By Philipp Pointner, Chief of Digital Identity at Jumio
With the recent revelation that Facebook is allowing sales of thousands of people’s personal data for as little as 16 pence – it’s clear that nowadays keeping personal information private is no easy task. This rings especially true for financial organisations as they navigate the never-ending scrutiny to protect their customers’ finances by ensuring those accessing funds, making transactions or taking out loans are who they claim to be.
With the unprecedented rise in cyberthreats compromising our personal data, consumers are calling for a new level of assurance when engaging with brands online. In fact, our recent survey found that over two-thirds of consumers globally (68%) think it’s important to use a digital identity to prove who they say they are when using a financial service online. What’s more, over half of UK consumers specifically (57%) say they would be more likely to engage with an online financial services provider if it had robust identity verification measures in place.
It’s therefore vital that financial institutions ensure the methods they implement for verification are robust, in order to successfully build an ecosystem of trust across the plethora of services they offer.
And so, unsurprisingly, the question on everyone’s mind is: with identity verification methods becoming a differentiating factor for financial organisations, how can they deliver this in a way that doesn’t jeopardise customer convenience and experience?
Take the first step with digital identity for identity verification
Consumers typically face clunky authentication processes because financial services tend to take a one-size-fits-all approach to verifying customer identity — treating all customers as a potential threat and implementing lengthy verification processes so that the risk remains low. As a result, customers are left with an arduous process, leading to drop-off rates as high as 75% during the sign-up process.
To combat this challenge, digital identity verification solutions can be an effective yet convenient option for financial institutions. Our research revealed that half of Brits (50%) constantly or often have to use their digital identity to access their online accounts and verify their identity following the pandemic. And with the UK government moving toward the use of digital identities to tackle fraud, this is the most logical step for financial institutions.
Biometric technologies can provide a cutting-edge solution
Biometrics can significantly enhance security measures without adding unnecessary friction to the process. For example, coupling facial recognition with liveness detection can not only prevent spoofing attacks but is also a secure and convenient way for users to verify their identity. Going one step further, adding an independent, app-based biometric allows for easy two-factor authentication whilst simultaneously ensuring users continue having access to their accounts — even if they lose or switch their device.
Additionally, financial institutions with digital identity verification processes can also allow their customers to prove their identity without sharing unnecessary information, through privacy enhancing technologies such as zero knowledge proof. For example, when opening an account, customers can use their digital ID to accept “yes, I am over 18” rather than sharing the full details of their date of birth, further reducing the risk for identity theft and fraud.
In fact, combining biometric technologies with digital identity verification ensures customers are protected on all fronts. Financial organisations leveraging such assets as part of their identity checks can benefit from remote identification and verification without the need for human intervention, thus in turn reducing costs, providing an entirely self-service user journey and a fast, accessible and efficient experience.
As if the security benefits weren’t enough, customer demand for seamless verification methods should be.
Even customers recognise the need for seamless verification. In fact, the majority (71%) of UK adults say that they feel comfortable using biometric identity verification to use online financial services, from their fingerprint (52%) to their face verification (36%). Consumers say they’d also be happy to use biometric identity verification when carrying out a range of financial actions, from bank transfers to setting up direct debits, verifying purchases, and more. A third of consumers would even be happy to do this every time they log into their account, making it clear digital identity solutions for verification should go hand in hand with biometrics.
Digital identity is the future
With the changing attitudes of both government and consumers signalling a shift toward digital identities, it’s crucial that financial services organisations stay ahead of their competition by embracing this form of technology to protect against fraud. While nearly two-thirds of consumers globally (61%) believe their bank has done more to protect them against fraud and online identity theft since the pandemic, only a third (34%) say this is as a result of implementing 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.
