Rewarding Customers Based on Digital Identity Trust
There’s no question that companies are undergoing digital transformations. They need to consider changing how they do business to exceed the expectations of today’s always-connected consumers. This is true now and in the future as life has changed post-pandemic. Customers want a friction-appropriate online experience in which the businesses they frequently interact with recognize them regardless of the device they're using. Customers expect access, convenience and consistency across all platforms and touchpoints, and businesses that don't embrace the changing technology will be left behind.
So how can companies achieve this level of identity trust without compromising their fraud prevention strategies?
Cybercriminals have become more and more sophisticated in their use of bots and synthetic identities. The increasing occurrence of global data breaches means stolen identity data is pervasive on the dark web and this gives fraudsters the information they need to masquerade as customers and perpetuate crime.
The answer lies with digital identity. It's time to start thinking of digital identity as not just a powerful approach to authentication and verification to prevent fraud, but also the key to winning big in a consumer-centric marketplace that grows more global and competitive by the day. The same technologies fundamental to cybersecurity are quickly becoming central to boosting growth and customer loyalty.
Today’s digital-savvy customer expects it all — speed, convenience and security. Security is now an assumption — and if you don’t get it right, you risk a decline in brand loyalty.
Welcome to the 'Now' Economy
Consumers around the world want what they want, when, where and how they want it. That means all mobile services and omnichannel experiences that companies roll out should deliver a personalized experience with speed, convenience and consistency at every touchpoint or risk customers leaving them for competitors.
Far too many businesses are unable to recognize a returning customer, let alone provide a personalized, secure and friction-appropriate experience. It’s also now increasingly easy for criminals to use stolen identity credentials to take over customer accounts, make illegal purchases, take out fraudulent loans, and more.
It's little wonder why fraud and security teams face more pressure than ever to scrutinize every customer and transaction at every step of the purchase journey. Modern, digital identity-based authentication systems can help solve these issues and much more.
Digital Identity: Ditching the Customer Disconnect
Today’s digital identity-based user verification and assessment solutions combine device, location, consumer behavior and threat intelligence with powerful machine learning and behavioral biometrics signals. This enables businesses to instantly recognize and reward customers with a streamlined user experience across their various channels.
These solutions can effectively help curb fraudulent behavior. Most transaction authentication is completely invisible to the user, and the small percentage of transactions that may require a little extra scrutiny can utilize friction-causing step-ups such as two-factor authentication.
The impact can be profound when utilizing a digital identity-first approach. Chargebacks, false declines and fraud losses go down. Customer satisfaction and loyalty go up. Digital identity delivers speed, security, convenience and consistency that customers have come to expect from businesses.
Less Risk, More Reward
Smart organizations are starting to see fraud prevention not merely as a cost center, but also as a means to generate new business growth in an era when the company with the best customer experience wins. Security and fraud teams need to seamlessly identify consumers across every touchpoint, but that same capability can help digital businesses reward customers in new ways.
When there's a high degree of certainty that a business is interacting with a legitimate identity — and that identity is showing trustworthy activity — it provides an opportunity for the business to reward the consumers it’s doing business with. A classic example of this is with online lenders that can offer instant decisions on loans when they trust the consumer they're doing business with.
Key to this is the ability to recognize the returning transacting user and assess the risk of the transaction based on the context, with the scale and quality of data sources needed to achieve high customer recognition rates and make quick and consistent trust decisions.
Tough Work, Big Payoff
Keeping up with consumer expectations can be hard to do, but the payoff may be huge for those that succeed. Businesses that excel in consumer experience earn stronger loyalty and boost lifetime values. Consumers will defect from companies that are unable to deliver the experience they want and they’ll give their business to those that can. That’s the crux of why digital identity trust is important.
When customers connect with you, they expect you to remember them and treat them well, regardless of the channel they’re using. Companies that consistently deliver a positive digital experience for users end up building powerful brand loyalty. However, that loyalty can’t come at the expense of increased fraud.
Soudamini Modak is director, fraud and identity at LexisNexis Risk® Solutions, a company that uses big data, proprietary linking and targeted solutions to provide insights that help make organizations more secure.
Related story: Beating Online Retail Fraudsters at Their Own Game
Soudamini Modak, director, fraud & identity at LexisNexis Risk® Solutions, supports the company’s digital assessment strategy as a part of the Fraud & Identity market strategy team. Leading market prioritization and sales enablement for our digital risk solutions and platform, Soudamini focuses on understanding customer and market needs to drive prioritization of product roadmaps and driving key digital initiatives. Soudamini has over 10 years of experience across consulting, strategy and product development. Soudamini joined LexisNexis® Risk Solutions through the ThreatMetrix acquisition in 2018. She holds a Master of Science degree in Information Systems from Santa Clara University.