Chief Executive Officer, President & Board Member at Mitek Systems
Over the past few months, many of us have experienced Zoom fatigue. As humans, we find it hard to pick up on social cues coming from the other side of a computer screen. Whether we realize it or not, in the background of any video conversation, we are evaluating – biologically hard-wired to figure out whether we trust out counterpart, and continuously reassessing the situation. Akin to a software update, it saps energy and often leaves us feeling exhausted.
The same principle applies to businesses, financial institutions, e-commerce and sharing economy interactions, where consumers can’t ‘see’ for themselves who they are dealing with online. Now that COVID-19 has dramatically increased the need for digital touch points – reportedly up to a third of consumers have been targeted by fraudsters since stringent restrictions on life were partially lifted – trust across many sectors has suffered.
Where there is no confidence, the economy can’t thrive
In the ‘next normal’, economic recovery will be digital. Enabling digital trust will be key while uncertainties over vaccine viability and availability remain. The World Bank forecasts a 5.2 percent contraction in global GDP this year. The good news is that this predicament is not yet history. Therefore, we can still change it, and set ourselves up for growth next year.
Trust will be central to this recovery. And while much has been written about trust in the context of the handling of and reporting on the pandemic around the world, less information is available on how the health crisis has affected the relationships between businesses and consumers.
Today, the loss of trust is three-dimensional
First, we know that companies trust customers less when they sign up for services digitally versus in-person, according to a recent Grant Thornton report commissioned by Mitek. Fraud and non-compliance risks demand that all consumers’ identities are digitally verified to ensure they are who they say they are, and minimize the possibility of synthetic identities, deepfakes or impersonations. With the pace of tech innovation and the ingenuity of fraudsters evolving rapidly, businesses can’t afford to compromise.
Second, customers trust their service providers and vendors less than before with safeguarding their personal information and identity data, according to the same report. Consumers now understand better how data collection is handled and how their data is used, as well as how it can improve their customer experience. However, they question whether the data they share actually translates into the benefits they expect. Many have been spooked by high profile fraud cases like Wirecard, questioning if the convenience of fintech providers and neobanks really does outweigh the risks.
Third, when it comes to sharing economy platforms, consumers are now likely to be less trusting than before. Irrational fears can take over, and right now, they’re at their peak. As coronavirus lingers, and trust is at its lowest, the sharing economy suffers. How do you trust a total stranger that their vacation home is squeaky clean? Or that your rental car has been fully disinfected? Without this trust, many consumers will simply turn away.
Does a tried and tested solution exist? Yes, technology is the answer
As a society, we are now in search of that panacea that will bridge the physical world that we know with the digital world we have moved to. When we can’t look someone in the eye, how else can we establish trust, quickly?
Digital identity verification solutions tick all three boxes. It is the magic potion, the ‘Intel Inside’ type assurance for businesses and consumers alike. It ensures that each party knows who or what they are dealing with online, creating that vital tech-enabled basis for trust. Where we can’t rely on our eyes or first impressions – our ‘gut feelings’ ingrained into our DNA demand to be satisfied. Having a secure digital identity verification step during the on-boarding process can be that clear marker of trust when forming a new consumer-business relationship or launching a new service. Using the technology routinely, for example to verify higher value transactions, means this trust doesn’t fade as time passes.
In today’s environment, could investment in digital identity verification deliver growth?
Of course, businesses may find it easier to invest in critical applications when times are good. However, when making investment decisions, we need to look beyond the headlines. Yes, consumer attitudes and market conditions can change overnight. But the need for best-in-class digital identity verification solutions will only increase. What’s more, the technology could become indispensable for businesses positioning themselves as innovative, secure and customer centric.
Boston Consulting Group predicts that public transport and ridesharing will have a long road to recovery post-COVID as consumers plan to walk more often and increase their use of private cars, bikes, or scooters. Yet, as the sharing economy continues to take over the whole transport mix, the need for safe and secure digital payments will only grow. In other areas, global e-commerce is projected to balloon into a £5.15 trillion industry in just a few years’ time, with many more modes of payment and online platforms available.
Despite the ongoing uncertainty, consumers are still willing to experiment. According to McKinsey, 71% of consumers have tried a new shopping or payment behavior during the pandemic, potentially opening doors to many challengers to turn newcomers into loyal customers. And while historically, when shopping in regular ‘brick and mortar’ stores, it was location and brand name that inspired consumer confidence, digital identity verification is a more certain way to promote trust in the e-commerce driven ‘new normal’. This is because this cutting edge technology protects businesses and consumers alike – instantly signalling the brand means business and making it indispensable for challenger organizations.
As we look for the recovery of global economies, digital transformation must and will be in the driving seat. We’ll start to see that businesses proudly wearing trust on their sleeve via digital identity verification capabilities will help cultivate much-needed confidence in digital environments – and they are set to win big. After all, can anyone argue that digital trust is quickly becoming the vital business differentiator that no money can buy?
Chief Executive Officer, President & Board Member at Mitek Systems
Original Post: https://www.linkedin.com/pulse/trust-most-valuable-currency-digital-generation-max-carnecchia/