By Laura Barrowcliff, Head of Strategy, Customer Insights & Innovation
Digital identity is set to become more important than ever before. Deloitte states that “digital identities are becoming the foundation of our rapidly evolving technology-based and data-driven economy and society,” and that “digital identity should be at the core of any leading, data-driven organisation.” With that in mind, what trends will be driving digital identity in 2022 and what do businesses need to consider?
As the world becomes increasingly digitised, and as face-to-face interaction may continue to be difficult for some time, consumers will continue to drive the demand to transact online with confidence. Expectations on customer experience will also rise, and the need to do things increasingly in real time and on mobile means that businesses need to adopt trusted, effective and frictionless methods to verify consumers digitally. According to research from Salesforce, 56% of commerce leaders expect the majority of their revenue to come from digital channels within the next three years – so in 2022, expect an increased focus on getting the customer experience right.
Consumer expectations on data privacy will also continue to rise, creating the need for businesses to be more transparent and robust in handling customer data – the Salesforce research revealed that 86% of people want more transparency on how their information is used.
While the digital economy creates huge opportunities for individuals and the economy, it also creates new avenues for fraudsters to commit more sophisticated crimes. Card payment fraud, phishing, account takeover, electronic transfer fraud, IP theft and piracy, social engineering to name but a few. In 2020, GBG research found that 26% of businesses surveyed felt they were least prepared for synthetic identity fraud, the use of a combination of real and fake personal information to create an identity and commit fraud. This type of fraud continues to be an issue and will be for the foreseeable future, so businesses need to have robust processes in place to prevent identity fraud, to reduce the cost and risk of it to them and their customers further down the line.
Read more in the GBG State of Digital Identity 2020 report.
Regulation is evolving in breadth and depth globally, and it will continue to become more stringent in tackling financial crime and privacy and consumer rights. With an increased number of use cases coming under the spotlight in anti-money laundering regulation and expanding offences, plus high expectations on data privacy – with local variances – companies will need to stay on top of what’s expected of them in the countries that they serve. It can be complex and expensive, but ultimately it creates trust and protects good citizens.
In 2022 more and more companies are likely to turn to digital identity verification solutions to help tackle the increased burden of regulation. By using this type of technology, companies can onboard as many ‘good’ customers as possible, first time around, safe in the knowledge that they are keeping fraudsters firmly out while also being fully compliant in the process.
With over 10% of the world’s population lacking some form of legal ID, and even more lacking a digital trail, inclusion in identity product design and process design is a must to enable economic growth and financial inclusion for excluded demographics. At the same time, companies need to concentrate on minimising bias in decision making by carrying out best practice in AI training and processes.
Our identity is complex and constantly evolving, and it doesn’t just consist of name, address and date of birth as noted on a government-issued source. Our identities change constantly as we go about our day-to-day lives, and businesses need to recognise that they cannot rely on traditional sources of data alone as these tend to be static and rely on physical documents, such as driving licenses or passports. This excludes many of the world’s population, however – only a third of Americans hold a valid passport, for example. Businesses need to adopt and trust alternative data sources such as email, mobile, IP, online behaviour to gain further insight into identities, for safer onboarding and fraud prevention.
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