For the past five years, IDology has surveyed businesses across industries and reported on current fraud trends, providing useful insights and identifying emerging trends in the identity verification space. In the latest installment of this research, IDology’s fifth annual Fraud Report explores interesting changes and shifting threat vectors. A convergence of macro forces, from the maturity of EMV adoption to recent data breaches making personal information more available to the exploitation of mobile vulnerabilities, is pushing customer-not-present fraud to new levels. Sixty-seven percent of businesses reported fraud increased this year, a 58% increase from 2016. Among the many insights found in this year’s data, one stands out: the pressure to minimize customer friction.
In this year’s Fraud Report, 40% of respondents reported reducing friction in customer interactions was a challenge for their industry. Why is reducing friction so important to business and product leaders? Friction is the frustration caused by business processes that slow down or halt a customer’s access to a product or service. Friction is being put on hold for an hour, getting stuck in a long checkout line because only one register is open, and waiting for the cable repair guy who never shows up. Friction stops or delays revenue!
In today’s online and mobile world, consumers want to open accounts in the comfort of their own homes, with their own devices, on their own time; they don’t want to scan and fax documents (or worse, haul an armful of documentation to a physical location) to prove their identity. This process simply doesn’t mesh with modern customer’s expectations. Conversely, businesses need to know they’re working with a real person and not a fraudster. Whether in the customer-present or customer-not-present space, validating identity is essential to building a trusting, working relationship with a new customer.
Historically, the market trend is to throw up more barriers to prevent fraud at the expense of a good customer experience. In our digital, customer-centric business environment that is no longer acceptable. It can feel like a balancing act: more friction and less fraud, or less friction and more fraud. But that’s a false equivalency. It’s absolutely possible to improve the customer experience and deter fraud. How? By utilizing a streamlined verification process that escalates to additional authentication methods intuitively and only when necessary, employs invisible mobile authentication methods using real-time mobile carrier data, and applies smart layers of identity attributes that work together to analyze disparate identity characteristics. These are the key methods to a low-friction experience that can help you earn and keep customers.
We present data on reducing friction, and much more, in our Fraud Report. We hope the data, trends, and insights presented in the report will be helpful as you develop your identity verification and fraud prevention plans and strategies. Click here to download the report.