Times are tough for companies competing on customer experience. Digital-first disruptors are now firmly embedded in multiple industries, causing problems for incumbents as consumers compare these brand relationships to their relationships with tech-centric companies. Today, as you get used to quick access to services like shopping with just a few clicks on Amazon, remote banking with Revolut, or ordering food and groceries with Deliveroo. , consumer expectations are changing. These digital-first companies have built their processes around the customer. Considering how agile they were, it was a difficult act to follow.
Covid-19 has provided traditional businesses with an opportunity to level the digital playing field. Lockdowns and other restrictions have been crucial in accelerating digital transformation as businesses have been forced or left behind to move online. The subsequent development of digital services, apps, and online platforms was not just what customers needed, but what they needed commercially. Suddenly, companies that typically don’t have digital at their core have an opportunity to prioritize this and achieve the gold standard of customer experience set by disruptors and tech giants.
These digital services are often accessed through smart devices for convenience and speed. And now, driven by the need to improve the consumer experience, they are embracing new technologies such as biometrics (such as fingerprints and facial recognition) to support easy access and secure customer data.
earn the trust of customers
Fintechs such as Revolut and Monzo have exploded into the market among digital-first businesses. They changed the parameters of customer experience and user convenience by making online banking products and services easier to access than their competitors.
The challenge they faced was how to remotely verify a user’s identity. This was what bank tellers typically do at the branch, and had processes that were compliant with regulatory requirements, user-friendly, yet fraud-proof. This has paved the way for identity and biometrics, allowing customers to prove who they are and do their banking online without having to visit a branch or store. Traditional banks eventually followed suit, prompted by evolving customer expectations and pandemic restrictions.
Soon, other regulated industries that could benefit from meeting users online, such as gambling and on-demand delivery, turned to the example of fintech and adopted the same methods to verify identity. and high assurance of age verification. Consumers have become more familiar with digital services during the lockdown and are mostly accustomed to biometrics as a method of authentication. in fact, Onfid data 9 out of 10 consumers say they are comfortable accessing services online.
For example, car-sharing service Drivy uses facial biometrics to digitally verify drivers. This means that the car owner no longer has to meet the borrower in person. Positive customer experience led to a 38% increase in users reviewing and onboarding the Drivy platform, and drop-off rates and car theft as the user’s girlfriend ID is tied to the vehicle for the duration of the rental decreased. Other mainstream car rental companies such as Hertz and Avis are now following suit, allowing renters to skip the line and go straight to their car.
Biometrics is also making waves in the hospitality sector. Platforms like Sidehide allow hotel customers to book and check-in via an app using biometrics rather than handing over paperwork upon arrival. That’s not to say tech giants aren’t innovating either. In early trials of Amazon One in the US, supermarkets such as Wholefoods customer’s palm.
When Friction Makes Sense
When we think about the best customer experiences, they mostly center around how quickly and easily a product or service can be accessed. This is often one of the main motivations for companies to integrate biometrics. But speed isn’t everything. It’s important to realize that a smooth customer experience isn’t just about how quickly your customers can achieve what they want. It’s also about privacy and trust.
Increased online traffic has created new opportunities for scammers and hackers of all abilities. In fact, less sophisticated scams, where falsified IDs are readily discovered, surged 37% year-over-year in 2022. In other words, quantity, not quality.
Whether it’s online identity fraud or data breaches, the financial services sector has always been a prime target for cybercriminals. The industry is familiar with these attacks and is well prepared to deal with them. That hasn’t stopped scammers from trying, with attempts facing financial services firms increasing by 23% last year. In such a highly regulated industry, biometrics play a key role in fraud prevention, which is an essential factor in building customer trust.
However, industries new to digital services had to adapt. Trust-based services such as dating apps increasingly use biometrics as a competitive advantage. By allowing users to match their profiles with other verified users, they can feel more confident about who they are meeting and reduce fraud. In this way, businesses can use technology to provide trust and safety.
The relationship between customer experience and security is delicate. Naturally, everyone wants to know that their personal information and money are safe. But counterintuitively, when the risk is high, adding just the right amount of friction to the customer journey can make users feel safe. Biometrics are increasingly the method of choice for striking this balance. It adds an extra layer of security that is hassle-free and quietly reassuring for consumers.
Biometrics aren’t for everyone
I’m not saying biometrics is a silver bullet. A good solution for highly regulated industries or companies that typically need to verify customers that are considered potentially high risk. While sometimes used for age verification purposes, facial biometrics alone are unreliable unless you have a valid ID to compare against.
Since digital services are so common and it is probably impossible for a human to manually verify every customer interaction with a digital service, AI has a growing role to play in automating the biometric authentication process. increase. This comes with its own risks. Developing an AI that recognizes people as real people means training the algorithm with data that is representative of the population. Otherwise, companies risk a biased product that may exclude individuals and groups. Companies that introduce biometrics into their customer experience must ensure that the AI that supports it is ethically developed and based on representative data.
Another barrier to adoption is concerns over how and where the customer’s biometric data is stored, although the application of this technology is now widespread. Both brands and the tech industry are working to address this issue. For example, it introduces the concept of reusable or shareable identity as a version of biometrics where identity information is stored on the consumer’s device rather than being held by the company.
Achieve biometric authentication
When biometrics are actionable, they can underpin a smoother and safer customer experience. Companies that employ it often do so to support a sizable customer base. In other words, AI could play a role in managing the verification process. While AI is likely to amplify human biases, how businesses integrate AI can make or break the biometrics experience. This means building algorithms using diverse datasets to ensure inclusiveness and accessibility across populations. By monitoring known algorithmic biases on indicators such as gender, race and age, we can globally enhance more equitable access to services.
Biometrics should also be easy for people to use. As with any website or digital service, a smooth user journey is fundamental to making it accessible to everyone. It’s not enough to simply add innovative technology to the mix and assume it’s enough to improve the experience.
Brand customer experience expectations have never been higher, especially with digital channels becoming the first point of engagement and a culture of on-demand access pervasive. As fraud rates rise at the same time, Business costs $5.38 trillion Biometrics are emerging every year as a way to balance speed and security. Done ethically, it gives companies the opportunity to achieve an “Amazon-like” level of digital customer experience.
Editor’s Note: Revolut, Drivy and Sidehide use Onfido’s services.
