woman holding smartphone and credit card

Cutting-Edge Consumer Authentication Is Smart Marketing

This blog is created as part of a collaboration between HID Global and Money.com. 

Know Your Consumer (KYC) compliance and risk management aside, there’s an upside to seamless consumer authentication — an entirely customer-centric bonus that sometimes gets lost in bankers’ decision-making processes. It won’t be lost on your sales, marketing, and customer experience teams, though. Having top-notch consumer authentication technology can drive new client acquisition and build brand loyalty for your financial institution. And particularly right now, a year into the COVID-19 financial crisis, winning new customers and keeping current ones satisfied are more pressing concerns than ever before.

Should You Edit Your Playbook?

You may want to do just that, based on a shift in consumer attitudes, financial concerns and banking habits. A study conducted by leading financial consulting firm PwC concluded that while 71% of consumers of banking services are content with their bank’s response to the crisis, they’re also seeking new bank relationships. Some 40% of the 6,000 consumers surveyed already have banking relationships with more than one institution, which means you could be getting more of your customers’ business. In addition, 14% of survey respondents said they were likely to switch primary banks within six months. A third of these consumers indicated that before the global pandemic, switching wasn’t on their minds at all.

Not surprisingly, COVID-19 lockdowns and social distancing have benefitted the direct banking and financial technology (fintech) industries and, by many analysts’ predictions, consumers’ use of fintech apps will continue post-pandemic. Once consumers find something that makes life more convenient, they’re unlikely to give it up. Traditional banks would be wise to up their games to protect the business they have.

What Do Financial Services Consumers Care About?

Institutions that aren’t using the most current financial technology may be in a decision-making danger zone: not knowing what they don’t know. With limited digital capabilities, they can’t easily analyze consumer behavior. But even without doing their own deep dive into consumer data, there’s plenty of secondary research available that illuminates key customer needs.

If you’re old enough to remember what it used to take to open a bank account — a trip to a physical branch, a face-to-face conversation with a bank representative, a paper deposit, and more — it’s a little tough to get your mind around how impatient consumers are today. The advent of online shopping may be the cause and is certainly exacerbating the “patience problem.” We know that, across all industries, shopping cart abandonment is pervasive, due in large part to consumers’ expectation of a flawless digital experience. Nearly 70% of carts are abandoned before purchase completion and 8% of shoppers navigate away from a page if they have to wait three seconds for it to load. Speed counts — big time.

Other Top Consumer Concerns

What else matters to consumers? Safety, privacy, and trust. During the global pandemic, they’re relying on their digital identities more and more often just to carry out routine activities, from grocery shopping to managing their financial affairs. At the same time, phishing scams and other cybercrimes are on the rise. The Federal Trade Commission alone received 4.8 million reports of identity theft in 2020 and many more incidents go unreported. Victims have suffered financial losses and have seen their world turned upside down. Many have been forced to turn to credit repair companies to undo the damage. The process of cleaning up one’s credit profile following identity theft is tedious and painful. Needless to say, the last thing a financial institution wants to have on its head is consumer blame for contributing to a problem of this magnitude.

Consumers also want to be seen for the individuals they are. Banks that demonstrate respect for their clients — and that means respect for their time and banking preferences — stand to rate high on a brand loyalty meter. But while consumers are willing to provide a great deal of personal data to receive superior, personalized service, they also look askance at financial institutions who gather mounds of data about them purely to market products and services that don’t interest them. Many successful online marketers are abandoning traditional marketing surveys as a path to personalization. Instead, they’re mining the data they collect in the course of conducting the business consumers care about to deliver a better user experience. According to a study by Futurum, some 76% of consumers express concern about the amount of data companies gather about them to provide their products or services. Brands have to hit the mark precisely, collecting just enough — not too much — personal information to reassure consumers of their good intentions. Fortunately, in North America, financial institutions rank third in the top five trusted establishments. But Futurum’s study reveals that only 41% of consumers report feeling that trust in financial institutions. Grocery stores outperform banks. Clearly there’s room for improvement.

AI-Assisted Authentication Targets Consumer Concerns

Whether you’re in the business of writing mortgages, providing personal loans or helping students fund their college educations, artificial intelligence (AI)-assisted authentication or adaptive authentic technology can help your organization deliver what consumers care most about.

Almost half of US consumers have walked away from opening an account because they found the process too time-consuming, too invasive or simply untrustworthy. AI-assisted authentication addresses each of these issues, creating a speedy and safe onboarding experience. HID Approve™ eases much of this friction by allowing users to verify their identity or approve a transaction in seconds with just one swipe on their mobile phones. Mobile banking is increasingly preferred by consumers who live or die by their smartphones. What’s more, the application can be fully integrated to your existing application or can be launched as a separate mobile application and adapted to your company’s branding.  This is an opportunity to promote your brand and own the positive experience consumers enjoy.

With HID Approve, information is exchanged between consumer and institution across encrypted channels. The software has been subjected to rigorous penetration testing and complies with all PCI DSS, NIST and FFIEC standards. It’s also resistant to the OWSAP Top 10 risks. Non-compliance penalties paid by financial institutions topped $26 billion over the last decade. No bank wants to be among the group that paid them. You and your consumers are equally protected by HID Approve.

HID offers end-to-end consumer authentication solutions that can easily integrate with your existing systems to deliver a more personalized user experience to each of your consumers. We’re paying attention to what your consumers care most about: speed, security and a bank that “gets them.” That’s how strong consumer relationships, brand loyalty and successful businesses are built and why you should establish a relationship with HID Global today.

Susan Doktor is a journalist, business strategist and principal at Branddoktor. She writes on a wide range of topics, including finance, technology and brand marketing. Follow her on Twitter @branddoktor.