Fraud Report shows that 74% of consumers see security as the most important element of their online experience, followed by convenience. In the past, businesses have often invested in one at the expense of the other, and our research suggests that consumers can expect both security and convenience without the trade-off. The availability of information consumers share with businesses make this possible, and consumers are willing to share more personal information if they believe it means greater online security and convenience. In fact, our research found that 70 percent of consumers are willing to share more personal data, particularly when they see a benefit. However, this value exchange of more personal information for a better online experience is the same information that puts consumers at a greater risk for fraud. Instead, businesses need to demand more from the information they already have access to and use more sophisticated authentication strategies and advanced technologies to better identify their customers and deliver tailored, streamlined experiences without increasing their risk exposure. Findings from the study reveal that consumers and business leaders agree that security methods enabled by new technologies and advanced authentication methods instill online trust. In fact, consumer confidence grew from 43 percent to 74 percent when physical biometrics was used to protect their accounts. The report also found that businesses are beginning to embrace the changing technology, while half of organizations globally reported an increase in their fraud management budget over the past twelve months. And lastly, the report looked at transparency and how that impacts consumer trust. In order to create even more trust online, many businesses are proactively sharing with customers how they use their personal information. The report found that nearly 80 percent of consumers say the more transparent a business is about the use of their information, the greater trust they have in that business. And the good news is that 56 percent of businesses plan to invest more in transparency-inspired programs such as – consumer education, communicating terms more concisely, and helping consumers feel in control of their personal data. Fraud remains a constant threat and it should come as no surprise that nearly 60 percent of consumers worldwide have experienced online fraud at some point. However, both business and consumers are getting smarter about how they manage fraud and it comes down to the important theme of trust. In order for consumers to trust businesses, they need to feel secure. And by adopting better security measures, businesses can embrace the important role of protecting customers and giving them the experience they want and deserve. Download the new Experian 2019 Fraud & Identity report here.