Digital commerce has altered the way consumers interact with businesses. In recent years there has been a move away from face-to-face transactions to anonymous relationships built on trust. This scenario is difficult to achieve and it is one earned over time. Trusted online relationships are based on businesses providing a secure environment and a great customer experience.
Experian’s Global Identity and Fraud Report has found that 74 percent of consumers see security as the most important element of their online experience, followed by convenience. To provide insight, Digital Journal spoke with Steve Pulley, EVP and General Manager of Global Identity and Fraud Solutions at Experian.
Digital Journal: How important is data for business?
Steve Pulley: Data helps businesses make the right decisions and turn insights into action. It is the foundation for creating the most relevant and personalized experiences for consumers. It also plays a pivotal role for brands that want to effectively identify and authenticate customers to better safeguard against fraud. Today, there’s an important value exchange between brands and consumers – consumer information helps companies deliver a better online experience.
DJ: Data breaches hit the news regularly, what are some of the reasons for this?
Pulley: Fraud risk certainly remains a constant and growing threat in today’s digital landscape and there has never been a more lucrative time to be a fraudster. It’s a low-risk, high reward endeavor, veiled by the anonymity of the Internet. Our study found that 55% of businesses reported an increase in online fraud-related losses over the past 12 months, predominantly around account origination and account takeover attacks. In the U.S. alone, 80% of businesses have seen their online fraud losses increase from 2017-2018.
While businesses have a responsibility to implement effective fraud prevention measures, consumers should be cognizant of the information they provide and they ways they protect it. There is an abundance of online and mobile services available, and consumers are sharing more personal data online than ever before. When they don’t protect their data with strong passwords or two-factor authentication, they become easier targets. We’ve also seen fraudsters become more prevalent and sophisticated, which means businesses should be extra vigilant.
DJ: The Experian report finds that many consumers are willing to share their data. Why is this?
Pulley: Today, consumers are expecting a safe and frictionless experience when using their payment information online, whether it’s for shopping or banking. For Experian’s 2019 Global Identity and Fraud report, we surveyed more than 10,000 consumers, and 70% said they would share more data if there was a perceived benefit, such as greater convenience but would only do so if they had established trust in the online property first. In the past, businesses have often invested in either security or convenience with one being at the expense of the other. Consumers now expect both, and with data, businesses can deliver both.
DJ: What do consumers expect in terms of data privacy from businesses?
Pulley: Consumers expect businesses to take care of their information and to be transparent about how this information is used. Despite the potential risks of sharing more data, consumers are willing to share their information in exchange for the perceived value. When it comes to transparency, 80% of consumers say the more transparent a business is about the use of their information, the greater the trust they have in that business. Ultimately, transparency, security and convenience are common denominators of trust, and trust is imperative because that’s what drives loyalty.
DJ: What do businesses need to do to better protect consumer data?
Pulley: While 75 percent of businesses globally reported an improvement in their online security over the past year, they have experienced increased fraud losses and new fraud attacks during that same period. In order to gain and maintain consumer trust and better protect their data, organizations should consider a three-pronged solution to deliver a safe and frictionless experience online:
Integrating the right fraud prevention tools and evolving them over time to stay ahead of the dynamic fraud landscape,
Implementing a multi-layered, continuous risk-based authentication approach that Includes both overt and passive measures when verifying consumers’ identities, and
Ensuring that your organization across the board has a comprehensive view of vulnerabilities.
Our data shows that consumers want visible signs of security when they are carrying out transactions online. When it comes to traditional methods, consumers ranked passwords, PIN code push notifications, and security questions as the top three methods that provide them with the most confidence in protecting against identity theft and fraud.
When thinking about top alternative methods that made consumers feel safe, particularly when banking, physical biometrics was noted as the top method. Organizations should implement a multi-layered approach with both traditional and alternative methods of security so that they can be sure they’re building confidence among their consumer base, which will, in time, lead to greater trust between the brand and its consumers.
DJ: How can businesses better build trust with consumers?
Pulley: Trust is earned over time, and while it can be a challenge to build with the anonymity surrounding online transactions as opposed to face-to-face interactions, it’s not impossible. The key to achieving trust in a digital landscape is to provide the security and convenience that consumers want and expect, and this can happen at the same time. The data that consumers share with businesses make this achievable, and customers are also seeing the benefit.
Additionally, transparency is a key builder of trust. Therefore, businesses should consider taking steps to ensure that they are transparent about how they are using their consumers’ information to protect them and create a better overall experience. This can be done with messaging on a brand’s website or an email notification depending on the type of business and how they interact with consumers. Building trust over time leads to strengthened customer loyalty, which is a key component of customer retention in the long run.
