Lendit Fintech’s annual conference is an industry-leading event that provides critical best practices on key trends. The IDology team attended the event and found consumer privacy to be a major theme. Approximately 149 million Americans don’t think companies do enough to safeguard their information, so it doesn’t come as a surprise that consumer skepticism over data privacy was so prominent.
The IDology team identified three takeaways lenders need to consider in order to properly manage consumer demand for privacy. Taking advantage of the below insights can empower lenders to locate and approve new customers while mitigating friction and streamlining the customer journey.
1. Consumer concern over data privacy is changing the digital landscape
Consumers are suspicious of how companies collect their Personal Identifiable Information (PII) and are actively looking to ensure their data is not misused. Our 4th Consumer Study found that 70% of Americans suspect companies collect data without their permission and 90% support new privacy regulations at the state or federal level.
This creates a premium on trust, especially during the identity verification process. Consumers that don’t trust a verification process are more likely to use guest checkout and less likely to keep a payment card on file. Lenders that don’t seriously consider these privacy concerns risk creating a drag on profits while compromising the end-user experience.
Conducting business in the face of mounting consumer concern over data privacy requires the lending industry to transact with trust. However, that doesn’t mean lenders don’t have tools available for collecting data.
2. Lenders can provide better data insights with a lighter touch
Providing a smooth streamlined onboarding experience is a critical pillar in driving more revenue. With privacy concerns changing the digital landscape, lenders need a way to responsibly collect PII. The challenge is to collect the data necessary to stay compliant, foster consumer trust and keep friction at a minimum.
Since Know Your Customer (KYC) checks are the foundation of onboarding and compliance, identity verification and validation is the first and most necessary step in the onboarding process. A ‘soft’ KYC check could be performed prior to a fuller check, or as an authentication tool after initial onboarding. Performing lighter touches allows lenders to evaluate risk while only asking consumers for PII they deem to be less sensitive – name, phone number, and email address.
The key point is to do more with less, to only request what information is needed, when it’s needed. 93 million Americans abandoned signing up for a new online account last year because the process was too difficult, too time-consuming, or didn’t seem trustworthy. Don’t let unnecessary friction push privacy-conscious consumers out of your onboarding process. Incorporating lighter touches can foster friendly, non-intrusive, experiences that minimize friction
3. Create a fuller picture of customer identities
Developing a holistic consumer identity in high resolution enables lenders to onboard customers quickly and deliver customized experiences. This means fast-tracking access to products and services for legitimate customers and applying friendly friction as needed for suspect identities. Using robust data that fuels IDV makes it possible to keep potentially valuable customers in the pipeline while delivering the speed, simplicity, and convenience they expect.
Lenders face a competitive market to drive revenue by locating and smoothly onboarding legitimate customers with a secure frictionless journey. In fact, 86% of businesses view identity verification as a strategic differentiator, allowing them to capitalize on digital adoption while delivering a seamless customer experience.
Being able to work behind the scenes to build a fuller picture of potential customers will empower The leading industry can make strong business decisions. Making ‘softer touches’ with minimal consumer friction allows for a scalpel approach to data collection. To learn more about how to transact with trust using identity verification download IDology’s sector spotlight on the lending industry.