It’s a tough time to be a business competing on customer experience. Digital-first disruptors are now firmly embedded in many industries, spelling trouble for incumbents as consumers compare these brand relationships to those of tech-centric companies. Today, consumer expectations are changing as we realize easy access to services, such as shopping with just a few clicks on Amazon, remote banking with Revolut, and order food and groceries using Deliveroo. These digital-first businesses build their processes with the customer at the center. Because of their agility, that’s a tough act to follow.
Covid-19 has given traditional businesses an opportunity to level the digital playing field. Lockdowns and other restrictions are critical to accelerating digital transformation, as companies are forced to move online or be left behind. The subsequent development of digital services, apps and online platforms is not only a customer requirement, but a commercial necessity. Suddenly, businesses that don’t typically have digital at their core have the opportunity to put it first and achieve the gold standard of customer experience set by disruptors and tech giants.
These digital services are always accessible through smart devices for convenience and speed. And now, due to the need to improve the consumer experience, they include new technologies, such as biometric identification (for example, fingerprint or face recognition), to support easy access and secure customer data.
Gaining Customer Trust
Among digital-first businesses, fintechs like Revolut and Monzo have exploded onto the market. They have changed the parameters of customer experience and user convenience by offering simpler access to online banking products and services than their competitors.
The challenge they face is how to verify users’ identities remotely – something a bank teller would normally do inside a branch – with a process that complies with regulatory requirements and is user-friendly, but also prevents fraud. It paves the way for ID and biometric verification, allowing customers to prove who they are and bank online without having to go to a branch or store. Traditional banks eventually followed suit, prompted by changing customer expectations and pandemic restrictions.
Soon, other regulated industries that benefit from meeting their users online, such as gambling and on-demand delivery, look to the example of fintech and adopt similar methods to have a high identity assurance and age verification. For consumers, familiarity with digital services has grown so much during the lockdowns that many are comfortable with biometrics as an authentication method. Indeed, data from Onfido shows that nine out of 10 consumers feel comfortable accessing services online.
For example, the car-sharing service Drivy uses facial biometrics to digitally verify drivers, meaning car owners no longer need to meet the renter in person. The positive customer experience resulted in a 38% increase in users being authenticated and boarded on the Drivy platform, reducing car drop-off and theft rates because the user’s identity is tied to the car for the duration to rent. Other mainstream rental companies like Hertz and Avis are now following suit, allowing renters to go straight to their cars and skip the lines.
Biometrics are also making waves in the hospitality sector. Platforms like Sidehide enable hotel customers to book and check-in through an app, using biometrics instead of providing documentation upon arrival. That’s not to say the tech giants aren’t innovating, too — Amazon One’s first tests in the US enabled contactless retail payments at supermarkets like Wholefoods using palm of the customer.
When Friction Matters
When we think of the best customer experiences, most of them center on how easy and convenient it is to access products and services. In many cases, this is one of the main motivations for businesses integrating biometrics. But speed is not everything. It is important to recognize that a smooth customer experience does not only mean how easily customers can achieve what they want to achieve; it is also about privacy and trust.
The growth of online traffic brings new opportunities for fraudsters and hackers of all abilities. In fact, less sophisticated fraud — where doctor’s identification documents are easy to find — jumped 37% year-over-year in 2022, indicating that bad actors are targeting broad, brute-force attack. In other words, quantity is not quality.
Whether it’s online identity fraud or data breaches, the financial services sector is often the primary target of cyber-criminals; the industry has become very familiar with these attacks and is well prepared to deal with them. That doesn’t stop fraudsters from trying – attempts faced by financial services businesses rose by 23% last year. In regulated industries such as these, biometrics play an important role in fraud prevention, an important part of building customer trust.
However, other industries that are newer to digital services will need to adapt. Trust-based services such as dating apps are increasingly using biometrics as a competitive advantage; ensuring users match their profiles with other verified users gives them more confidence in who they meet and reduces fraud. In this way, businesses can use technology to provide trust and safety.
The relationship between customer experience and security is a delicate one. Of course, everyone wants to know that their personal information and money are safe. But somewhat counterintuitively, when the stakes are high, the right amount of friction in the customer journey can make users feel safe. Biometrics is the additional method chosen to attack this balance – adding an additional layer of security that requires little effort for the consumer, and quietly assures visibility.
Biometrics Are Not For Everyone
That’s not to say that biometrics is a silver bullet. Generally, this is a more appropriate solution for highly regulated industries or businesses that need to verify customers who are considered high risk. It is sometimes used for age verification purposes, but the face’s own biometric can be unreliable unless there is a legitimate ID to compare it to.
Since digital services are mundane, and people cannot manually verify every customer interaction with a digital service, there is a greater role for AI to play in automating the biometric verification process. This has its own risks. Developing AI to recognize people as real people means training algorithms on data that represents the population. Otherwise, businesses risk a biased product that may exclude people and groups. Companies introducing biometrics into their customer experience should ensure that the AI that supports them is ethically developed and based on representative data.
And while applications of the technology are now widespread, concern over how and where customers’ biometric data is stored is also a barrier to adoption for some. Brands and the technology industry are working to address this. For example, introducing the concept of reusable or shareable identity as a version of biometrics where identity information is stored on a consumer device, rather than held by businesses.
Making Biometrics a Reality
Where it survives, biometrics can underpin a smoother, more secure customer experience. Businesses that adopt it often do so to support a customer base of significant scale, meaning AI is likely to play a role in managing the verification process. While AI has high potential to augment human biases, how it is integrated into a business can make or break the biometrics experience. This means building algorithms using diverse data sets to ensure inclusivity and accessibility across the population. Monitoring known algorithmic biases around metrics such as gender, race, and age can promote more equitable access to services worldwide.
Biometrics should also be easy for people to use. As with any website or digital service, a smooth user journey is essential to ensure it is accessible to all. It’s not enough to simply add a new technology to the mix and think that’s enough to improve the experience.
Expectations for brand customer experience are higher than ever, especially as digital channels become the first point of engagement, feeding a culture of on-demand access. While the incidence of fraud is simultaneously increasing, it is estimated at cost to businesses $5.38 trillion every year, biometrics emerge as a way to balance speed and security. This gives businesses the chance to achieve ‘Amazon-like’ levels of digital customer experience – if they can introduce it ethically.
Editor’s Note: Revolut, Drivy, and Sidehide use Onfido’s services.
