Today we are living in the digital age – the information age. We have been for some time and therefore this isn’t new. In fact, I think most blogs you read now, or most research, brings digital into it as a front runner in what’s brought huge change – or challenge to UK businesses.
Digital has undoubtedly brought new opportunity. Today you can make payments globally – in an instant, shop in foreign places without being there in person, and speak with friends through social platforms, or through WiFi enabled technology such as Skype. It has also brought new opportunity for fraud.
Let’s rewind for a second before we expand on that point.
Today’s digital age is being fast-tracked by society who embrace the ease and speed of digital online interactions. The more it is consumed, the more of it they want. This digital marketplace has been predicated on trust. People expect businesses to protect them and their personal information – first and foremost. People expect businesses to have the knowledge of how to protect them at every point, on every channel including online.
Here we start to see a reliance on businesses to build services that are based on a knowledge of what’s safe to do, and what isn’t. That may be the case for new entrants – innovative businesses who are starting from scratch, but not the case for traditional businesses who are entering a new territory that is relatively unknown and untested. As a result, businesses face a competing challenge of being on the backfoot of change, as they try and keep pace, but expected to be at the front foot of technology, building security into the design.
In our Global Fraud Report, we can see this in the results with four out of five people believing businesses are prioritising their protection as a top priority.
In the same research, we see how almost three-quarters (72%) of businesses cite fraud as a growing concern and nearly two-thirds (63%) report the same or higher levels of fraudulent losses in the last year.
Nonetheless, people are feeling reassured. Perhaps this has faltered at times where there are highly publicised breaches of security, but in general they are assured. Why is this? Predominantly it is a result of the visible signs of security they encounter when accessing their online accounts. This leads them to believe that the transaction is more secure. In fact, the lack of visible security was the number one reason customers abandoned a transaction.
In some ways, this data could lead you to believe that society tolerate the nuisance faced with the common barriers in place when accessing an account. For example, forgetting their password or having to re-enter other security controls. But don’t be misled, as ‘friction’ ranks the highest for not completing an application before any control mechanism is even brought into the discussion.
“People’s tolerance for friction for the sake of security varies across the 11 countries surveyed. For example, people in India and South Africa are more tolerant of security protocols because it makes them feel protected. On the other hand, those in Turkey are less tolerant.”
Given that one-third of the people surveyed said they would do more transactions online if there weren’t so many security hurdles to overcome, you should therefore interpret the findings with caution. Two thirds wouldn’t necessarily stop transacting if there weren’t signs.
Research shows younger people are less tolerant of security hurdles and are more inclined to engage online if there was less friction. These digital natives command excellence and force convenience in any transaction. You could argue they are shaping services today.
This brings me to question – what is the elasticity of friction?
For businesses, there is a delicate balance to achieve. They need to deliver an online experience that instils confidence with security protocols and makes customers feel safe and protected. This should all be done at speed and scale.
Given the differences in tolerance for friction across different markets and age groups, a global one-size-fits-all solution is difficult to achieve. It is also a moving target, as peoples’ tolerance for friction could lessen over time. Not to mention the expectations for a frictionless experience among future generations of digital customers that will likely be even more used to an online effective digital experience.
As security protocols transition to more data-driven, AI (artificial intelligence), or machine learning powered systems start to (and continue to) operate behind the scenes, businesses will need to gain and maintain the customer’s trust. Solutions that combine device information with other data points such as biometrics could help businesses in the future better recognise their customers – and do so effectively.
There are many considerations and options. It is our belief a digital identity will transform the process. We have been working with the Government to roll out digital identities through Gov.UK verify. This concept, a digital ID that is a single trusted sign on, I believe will transform where we are today into where we should be tomorrow. By its nature it is digitally inclusive – it is quick – it relieves the burden of password fatigue and it is secure.
With many people already using a similar concept through their social media ID, this is one innovation that is perfectly aligned to both UX objectives, as well as fraud teams too. Furthermore, if you can know who you are dealing with – confirm they are genuine – then inevitably the risk of fraud will be reduced.
We have also invested heavily in a centralised fraud platform; CrossCore, to enable multiple, all, fraud controls to be connected in one place – giving you agility and speed in the digital environment. Here, you can connect multiple systems – introduce new innovative solutions (including Emailage and Biocatch), you can add your own, or our Experian technologies, and manage it in a centralised function. This is designed to relieve friction, converge systems into one and, at the same time, manage the ongoing threat we see from fraud across markets.