PYMNTS Intelligence: How Behavioral Analytics Can Ensure a Smoother and More Transparent Authentication Experience

Trust drives consumer experiences, and it can be negatively impacted in countless ways. An inconvenient login or checkout experience harms a customer’s trust in a merchant, and a false positive fraud flag can alienate a previously loyal customer. Consumers whose trust is breached will often abandon a company altogether, even in the middle of a transaction.

Providing seamless and transparent experiences is critical to fostering customer trust and ensuring a long and prosperous relationship. High friction is responsible for up to 75% of customer abandonments, so removing this friction and ensuring transparency at checkout and sign-up are top priorities for any business that regularly interacts with consumers. Maintaining seamlessness while protecting against fraud can be a tall order, but behavioral analytics systems are up to the challenge.

This month, PYMNTS Intelligence examines how inconvenient customer experiences can drive abandonment and how behavioral analytics can build consumer trust through seamless and secure experiences.

Frictions in Traditional Identity Verification Methods

One of businesses’ greatest concerns, especially in the retail industry, is customer abandonment. An American Express survey found that 78% of shoppers have withdrawn from a purchase due to a negative user experience, and 91% of them will never patronize the business again. Another study found that 81% of all online shopping carts are abandoned, with almost 85% of purchases going uncompleted in certain verticals, such as the travel industry.

The travel sector’s high rate of cart abandonment makes perfect sense, considering how many verification checks are required to travel by air. Customers must verify not only their credit card purchases but also their identities when purchasing plane tickets, particularly when traveling abroad. Remembering passwords, entering passport details and looking for multifactor authentication codes are all hassles that can make customers abandon interactions entirely and attempt to find alternative providers with smoother verification experiences.

Those merchants and businesses that can offer smoother authentication can be well rewarded. More than half of consumers in a recent survey said a faster, more convenient shopping experience would make them more likely to complete their purchases, with this share increasing to 71% among millennials. Behavioral analytics not only provide a more seamless and transparent online experience, but they can also be a key tool in determining exactly what obstacles customers face and what steps should be taken to smooth them.

Improving Transparency and Seamlessness via Behavioral Analytics

Customers’ breaking points when it comes to friction are as diverse as the customers themselves, so the first step to improving seamlessness is finding the friction points in question. Behavioral analytics systems are critical for figuring out exactly where customers are getting stuck by identifying the specific points in the process where customers decide to click away, allowing user experience staff to make adjustments quickly and precisely to smooth out the customer experience. Some common examples of checkout improvements are adding credit card autofill options and removing the requirement to reenter passwords if users are already logged in.

Another key area in which behavioral analytics can reduce friction and improve transparency is by cutting back on false positives, which can be a death knell for a customer login or purchase. Businesses mistakenly decline purchases up to 43% of the time by falsely identifying legitimate customers as fraudsters, according to a recent study, causing an exodus of customers from both their immediate purchases and any potential future shopping with those merchants. Behavioral analytics technology can reduce the false positive rate to just 0.02%, resulting in annual revenue gains of up to $1 million per year in reduced customer abandonment.

Ensuring a transparent and seamless customer experience while keeping fraud to a minimum can be a difficult balancing act if businesses lack the tools to facilitate both at the same time. Behavioral analytics are a vital means of meeting these competing objectives and thereby building customer trust.