How to overcome consumer concern over data privacy
Rapid digitization has been a disruptive force for many industries. While leaders across several sectors recognized the need to speed up digital adoption to be competitive, it came at the cost of fraud and not being able to meet consumer privacy concerns. When it comes to identity verification in all digital transactions, businesses must pause now to ensure that they are employing technology that allows them to be competitive by being more efficient at onboarding consumers in a purely digital way, but that they are also choosing technology that is privacy-minded and preventing new digital fraud.
The IDology team identified three takeaways from our recent conversations with our customers that can empower businesses to manage consumer demand for privacy, drive growth and stay compliant.
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 Fifth Annual Consumer Study found that 65% of consumers showed concern over companies collecting 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. Businesses that don’t consider these privacy concerns risk creating a drag on profits while compromising the end-user experience.
2. Businesses can collect what they need to meet regulatory requirements while respecting consumer privacy
Providing a streamlined onboarding experience is critical in driving more revenue. Companies need a way to collect PII responsibly given consumer privacy concerns. The challenge is to collect the data necessary to stay compliant, foster consumer trust and keep friction minimal.
Since Know Your Customer (KYC) checks are the foundation of onboarding and compliance, identity verification 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 a business 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 and when it is needed. Thirty-seven percent of consumers abandoned signing up for a new online account last year because the process was too difficult, time-consuming, or untrustworthy. 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. Navigating an evolving privacy landscape requires the right partners and technologies
Developing a holistic consumer identity in high resolution enables firms 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 higher risk 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.
With the right identity solutions partner, businesses can take control of a highly volatile digital environment. IDology offerings allow businesses to be more competitive by creating better digital experiences for every customer, effectively cutting through the
Read our State of Fraud 2023 for more insight into how to proactively detect and prevent attempts at fraud, cybercrime and financial crime.