Consumers may be stuck using the outmoded authentication system, but most prefer more sophisticated methods.
Traditional use of passwords currently remains the most prevalent method for digital activities, despite recent advances in online data authentication. The PYMNTS collaboration with Entersekt, “Visible and Invisible Security: Perceptions in Digital Banking,” finds 65% of consumers verified at least one online financial activity or transaction with a password within 30 days previous to being surveyed. However, as the accompanying chart included in the report indicates, only 25% of consumers prefer using passwords as an authentication method. This is despite that 52% of consumers who have used biometrics prefer the method, making it the most popular option.
While passwords may still be the most common way of online authentication, biometrics seems to be catching up. Of those surveyed, 36% of banking customers want their primary institutions to offer more visible security measures and 27% want these additional measures applied to everyday digital activities. The “Consumer Authentication” report found that 47% of consumers authenticated at least one online financial activity or transaction using biometrics in the 30 days previous to being surveyed. While this usage rate remains nearly 20 percentage points behind password use, biometrics is not nearly as commonly available, which could account for part of this difference. And given that 52% of consumers who have used biometrics prefer this authentication method, its usage rate may increase as the option becomes more widely available.
As well, 31% of surveyed respondents overall agreed with the sentiment that biometric authentication provides the most secure form of online identity authentication — more so than other selected methods. Of those who prefer biometrics as an authentication method, 68% of consumers who do so cite convenience as the primary reason for their preference, with 67% citing ease of use. Further down the list of importance for this consumer segment was security, with only 44% of those surveyed citing the benefit.
Passwords, practically, may remain the most used authentication method for digital activities for the near future. However, banks and other consumer-facing institutions may consider embracing biometrics proactively instead of taking a “wait and see” approach. After all, if a business or bank falls behind the competition when offering the additional visible security measures consumers prefer, they may find themselves ceding customers to a competitor that does.