New Experian research examines key factors important for gaining consumer trust and confidence
Digital commerce has changed the way consumers interact with businesses, moving from face-to-face transactions to anonymous relationships built on trust. Trusted online relationships are based on businesses providing a secure environment and a great customer experience.
Experian’s Global Identity and Fraud Report, released in January 2019, found that 74 percent of consumers see security as the most important element of their online experience, followed by convenience.
“Security and convenience are the bedrocks of a dynamic digital marketplace that effectively manages risk and delivers a seamless experience,” said Steve Pulley, Experian’s executive vice president, and general manager of Global Identity & Fraud Solutions. “The availability of information consumers share with businesses makes this possible, but it’s the same information that puts them at a greater risk for fraud, making trust more important than ever.”
Findings from the study reveal that 70 percent of consumers are willing to share more personal data with the organizations they interact with online, particularly when they see a benefit such as greater online security and convenience.
Consumers and business leaders agree that security methods enabled by new technologies and advanced authentication solutions instill online trust, the study also revealed. In fact, consumer confidence grew from 43 percent to 74 percent when physical biometrics was used to protect their accounts.
“Trust begins with a business’s ability to deliver more from the information they already have and to use advanced technologies to identify their customers and provide a relevant experience without increasing their risk exposure,” added Pulley. “In other words, consumers really can expect both — security and convenience.”
The report went on to discuss how 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. Fifty-six percent of businesses plan to invest more in transparency-inspired programs such as educating consumers, communicating terms more concisely and helping consumers feel in control of their personal data.
To develop the study, Experian interviewed more than 10,000 consumers and more than 1,000 businesses across 21 countries around the world. Additional findings from the third annual fraud report include:
- 55 percent of businesses reported an increase in fraud-related losses over the past 12 months, particularly account opening and account takeover attacks.
- 60 percent of consumers globally are aware of the risks involved in providing their personal information to banks and retailers online.
- 90 percent of consumers are aware that businesses are collecting, storing and using their personal information.
- Banks and insurance companies are the organizations trusted most by consumers across most regions. Online retail sites and social media sites trail considerably on trust.
- Nearly nine out of 10 consumers report conducting personal banking as their top online activity.
- Passwords, PIN codes, and security questions remain the authentication methods most widely used by businesses, followed by document verification, physical biometrics, and CAPTCHA.
The Global Identity and Fraud Report also shows how different regions across the globe view and manage fraud:
- Concern for fraud and increased fraud losses are highest among businesses in the United States.
- The greatest number of consumers who already have experienced a fraudulent event online are in the U.S., with the lowest number of consumers from EMEA.
- The U.S. and the UK lead with the biggest increase in fraud management budgets over the past 12 months, with three-quarters of businesses budgeting more for fraud management this year.
- Latin America is a top user of advanced authentication technology where CAPTCHA, physical biometrics and customer identification programs make up the top three authentication methods. This differs for businesses in other regions, which rely more heavily on passwords, PIN codes and security questions.
- Physical biometrics seems to have the largest positive impact on trust, particularly in Colombia and the U.S.
- The U.S. has invested the most when it comes to transparency initiatives in the past 12 months, and Colombia has the highest intent to invest more in the next six months.
The full Global Identity and Fraud Report can be downloaded here.
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