Businesses want to deliver hyper-personalized experiences for their customers. This is unsurprising given a recent McKinsey survey demonstrated that this approach can drive between 5 to 15 percent increases in revenue and 10 to 30 percent increases in marketing spend efficiency. As the UK braces itself for a recession, these figures are very attractive to every organization.
Hyper-personalization is continuous, it is an experience, not a point in time. As such every stage in the user journey needs to be tailored for each customer. Achieving this is challenging for any business that handles payments or sensitive information such as banks, merchants, streamers or government departments.
With tight fraud and compliance controls required, they need authentication at multiple stages throughout the journey and doing this in a real-time adaptive manner for each individual user has historically been very hard and expensive.
This is where, the business goal of hyper-personalization often falls at the first hurdle, due to cumbersome authentication requests that are off-putting for customers and lead to abandoned transactions. If the customer is constantly asked to go through the same difficult sign-in process every time they want to use the same platform, their experience of personalization or, lack of personalization means the brand is damaged at the outset.
The issue of personalization and authentication is reflected in the number of online shopping orders that are abandoned, according to Statista, in March 2020, this figure was 88.05 percent. It’s no surprise that organizations struggle as they have to balance user experience, known to drive loyalty and repeat business, with compliance - a legal requirement and fraud prevention - cost and reputation protection.
Because Hyper-personalization promises such great returns, businesses must find an approach to fraud prevention without compromising on user experience, security and privacy.
Considering the right authentication method
One approach to finding the right authentication method which does not compromise on user experience is to put the user first.
Most physical authentication solutions work only to keep the bad guys out instead of working to let genuine users in. Asking users to input passwords or pins works on the assumption that the user could be a bad actor, so they must prove they are not through their knowledge of a unique pin or password - guilty until proven innocent, this creates friction.
Passwords or pins can also be stolen and used by bad actors. Therefore, knowledge of a password or pin only proves that the user is in possession of the password or pin, not that they are who they say they are.
In contrast, inherent and passive methods of authentication are easier for the user, they reduce friction and make it more difficult for a bad actor to replicate or steal.
Behavioral biometric authentication methods include how a user swipes their phone, or the pressure they use to type, or the angle at which they hold their device, and because these traits are inherent, they positively identify genuine users are who they say they are and let them get on with their online journey. This method passively collects contextual data to authenticate a user in an unobtrusive frictionless way, it's the personalized process every online user Is looking for.
By working to positively identify a genuine user in this way, the user is prioritized by fraud, risk, digital and marketing teams, it reduces friction and lets the genuine user get on with their online activity.
Choosing technology to solve the collaboration conundrum.
Another challenge is to increase collaboration between the marketing, fraud and digital transformation teams to find an identity and authentication solution that balances user experience with security and risk.
But this effort is often limited by internal silos and competing priorities leading to point solutions that only consider capability, not broader business applicability.
Orchestration can play a critical role in bringing internal teams together to design personalized authentication experiences for genuine users.
Organizations should consider technology that makes it easy for teams to create and test user journeys without coding expertise and allowing all teams across the business to work collaboratively to put the user first.
Using a drag-and-drop approach, teams across the organization can create customer friendly user journeys that benefit from real-time authentication mechanisms, decisions and make adjustments based upon who is attempting a transaction, what channel are they using, and with what characteristics. Policies can be configured to manage adversaries and block transactions at the point of request so costly call backs and unnecessary identity checks can be avoided too.
Authentication solutions can be tested using real-time data and journeys can be tailored to the customer, and insights shared across different departments.
Amid the current restrictions, consumer habits have largely shifted to digital. A recent report from Alvarez & Marsal on the impact of Covid-19 on retail predicts that around 17.2 million British consumers plan to make the permanent change to online shopping, as the perceived risks of contracting Covid-19 at physical stores have altered the way people would like to shop. Recent Callsign research revealed that 60 percent of consumers worry about the risk of fraud when shopping online, and 20 percent were willing to switch to another brand due to a bad online shopping experience.
These figures should serve as a timely reminder for marketers, digital transformation teams and fraud prevention teams in all organizations that rely on digital channels to deliver their services, that the cost of getting any aspect of the user journey wrong, not only fails to deliver a hyper personalized experience, but it also costs the business as customers will move to competitors.
With the seismic shift to online in the past year, businesses must embrace technology that delivers the best user experience and hyper-personalized journeys if they are to survive. This is why brands have to make the change now and do their best to deliver hyper-personalization, or they risk losing a host of online customers to a competitor that gets there first.
Amir Nooriala, Chief Commercial Officer, Callsign