Whether it’s using our thumbprints and faces to access online banking, or by confirming our identity online through two-factor authentication - our mobiles have quickly become a key part of how we prove we are who we say we are.
But there’s always a flipside - while these benefits are great, they also mean our mobiles have become a treasure trove of personal information and data, presenting a huge risk of identity fraud.
Almost half of consumers, according to our State of Identity report, now consider their mobile phone number as a core part of their personal identity. But that still leaves the same number of consumers who are yet to be convinced. We understand that our mobile numbers have become a part of our identity used by businesses, but we still need convincing that it's safe.
Unsurprisingly, age plays a key role in determining how comfortable people are in using their mobile as an identifier. A significant majority of those aged 18 to 24 feel comfortable using their mobile device to confirm their identity. However, many people, particularly those from older generations, are still wary of using their mobile devices, particularly for carrying out financial transactions.
Businesses are citing a massive increase in mobile account sign-ups, and many consumers now prefer to open accounts and verify their identities via mobile.
The role of mobile seems only set to grow - which presents a huge opportunity, and challenge, for businesses.
Mobile as a microcosm
At present, mobile plays a key role in the digital business mix.
The pandemic presented a ‘black swan’ event, one where suddenly millions of consumers moved online, often through their smartphones. In response, businesses had to rush their services online, and hurriedly set up anti-fraud and authentication processes on their websites.
Businesses weren’t ready for the change, and consumers had no idea how to navigate this new landscape. And amongst the chaos, fraudsters saw a golden opportunity.
At 95 percent, mobile penetration is higher than ever, with businesses citing an increase in mobile account sign-ups, and many consumers now preferring to open accounts and verify their identities via mobile.
Many of us use our mobiles as a quick and easy way to identify ourselves online, but this ease of access comes with a new variety of risks, which must be tackled head-on.
Mobile can be seen as a useful microcosm of the challenges of balancing friction and fraud prevention. How do we maintain that ease of access that mobile is loved for, without compromising the safety and security of consumers?
But what exactly are the risks of mobiles in identity? The biggest fraud threats consumers face today are sim cloning, device cloning, recycling of phone numbers, call forwarding and caller ID spoofing. Often these types of fraud are linked with the elderly and vulnerable, but in reality, anyone can fall victim to these scams.
Data from fraud prevention service Cifas shows identity fraud cases have risen 32% over the past five years, and this may yet be accelerating. Half of businesses featured in the GBG State of Identity Report have reported an increase in online and mobile identity fraud over the last year.
This paired with the influx of customers moving online every day in response to the closing of high street stores creates the perfect storm for mobile fraudsters.
Consumers are understandably concerned about the threat of data breaches and identity fraud when using their mobiles too. Although some accept personal responsibility for protecting their data, a similar number believe it’s the responsibility of the company that holds that data to protect it.
And whilst most businesses believe their current identity verification approach helps prevent fraud, consumer confidence remains low. And as retailers rush to move online, security can often fall to the wayside with customers left to fend for themselves.
What’s needed to tackle this tidal wave of new customers, and respond effectively to the ever-rising threat of fraudsters is positive friction.
Providing a multi-layered approach to authentication will allow businesses to modify the levels of friction required for mobile transactions, depending on the risk level of the transaction.
If a consumer is signing in to a mobile account, only a small amount of friction is required and expected. But if they’re taking out a high-risk transaction such as a loan, a large amount of friction is both expected and required.
Being transparent about levels of friction for customers is key to achieving trust. For consumers, it’s important to know why friction is required to enable them to trust that the business is really protecting their data, all with the necessary levels of friction to do so.
The opportunity that mobile presents for businesses is huge, but what it requires is a firm commitment to a dynamic, multi-layered approach to digital identity. One that inspires trust for consumers, without comprising the ease that mobile is used for.
Mobile verification is fast becoming a key part of identity, and it’s on businesses to ensure that they’re meeting that demand with a digital identity system that supports this period of mass growth before it’s too late.
Want to know more about the state of digital identity and what’s happening next? Download our free report.
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