Higher volumes of consumers are continuing to shop online even as brick-and-mortar stores reopen. Businesses and financial institutions (FIs) are following suit, reordering their products and services for a new digital normal — but unfortunately, fraudsters are tagging along.
The expansion of digital banking and payments has also contributed to a rise in cybercrime — 32% of consumers noted in one study that they had been the targets of COVID-19-related fraud, for example. These bad actors are tapping everything from tried and true phishing schemes to tailored identity theft to scrape data from these digital sites, and not properly protecting against these efforts can lead to significant strain. Having robust verification tools in place during the digital onboarding experience — including tools that can help verify users’ email addresses and payment details — is one way to help establish consumer trust, as well as keep fraudsters at bay.
The October “Digital Consumer Onboarding Tracker®” analyzes how the ongoing pandemic is continuing to affect consumers’ shopping habits as well as fraudsters’ attempts to worm their way onto digital platforms. The Tracker also examines how employing email verification and other authentication tools during the onboarding process can help provide a seamless yet secure experience for consumers.
Around the Digital Onboarding Worl
d
Consumers are still placing a premium on speed, with many looking to onboard with new banks or merchants as quickly as possible. Yet customers are still not completely comfortable sharing data through some of the methods that could add further speed into this experience, such as biometric identifiers like fingerprints or facial scans. One study found that while 70% of consumers are ready and willing to provide details like their birthdates or email addresses during onboarding, only a third of customers are willing to share such biometric data. This indicates that the use of authentication tools such as email verification will remain important for online businesses to get right during onboarding — despite the fact that their speed follows a half-step behind biometric authentication — in the next few years.
A speedy and transparent onboarding experience still remains critical to merchants as well as FIs despite lingering consumer wariness surrounding biometrics. J.P. Morgan Chase as well as brokerage firm BlackRock are partnering to bring this authentication to the backend, integrating new technologies into their onboarding process for further security. The two companies — along with a third-party technology provider — will be grafting artificial intelligence (AI)-enabled tools into the onboarding experience for the joint custody account product they offer together. Using AI-enabled solutions will let asset managers have more transparent access to data, according to both companies, allowing them to better track customers’ onboarding statuses.
The use of automated tools can also help banks or merchants shore up their security, a must at a time when the ongoing pandem
ic is providing fraudsters with more opportunities than ever. One study found that just about half of all new account sign-ups on eCommerce merchant’s sites between March and June were identified as fraudulent, for example. Account creation fraud allows bad actors to slip onto sites and impersonate legitimate users to enact further fraud such as identity theft or other schemes that can cost merchants both money and users’ trust. Warding against this by leveraging authentication tools is thus proving to be essential during the pandemic.
For more on these and other stories, visit the Tracker’s News & Trends.
Why Shifting Consumer Spend Is Prompting Security Onboarding Moves
Merchants have raced to keep pace with consumers’ rapidly changing spending behaviors over the past seven months as the ongoing global health crisis has affected where and how users interact with businesses. More consumers than ever are making transactions digitally instead of going to brick-and-mortar stores — and fraudsters are following suit. The expanding presence of online fraud is affecting how customers search for new businesses, in fact.
Users wary of fraud are placing a much higher value on cybersecurity, Ryan Wuerch, CEO and founder of cash back mobile app Dosh, noted in a PYMNTS interview.
To learn more about how Dosh is employing email and text verification tools to easily and securely onboard new customers and gain users’ trust, visit the Tracker’s Feature Story.
Deep Dive: Why FIs, Businesse
s Must Upgrade Email Verification to Keep Fraud at Bay
Keeping fraudsters locked out is still a full-time job for online businesses and banks, one that has only become more difficult throughout the ongoing pandemic as bad actors slip in amongst the growing crowd of online consumers. Making sure to properly differentiate between legitimate customers and fraudsters is essential, but fraudsters are coming armed with reams of stolen information ready to impersonate these legitimate users.
This is leading many businesses to implement tools and technologies — including methods like email address verification and biometric tools — to help identity and isolate these bad actors. Pairing email address verification with these new technologies can also help businesses to onboard customers with the speed and seamlessness they are now expecting.
To learn more about why email verification tools remain a critical part of the identification process during consumer onboarding for both banks and merchants, visit the Tracker’s Deep Dive.
About the Tracker
The “Digital Consumer Onboarding Tracker®,” a partnership with Melissa, examines the latest KYC, digital onboarding and online verification news and trends. The Tracker also examines the role alternative data sources and related technologies such as advanced analytical tools can play in this space as onboarding needs grow more sophisticated.