PYMNTS’ June 2021 Authenticated Payments Report done in collaboration with LoginID doesn’t mince words when it comes to the digital onboarding tsunami now sweeping across finance.
“Onboarding processes set the tone for the entire relationship a customer has with a financial institution (FI), and the reality is that these relationships often start off on a bad foot,” per the new report.
It continues, “Digital onboarding is often plagued with time-consuming identity authentications, redundant application forms and sluggish process times, factors that drive up to half of bank customers to abandon an onboarding process at some point in their lives. This does not mean that customers abandon digital banking altogether.”
The new onboarding should be about balance — in frictions and in processes — making authentication experiences the first, best chance to convert new customers. It’s a new classic situation where an FI, merchant or brand typically gets one shot. They don’t want to blow it with onboarding that isn’t up-to-snuff for millions of digital-savvy post-pandemic consumers.
Fighting Back Using Better Tech
As companies seek optimal onboarding experiences going forward, a suite of interwoven technologies is now streamlining the process, uniting and security with a dash of minimalism.
According to the Authenticated Payments Report, “Many FIs are deploying biometric systems like voice recognition, facial recognition or fingerprint scans, as 95 percent of customers approve of these technologies … and seek out banks that offer them. The other promising technology for smooth yet secure onboarding is document identity scanning, which uses an artificial intelligence (AI)-powered analysis system to scan customers’ identity documents through their smartphone cameras” instead branch visits and older more cumbersome ways.
New security tech is also ascendant partly because legacy defenses are more easily compromised, and consumers simply don’t trust them as much as they once did.
“A recent survey found that 10 percent of consumers would rather get a root canal than create unique passwords for all of their online accounts,” the report states, “and many customers recycle the same passwords among multiple websites. One-third said they try to create passwords that are tough to guess, but often use birthdays, pet names, mothers’ maiden names or other easy-to-guess words and phrases.”
A Multilayered Defense Works Best
Pointing to an increase of close to 300 percent in account takeovers (ATOs) between 2019 and 2020 alone, LoginID CEO Simon Law told PYMNTS that “users may try to secure their accounts with an SMS code, [but] they are vulnerable to sophisticated attacks like SIM swaps.”
That’s not cutting it as fraudsters collect and trade stolen passwords endlessly recycled by consumers for credential stuffing attacks that are leading to alarming spikes in successful fraud.
To head this off, “banks are looking for evidence of bot activity, like jumps in traffic or login attempts from unusual locations at abnormal times of day,” per the Authenticated Payments Report. “Fraudsters are growing smarter in their methods, though, and a multilayered defense that deploys a variety of security measures is likely to be the most effective.”
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