It’s a tough time to be a business competing on customer experience. Digital-first disruptors are now firmly embedded across multiple industries, spelling trouble for incumbents as consumers compare these brand relationships to those with tech-centric companies. Today, consumer expectations are changing as we become familiar with quick access to services, such as making a purchase with just a few clicks on Amazon, banking remotely with Revolut, and ordering food and groceries using Deliveroo. These digital-first businesses have built their processes with the customer at the center. Given how nimble they are, that’s been a difficult act to follow.
Covid-19 provided traditional businesses with an opportunity to level the digital playing field. Lockdowns and other restrictions were pivotal in accelerating digital transformation, as companies were forced to move online or left behind. The ensuing development of digital services, apps and online platforms was not only what customers needed, but a commercial necessity. Suddenly, businesses that did not typically have digital at their core had an opportunity to prioritize this and achieve the gold standard of customer experience set by the disruptors and tech giants.
These digital services are often accessed via smart devices for convenience and speed. And now, driven by the need to enhance the consumer experience, they are incorporating new technologies, such as biometric identification (e.g., fingerprint or facial recognition), to support easy access and secure customer data.
Earning Customer Trust
Among the digital-first businesses, fintechs such as Revolut and Monzo exploded into the marketplace. They 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 faced was how to verify users’ identities remotely — something a bank teller would typically do in-branch — with a process that was compliant with regulatory requirements and user-friendly, but also prevented fraud. This paved the way for ID and biometric verification, allowing customers to prove who they say they are and bank online without needing to go in-branch or in store. Traditional banks eventually followed suit, prompted by evolving customer expectations and the restrictions of the pandemic.
Soon, other regulated industries that stood to benefit from meeting their users online, such as gambling and on-demand delivery, looked to fintech’s example and adopted the same methods to have high assurance of identity and age verification. For consumers, familiarity with digital services had grown so much during lockdowns that most were comfortable with biometrics as an authentication method. In fact, data from Onfido showed that nine out of 10 consumers felt comfortable accessing services online.
For example, car-sharing service, Drivy uses facial biometrics to verify drivers digitally, meaning that car owners no longer have to meet the renter in person. The positive customer experience resulted in a 38% increase in users verified and onboarded to the Drivy platform, reducing drop-off rates and car theft because the user’s identity is tied to the vehicle for the duration of the rental. 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 via an app, using biometrics rather than handing over documentation upon arrival. That’s not to say that tech giants aren’t innovating too — early trials of Amazon One in the U.S. are enabling contactless retail payments in supermarkets like Wholefoods using the customer’s palm.
When Friction Makes Sense
When we think of the best customer experiences, they mostly center around how quickly and easily products and services can be accessed. In many cases, this is one of the primary motivations for businesses integrating biometrics. But speed isn’t everything. It’s important to acknowledge that a smooth customer experience doesn’t just mean how quickly customers can achieve what they want to achieve; it’s also about privacy and trust.
The growth of online traffic brought new opportunities for fraudsters and hackers of all abilities. In fact, less sophisticated fraud — in which doctored identity documents are readily spotted — jumped by 37% year-on-year in 2022, showing that bad actors are focusing on broad, brute force attacks. In other words, quantity not quality.
Whether online identity fraud or data breaches, the financial services sector has always been the primary target for 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 increased by 23% last year. In regulated industries like these, biometrics plays a vital role in fraud prevention, a vital component of building customer trust.
However, other industries newer to digital services have had to adapt. Trust-based services like 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 are meeting and reduces fraud. In this way, businesses can use the technology to offer trust and safety.
The relationship between customer experience and security is a delicate one. Naturally, everyone wants to know that their personal information and money are secure. But somewhat counterintuitively, when the stakes are high, the right amount of friction in the customer journey can make users feel safe. Biometrics is increasingly the method selected to strike this balance — adding an additional layer of security that is low effort for the consumer, and quietly reassuring to see.
Biometrics Aren’t for Everyone
That’s not to say that biometrics is a silver bullet. Typically, it’s a more appropriate solution for highly regulated industries or businesses that need to verify customers deemed as potentially high-risk. It’s sometimes used for purposes of age verification too, but facial biometrics on its own can be unreliable unless there is a legitimate ID to compare it against.
Because digital services are so commonplace, and humans can’t possibly 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 comes with its own risks. Developing AI to recognize people as real humans means training algorithms on data that is representative of the population. If it isn’t, businesses risk a biased product that could exclude people and groups. Companies introducing biometrics into their customer experience must ensure that the AI supporting it is developed ethically 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. Both brands and the tech 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 being held by businesses.
Making Biometrics a Reality
Where it is viable, biometrics can underpin a smoother, more secure customer experience. Businesses adopting it often do so to support a customer base with significant scale, meaning AI is likely to play a role in managing the verification process. While AI has high potential to amplify human biases, how a business integrates it can make or break the biometrics experience. This means building algorithms using diverse data sets to ensure inclusivity and accessibility for the entire population. Monitoring known algorithmic biases around metrics like gender, race, and age can bolster more equitable access to services globally.
Biometrics also need to be easy for people to use. Just like any website or digital service, a smooth user journey is fundamental to ensure it is accessible to all. It’s not enough to simply add an innovative technology into the mix and assume that will be enough to improve experience.
The expectations for brand customer experience are higher than ever, particularly as digital channels have become the first point of engagement, feeding into a culture of on-demand access. As the incidence of fraud simultaneously rises, estimated to cost businesses $5.38 trillion annually, biometrics has emerged as a way to strike the balance between speed and security. It’s giving businesses the opportunity 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.
